JPMorgan Short Duration Core Plus ETF earns an Above Average Process Pillar rating.
The leading factor in the rating is the parent firm's five-year risk-adjusted success ratio of 57%. The measure indicates the percentage of a firm's funds that survived and beat their respective category's median Morningstar Risk-Adjusted Return for the period. Excellent risk-adjusted performance also strengthens the process. This can be seen in the fund's five-year alpha calculated relative to the category index, which suggests that the managers have shown skill in their allocation of risk. Lastly, the process is limited by being an actively managed strategy. Historical data, like Morningstar's Active/Passive Barometer, finds that actively managed funds have generally underperformed their passive counterparts, especially over longer time horizons.
Compared with other funds in the Short-Term Bond Morningstar Category, this fund, historically, hews closely to peers' credit and interest-rate sensitivity over the past few years. Opening the analysis to additional factors, the portfolio has displayed biases over time, whether towards or away from certain fixed-income instruments. Compared with the average strategy in the category, the managers have been overweight B rated bonds in recent years. In the latest month, the strategy has relatively overweighted B rated bonds compared with its peers as well. Additionally, there's been a bias away from debt with longer than 30-year maturities over the past few years. Similarly, in recent months, the strategy also had less exposure to debt with longer than 30-year maturities than peers. Finally, during the past few years, the fund leaned away from government bonds. In recent months, the strategy also had less exposure to government bonds compared to its peers.
This strategy's 12-month yield is 4.2%, higher than its average peer's 3.7%. Plus, its 30-day SEC yield (a measure similar to yield-to-maturity) sits at 4.8%. Typically, higher yields come at the cost of higher credit risk. The portfolio has a lower average surveyed credit quality of BBB, compared with the category average's A and 8% of the fund's assets are rated non-investment-grade, compared to its peers' 2%. Strategies that take on more credit risk tend to be at their best when markets are as well. This risk contributes to strong performance during bull markets at the cost of losing more on the downside.