JPMorgan Ultra-Short Municipal Income ETF's JMST veteran portfolio managers and well-resourced municipal research team ably execute this offering’s investment process. Increased confidence in this team’s stability and experience contributes to an upgrade in the People Pillar rating to Above Average from Average and contributes to the fund’s Morningstar Analyst Rating upgrade to Bronze from Neutral.
While the strategy’s duration (a measure of interest rate volatility) is shorter than most of its unique muni national short Morningstar Category peers, it delivers on its objective of outperforming money market funds and managing volatility. Rick Taormina, Curtis White, and Josh Brunner bring an average of 28 years of experience to managing this offering, and one of the largest dedicated muni credit research teams in the industry and deep resources of JPMorgan support the portfolio managers.
The three managers leading this ETF work closely to assess risks and opportunities, manage liquidity, and deploy the broader JP Morgan muni team to help execute this strategy’s mandate. Taormina heads the JPMorgan Tax Aware franchise and brings his broad views to the strategy, while White applies his experience managing short-duration muni strategies to helm the day-to-day management. Brunner offers his muni credit expertise to complement this high-quality offering. The 12-person credit team supports the portfolio managers and boasts 18 years of average industry experience.
The managers employ a combination top-down and bottom-up approach to investing in the shortest part of the tax-exempt muni market. Sensible restrictions are in place to diversify the portfolio and avoid concentrated sector or state bets. The strategy also leans higher in credit quality than the typical peer; bonds rated A and higher constituted roughly 86% of the portfolio at the end January 2022, more than the typical peer but below its Bloomberg Municipal 1 Year Index. Over the strategy's short track record from November 2018 through February 2022, its 1.4% annualized return lagged 65% of distinct peers, but that's largely to be expected as most in that group regularly buy longer-maturity bonds. However, this ETF’s performance against similarly managed ultrashort muni peers is competitive.
For investors seeking cash-plus tax-exempt returns with low volatility, JMST is a solid option that effectively fills this niche.