JPMorgan BetaBuilders US Mid Cap Eq ETF earns a High Process Pillar rating.
The leading factor in the rating is its parent firm's impressive long-term risk-adjusted performance, as shown by the firm's average 10-year Morningstar Rating of 3.3 stars. This fund tracks an index, which also increases its process rating. Historical data, like Morningstar's Active/Passive Barometer, shows 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 53% strengthens 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 this firm does well for investors and that this fund may benefit from that.
The investment strategy as stated in the fund's prospectus is:
The investment seeks investment results that closely correspond, before fees and expenses, and to the performance of the Morningstar® US Mid Cap Target Market Exposure Extended IndexSM. The fund will invest at least 80% of its assets in securities included in the underlying index. The underlying index consists of equity securities primarily traded in the United States and targets those securities that fall between the 85th and 95th percentiles in market capitalization of the free float adjusted investable universe.
The portfolio is overweight in consumer cyclical by 2.9 percentage points in terms of assets compared with the category average, and its real estate allocation is similar to the category. The sectors with low exposure compared to category peers are technology and financial services; however, the allocations are similar to the category. The portfolio is positioned across 600 holdings and is diversified among those holdings. In its most recent portfolio, 4.7% of the portfolio's assets were concentrated in the top 10 fund holdings, as opposed to the category average's 16.0%. And finally, in terms of portfolio turnover, this portfolio turns over its holdings less quickly than peers, potentially leading to lower costs for investors and eliminating a drag on performance.