JPMorgan Inflation Managed Bond ETF JCPI

The portfolio maintains a sizable cost advantage over competitors, priced within the cheapest fee quintile among peers.

The strategy's sensible investment philosophy merits an Above Average Process Pillar rating. Independent of the rating, analysis of the strategy's portfolio shows it has maintained a significant overweight position in corporate bonds and A rated bonds compared with category peers. The strategy’s management team earns an Above Average People Pillar rating. The strategy's parent organization earns the firm an Above Average Parent Pillar rating. People Pillar and Parent Pillar ratings for this strategy are indirectly assigned by a Morningstar analyst rather than algorithmically derived. Please see the notes following each pillar section for more details. The details of assigning methods can be found in each pillar section.

JPMorgan Inflation Managed Bond ETF earns an Above Average Process Pillar rating.

The main driver of the rating is the parent firm's five-year risk-adjusted success ratio of 59%. 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. The parent firm's excellent risk-adjusted performance, as shown by its average 10-year Morningstar Rating of 3.3 stars, also contributes to the process.

Compared with other funds in the Inflation-Protected Bond Morningstar Category, this fund, historically, hews closely to peers' credit and interest-rate sensitivity. Opening the analysis to additional factors, the portfolio has displayed three biases over time, whether towards or away from certain fixed-income instruments. Compared with the category average, the managers have been substantially overweight corporate debt. Additionally, there's been a notable overallocation to A rated bonds. And finally, the fund leans meaningfully toward debt with 10- to 15-year maturities.

This strategy's 12-month yield is 3.5%, lower than its average peers' 4.7%. Plus, its 30-day SEC yield (a measure similar to yield-to-maturity) sits at 4.4%. Typically, a lower yield comes with the benefit of less credit risk. But that isn't always the case. Over the past 12 months, the average yield of the fund has been lower than the average yield of its Morningstar Category peers. The portfolio's average surveyed credit quality is on par with peers, with both the fund and the average being rated A.

Scott E. Grimshaw, the longest-tenured manager on the strategy, provides strong guidance, offering over 25 years of portfolio management experience. The average Morningstar Rating of the strategies they currently manage is 3.0 stars, reflecting average risk-adjusted performance versus category peers. The team boasts an experienced corps of listed portfolio managers, with three others supporting Scott E. Grimshaw. Together, they average over 25 years of portfolio management experience. With at least one manager investing$ 1 million or more in this offering, investors can have some assurance that the team's interests are aligned with theirs.

Note: The People Pillar rating is indirectly assigned by an analyst. The longest-tenured manager of the fund also manages a different product rated by an analyst. Their analyst-assigned People Pillar rating is combined here with the People scores (algorithmic or analyst-assigned) for the fund’s other managers on a tenure-weighted basis.

As of 2022, this investment stalwart manages more than USD 2.5 trillion in AUM. Composed of various global cohorts and diverse asset classes, the firm has more tightly integrated its capabilities in recent years, notably through the development of proprietary analytical and risk systems. Investment teams are robustly staffed and helmed by seasoned contributors. The firm’s strategies tend to produce reliable portfolios, and several flagship offerings are Morningstar Medalists. Manager incentives align with fundholders'; compensation reflects longer-term performance factors, and portfolio managers invest in the firm’s strategies as part of their compensation plans.

The firm’s funds tend to be well-priced, but they aren’t as competitive as many highly regarded peers of similar scale. Recent product launches include thematic and single-country strategies, both of which carry the potential for volatile performance and flows, along with misuse by investors. The firm remains intrepid when it comes to developing an environmental, social, and governance-focused framework and continues to move into other areas such as direct indexing through its 55iP acquisition and China through its joint venture, but these complicated initiatives take time to assess any real and lasting effect.

This share class’ MQR Analysis Performance content was not generated because of insufficient data. To generate individualized content, MQR Analysis requires sufficient data to generate its framework of “ mental models ” designed to mimic content written by analysts.

Past performance is not predictive of future results, and, therefore, Morningstar Quantitative Ratings are not anchored on short-term results and instead focus on long-term risk and return patterns. Performance receives no explicit weighting in Morningstar’s analysis but is referenced as a part of the People, Parent, and Process evaluations.

This share class lands in the cheapest quintile of its Morningstar Category. Its attractive expense ratio, taken together with the fund’s People, Process, and Parent Pillars, suggests that this share class has high potential to deliver positive alpha against its category benchmark, explaining its Morningstar Medalist Rating of Silver.