JPMorgan U.S. Research Enhanced Large Cap ETF JUSA

Carefully designed and well-executed enhanced indexing approach. Despite tight constraints, an experienced portfolio manager and JPMorgan’s analytical firepower supporting a well-designed approach give JPMorgan US Research Enhanced Equity Active ETF an edge. We maintain an Above Average People rating and upgrade the Process Pillar to Above Average from Average, reflecting confidence in the research-enhanced index framework’s ability to deliver modest but repeatable excess returns. This is particularly relevant in the US large-cap blend equity Morningstar Category, where many less constrained peers have struggled to generate reliable outperformance, making the strategy’s measured, research-driven approach a sensible and competitive alternative.

The strategy is part of JPMorgan’s broader Research Enhanced Index platform. The platform comprises seven portfolio managers with long tenures and deep familiarity with JPMorgan’s systematic, research-driven framework. Raffaele Zingone has led the US Research Enhanced strategy since November 2016 and brings more than three decades of experience at JPMorgan. While he oversees portfolio construction and risk management, stock selection is driven by the firm’s central US equity analyst team, one of the strongest in the industry. Turnover on the team has been an issue in the past, but stability has improved since 2024. Analyst incentives remain closely tied to stock selection outcomes, aligning interests with investors.

The exchange-traded fund blends elements of index and quantitative active investing, expressing analyst insights through small, stock-level over- and underweights while keeping sector, style, and factor exposures close to those of the S&P 500. Operating under a tight tracking error budget of around 1%, the portfolio remains broadly diversified, typically holding around 250 stocks with an active share in the 25% to 30% range. The portfolio also adheres to exclusionary environmental, social, and governance-focused criteria, which include restrictions on investments in fossil fuels, weapons, tobacco, and other specified sectors.

Performance has been consistent with expectations for a low tracking error, enhanced-indexing strategy. Over longer horizons, the ETF has delivered modest, incremental outperformance versus its benchmark and category peers, despite some recent headwinds in a narrowly led, momentum-driven market environment. Risk has remained well controlled, and the ETF continues to benefit from fees that are meaningfully lower than those of most fully active peers.

Note: This share class' Summary analysis is inherited from an analyst-covered share class under the same strategy: JPM US Research Enh Eq Act ETF USD Acc (SecID: F000011B21).

The Process Pillar rating is upgraded to Above Average from Average, reflecting a disciplined and repeatable approach that effectively leverages JPMorgan’s research capabilities while tightly controlling risk.

The approach combines elements of index and quantitative active investing, incorporating the fundamental research insights of JPMorgan’s analyst teams to enhance returns relative to a passive approach while keeping risks in check. These insights are then integrated into a portfolio with limited deviations from the respective benchmark by applying small overweight or underweight positions at the stock level, while aiming for neutrality at the region, sector, or style levels.

The fundamental research process focuses on identifying a company's competitive advantage, growth prospects, and catalysts for change to differentiate between winners and losers. The firm’s research framework includes an assessment of financially material ESG credentials of a company. To guide the analysis, the analyst teams apply a strategic classification framework to categorize companies as Premium, Quality, Standard, or Challenged, based on their economics, duration of value creation, and corporate governance. This is followed by the analysts' long-term valuation forecasts, derived from an in-house dividend-discount model that incorporates the team's earnings, cash flow, and growth-rate estimates. The analysts rank stocks in each industry based on their estimated fair value. The portfolio manager constructs the portfolio with the help of an optimizer that considers the analyst rankings within a strategy’s tight portfolio constraints. An additional aim is to limit turnover, which tends to be between 30% and 40% annually. The portfolio also adheres to exclusionary ESG criteria, which include restrictions on investments in fossil fuels, weapons, tobacco, and other specified sectors.

The ETF portfolio remains closely aligned with the S&P 500 across sector, style, and beta dimensions, reflecting its tight tracking error budget of roughly 100 basis points, which limits the scope for active positioning. Individual holdings are expressed through small deviations from benchmark weights, with the largest over- and underweights typically at around plus/minus 50 basis points relative to the index, though many positions tend to stay considerably closer to benchmark levels.

