Experienced, liquidity-focused managers, along with considerable supporting resources earn, JPMorgan Ultra-Short Income ETF JPST a People upgrade as one of the category’s best.
Team, depth, stability, and strong decisions make this tenured team stand out from rivals, earning it a People upgrade to High from Above Average. J.P. Morgan’s global liquidity platform offers this team the tools and resources to make effective and thoughtful decisions across traditional cash markets and bonds that mature beyond one year.
Manager James McNerny has helmed this offering since its May 2017 inception and leads this strategy day to day. He joined J.P. Morgan in 2000 and focuses exclusively on short-term strategies. This collaborative effort includes three seasoned comanagers, David Martucci, Cecilia Junker, and Kyongsoo Noh, who average more than 25 years of industry experience. The comanagers also draw on the vast resources of the firm’s global fixed-income and currency and commodities platforms, including 21 investment-grade corporate bond and eight securitized analysts who inform security selection.
A time-tested process emphasizes bottom-up security selection but also takes its cues from the firm’s macro forecast. Relative value assessments between traditional cash markets and debt maturing beyond one year, and the outlook for liquidity drive portfolio positioning. This helps the team beat prime money market funds while limiting potential losses and maintaining ample liquidity. The exchange-traded fund's conservative approach builds on the firm’s long history of managing ultrashort and liquidity strategies for institutions. Duration stays less than one year, but it fluctuated between a fourth and three fourths of a year recently. Investment-grade corporate bonds and securitized debt receive the most focus, despite these sectors’ absence from the strategy’s ICE BofA 3-Month US Treasury Bill Index.
This conservative approach has helped the strategy hold up better than peers in down markets. Despite the absence of below-investment-grade debt, which features as 5% of the portfolio of the average ultrashort bond peer, the ETF’s performance since its May 2017 inception is compelling. Over this period, the strategy’s 2.4% annualized gain through May 2024 beat its distinct ultrashort bond Morningstar Category peer median’s 2.2%, ranking near the top quartile; its top-decile volatility-adjusted performance, as measured by Sharpe ratio, was even better. The strategy’s downside protection was on display in 2022, when rates spiked following the beginning of the Russia-Ukraine war and in March 2020’s pandemic-driven volatility.
The ETF’s competitive 18-basis-point expense ratio is one of the category’s lowest.