JPMorgan BetaBuilders Dev APAC ex-JpnETF earns a High Process Pillar rating.
The main driver of the rating is that this fund tracks an index. Historical data, like Morningstar's Active/Passive Barometer, finds that passively managed funds have generally outperformed their active counterparts, especially over longer time horizons. The parent firm's five-year risk-adjusted success ratio of 59% also bolsters the process. The measure indicates the percentage of a firm's funds that survived and outperformed their respective category's median Morningstar Risk-Adjusted Return for the period. Their noteworthy success ratio suggests that the firm does well for investors and that this fund may benefit from that. Impressive risk-adjusted performance also reinforces the process, as shown by the fund's five-year alpha calculated relative to the category index, which suggests the process was successful over that period.
The investment strategy as stated in the fund's prospectus is:
The investment seeks investment results that closely correspond, before fees and expenses, to the performance of the Morningstar® Developed Asia Pacific ex-Japan Target Market Exposure IndexSM. The fund will invest at least 80% of its assets in securities included in the underlying index. The underlying index targets 85% of the stocks traded on the primary exchanges in each country or region by market capitalization, and and primarily includes large-and mid-cap companies.
The portfolio is overweight in financial services and basic materials relative to the category average by 13.6 and 9.9 percentage points, respectively. The sectors with low exposure compared to category peers are technology and consumer cyclical, underweight the average by 19.7 and 11.4 percentage points of assets, respectively. The portfolio is composed of 132 holdings and is relatively concentrated. Specifically, 42.6% of the strategy's assets are housed within the top 10 holdings, as opposed to the typical peer's 30.0%. And finally, in terms of portfolio turnover, this fund trades less regularly than the typical peer in its category, which may result in a lower cost to investors.