The ESG overlay results in exclusions in areas such as defense and tobacco, which are offset through broader diversification across the remainder of the portfolio. As a result, the ETF typically holds around 250 stocks. Active share relative to the S&P 500 tends to be modest, generally in the 25% to 30% range. The portfolio is rebalanced monthly to incorporate updated analyst views while adhering to strict risk constraints, reinforcing the ETF’s role as a benchmark-aware core equity exposure.

Note: This share class' Process Pillar rating and analysis are inherited from an analyst-covered share class under the same strategy: JPM US Research Enh Eq Act ETF USD Acc (SecID: F000011B21).

An experienced portfolio manager and the firm’s analytical firepower support an Above Average People rating. Raffaele Zingone has led a similar strategy with a slightly larger tracking error budget since 2016. He brings more than three decades of experience at JPMorgan, having joined the firm in 1991. While Zingone is the named lead manager, stock selection is driven by JPMorgan’s central equity analyst team, with Zingone focused primarily on portfolio construction and risk management.

The strategy is part of JPMorgan’s broader Research Enhanced Index platform, led by Piera Elisa Grassi. The platform comprises seven portfolio managers with long tenures and deep familiarity with JPMorgan’s systematic, research-driven framework. Grassi is listed as a comanager on the ETF for regulatory and domicile reasons, but she functions as a backup rather than an active decision-maker in the day-to-day management of the portfolio.

The strategy's analyst-driven approach means the firm’s 20-person US fundamental equity team plays a key role. Analysts cover the S&P 500 using a consistently applied fundamental framework and benefit from strong access to company management. Compensation structures closely link analyst pay to the performance of their stock recommendations, reinforcing alignment with shareholders. Following a period of elevated turnover earlier in the decade, team stability has improved since 2024.

Global REI team members' compensation is linked to both alpha and risk, emphasizing the importance of risk management for these strategies. They are also invested in the strategies, aligning with investors' interests.

Note: This share class' People Pillar rating and analysis are inherited from an analyst-covered share class under the same strategy: JPM US Research Enh Eq Act ETF USD Acc (SecID: F000011B21).

A strong choice for active management. Building on a solid foundation, J.P. Morgan Asset Management maintains an Above Average Parent rating.

J.P. Morgan is a well-resourced, diligent, and responsible steward of client assets. Investment teams are seasoned and stalwart, especially in equity and fixed income, the latter of which has successfully undergone substantial transformation in recent years. The firm offers competitive compensation that is aligned with fundholders and shows strong retention at senior levels of the organization. It demonstrates a culture of constant innovation and willingness to evolve. For example, J.P. Morgan recently expanded its investment committee process through which senior leaders review various teams and strategies, and it continues to develop proprietary portfolio management and risk oversight tools. Some funds still face high fee hurdles, but the firm has generally lowered expenses as it has grown.

The firm isn't without its complications. J.P. Morgan's product offering is extensive, and some areas need improvement. For instance, its multi-asset business has faced some challenges as a result of complex investment processes. The firm continues to build out its footprint in China, but its efforts there remain unproven. Although not every strategy is the best in its class, J.P. Morgan remains earnest in the pursuit of excellence, and investors are well-served.

Note: This share class' Parent Pillar rating is analyst-driven, as its Branding Name, JPMorgan (Branding Name ID: BN0000095S), is covered by Morningstar Manager Research.

Performance is evaluated in US Dollar, measured to the end of April 2026.

Short-Term Performance

Over the past 12 months, JPMorgan U.S. Research Enh Lg Cp ETF share class returned 31%, outperforming its category index, the Morningstar US Large-Mid TR USD Index (30.9%), and its Morningstar category peers (27.4%).

JPMorgan U.S. Research Enh Lg Cp ETF's Prospectus Adjusted Expense Ratio is 0.2% per year. It places it in the cheapest quintile of the Morningstar US Fund Large Blend Category, where the median fee is 0.67% per year. This cost positioning translates into a Medalist Rating Price Score of 1.74, which reflects its relative price positioning within the category. The Price Score ranges from -2.50 (most expensive) to +2.50 (cheapest), with higher scores indicating better cost competitiveness.