JPMorgan International Research Enhanced Equity ETF JIRE

A capable portfolio manager and J.P. Morgan’s analytical firepower, supporting a well-designed approach, give the JPMorgan International Research Enhanced Equity ETF an edge despite tight constraints. We assign Above Average ratings to both People and Process.

Piera Elisa Grassi assumed full responsibility for the international strategy in September 2020. Grassi joined J.P. Morgan in 2004, began managing money in 2007, and has headed the global research enhanced index team since 2014. She is supported by a team of seven portfolio managers with extensive industry experience and long tenure at the firm. J.P. Morgan’s deep fundamental research platform is central to the strategy’s success, and Grassi leverages these insights within a highly systematic framework, drawing on her strong background in quantitative analysis and risk management. Members of the global REI team are also invested in the strategies they manage, aligning their interests with those of investors.

The well-engineered and consistently executed approach blends elements of index tracking and quantitative active management to enhance returns relative to a passive strategy while maintaining tight risk controls. Analyst insights are incorporated through modest stock-level overweight and underweight positions relative to the MSCI EAFE Index, while maintaining neutrality across region, sector, and style dimensions. As a result, stock selection is the primary driver of relative returns. The strategy targets a tight tracking error of 1.0% to 1.5% versus the benchmark. The portfolio is highly diversified, holding more than 200 securities, with an active share typically around 40%.

Since Grassi assumed full responsibility in September 2020 through May 2026, the strategy has outperformed its benchmark despite operating within tight constraints, resulting in an attractive information ratio. It also meaningfully outperformed typical foreign large-blend peers. This was achieved with similar volatility, leading to moderately higher risk-adjusted returns as measured by the Sharpe ratio. Additionally, the strategy benefits from materially lower fees than most active peers.

The strategy employs a well-engineered and effectively executed process, earning an Above Average Process rating.

The approach combines elements of index tracking and quantitative active investing, incorporating J.P. Morgan’s fundamental research insights to enhance returns relative to a passive approach while maintaining tight risk controls. These insights are integrated into the portfolio through modest stock-level overweight and underweight positions relative to the benchmark, while maintaining neutrality across region, sector, and style dimensions.

The fundamental research process focuses on identifying a company’s competitive advantages, growth prospects, and catalysts for change to distinguish potential winners from losers. The firm’s framework also incorporates an assessment of financially material environmental, social, and governance factors. To guide analysis, analyst teams apply a strategic classification system that categorizes companies as Premium, Quality, Standard, or Challenged, based on their economics, durability of value creation, and corporate governance.

This classification feeds into analysts’ long-term valuation work using an in-house dividend discount model that incorporates earnings, cash flow, and growth assumptions. Stocks are then ranked within each industry according to their estimated fair value. Portfolio construction is supported by an optimizer that translates these rankings into position sizes while adhering to the strategy’s tight constraints. An additional objective is to limit turnover, which typically ranges between 20% and 40% annually.

The portfolio manager constructs the portfolio within relatively tight constraints, targeting a tracking error of 1.0% to 1.5% versus the MSCI EAFE Index. Regional and sector exposures are maintained within 3% of the benchmark, while the strategy aims to remain broadly factor-neutral. As a result, most active risk is stock-specific, making stock selection the primary driver of returns. Individual positions are typically kept within 1 percentage point of their index weights. Consequently, the risk of not owning a stock is carefully considered, and the strategy is unlikely to assign zero weight to the largest benchmark constituents. The portfolio is broadly diversified, holding around 200 stocks compared with approximately 700 in the benchmark, resulting in an active share of about 40%. Rebalancing occurs every four to six weeks.

A well-versed manager and the firm’s analytical firepower support an Above Average People rating. Piera Elisa Grassi has led the global research-enhanced strategy since its launch in October 2018, the European variant since May 2019, and the eurozone version since its inception in 2022. She assumed full responsibility for the international (global ex-US) strategy in September 2020. Grassi joined J.P. Morgan in 2004, began managing money in 2007, and has headed the global REI team since 2014. The team comprises seven portfolio managers averaging 20 years of industry experience and 18 years at the firm. Members are based in London, New York, and Tokyo and are organized along regional lines.

