JPMorgan Municipal ETF earns an Above Average Process Pillar rating.
The most important 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 size of the portfolio management team also reinforces the process. With four portfolio managers, the fund is reasonably well-resourced. 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 Muni National Interm 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. Relative to the average strategy in the category, the managers have been significantly underweight debt with 20- to 30-year maturities. Additionally, there's been a notable overweight bias toward AA rated bonds. And finally, the fund leans meaningfully toward cash.
This strategy has a 2.8% 12-month yield, higher than its average peer's 2.6%. Plus, its 30-day SEC yield (a measure similar to yield-to-maturity) sits at 3.5%. While a higher yield may deliver more income, it also tends to indicate higher credit risk. But that isn't always the case. Over the past 12 months, the average yield of the fund has been higher 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.