JPMorgan Municipal ETF earns an Above Average Process Pillar rating.
The most substantial contributor to the rating is the parent firm's five-year risk-adjusted success ratio of 57%. 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. Excellent risk-adjusted performance also bolsters the rating. This can be seen in the fund's five-year alpha calculated relative to the category index, which suggests that the managers have shown skill in their allocation of risk. Lastly, the process is limited by being an actively managed strategy. Historical data, such as 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 has been consistently sensitive to interest-rate changes over the past few years. Opening the analysis to additional factors, the portfolio has displayed biases over time, whether towards or away from certain fixed-income instruments. Compared with the category average, the managers have been underweight debt with 20- to 30-year maturities in recent years. In the latest month, the strategy has also relatively underweighted debt with 20- to 30-year maturities compared with Morningstar Category peers. Additionally, there's been a notable overweight bias towards AA rated bonds over the past few years. Compared with category peers, the strategy had more exposure to AA rated bonds in the most recent month. Finally, during the past few years, the fund leaned meaningfully towards cash. In this month, the strategy also leaned more towards cash compared with its peers.
This strategy has a 3.2% 12-month yield, higher than its average peer's 2.8%. Plus, its 30-day SEC yield (a measure similar to yield-to-maturity) sits at 3.4%. Typically, higher yields come at the cost of 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.