J.P. Morgan’s deep fundamental research platform—comprising approximately 70 sector analysts covering more than 2,500 companies—is central to the strategy’s success. Grassi leverages these inputs within a disciplined, systematic portfolio construction process, drawing on her strong background in quantitative analysis and risk management. She is a methodical and thoughtful investor who, owing to her long tenure, is highly familiar with the in-house research platform. This enables her to effectively interpret analyst recommendations, with a clear understanding not only of individual investment theses but also of relative stock preferences.

Compensation for global REI team members is tied to both alpha generation and risk management, reinforcing the importance of controlled execution. Team members are also invested in the strategies they manage, helping align their interests with those of investors.

J.P. Morgan continues to build a track record of strong stewardship, supporting a Parent rating upgrade to High from Above Average.

With more than USD 4 trillion in assets under management (including USD 1.3 trillion in money market funds) and a broad reach, J.P. Morgan is among the largest active asset managers in the US, Europe, and Asia. Although some multi-asset offerings have struggled over the past five years, prompting new leadership to make changes to investment teams, its equity and fixed-income teams boast long-tenured portfolio managers who practice repeatable investment processes that have generally produced strong long-term results. Most of its funds are core building blocks with long lifetimes, though its lineup around the world also includes more-specialized options: Two options-based equity-income exchange-traded funds, launched in 2020 and 2022, are now among the firm’s largest. J.P. Morgan has been an early mover in offering active ETFs, having converted 12 of its open-end mutual funds to the structure and launching others. It isn’t always at the forefront of emerging trends. While it has filed registration statements with the Securities and Exchange Commission for an interval fund and an ETF investing in private markets, it hasn’t yet introduced such an option for all investors, whether on its own or in partnership with another asset manager, unlike some of its closest competitors.

To support the firm’s diverse investment offerings, J.P. Morgan has invested heavily in both portfolio management tools and its client organization. Over the past 10 years, the firm has developed robust proprietary technology with advanced analytics and broad buy-in from investment analysts, portfolio traders, and portfolio managers, all of whom have easy access to the platform. The firm also stands apart for its demonstrated commitment to clients. In the early 2000s, J.P. Morgan began pivoting its engagement with financial advisors to adopt a more consultative approach, supported by its sought-after Guide to the Markets research series that focuses on investor education, not product pitches. This perspective can help clients stay the course, supporting positive investor outcomes.

Incentives reinforce alignment with fundholders. Beginning more than 10 years ago, investment team compensation is tied to three-, five-, and 10-year performance, and portfolio managers must invest at least half of their deferred compensation in J.P. Morgan strategies. Many firms encourage portfolio managers to invest alongside fundholders, but J.P. Morgan goes a step further in requiring client-facing individuals to invest substantial portions of their incentive compensation in the funds.

Although some funds still face high cost hurdles, more than half of share classes charge competitive fees relative to peers.

Since Piera Elisa Grassi assumed full responsibility in October 2020 through May 2026, the strategy has outperformed its benchmark despite being managed within tight constraints, resulting in an information ratio of 0.14. Tracking error has remained well within the 1.5% limit. However, the strategy’s tightly controlled risk profile and close alignment with the benchmark naturally limit the magnitude of excess returns relative to the index. Annualized returns exceeded the MSCI EAFE Index by 0.5 percentage points and typical foreign large-blend peers by 1.25 percentage points. This was achieved with somewhat higher volatility, leading to moderately superior risk-adjusted returns as measured by the Sharpe ratio. The tight constraints around the index are designed to ensure that stock selection, rather than sector, regional, or factor tilts, drives performance. Since its inception, selection has added value across the majority of sectors and regions, despite occasional periods of short-term weakness.

JPMorgan International Rsrch Enh Eq ETF's Prospectus Adjusted Expense Ratio is 0.24% per year. It places it in the cheapest quintile of the Morningstar US Fund Foreign Large Blend Category, where the median fee is 0.82% per year. This cost positioning translates into a Medalist Rating Price Score of 1.9, which reflects its relative price positioning within the category. The Price Score ranges from -2.50 (most expensive) to +2.50 (cheapest), with higher scores indicating better cost competitiveness.