On the surface, JAVA and JGRO look promising. Both ETFs carry Morningstar Medalist Ratings of “Silver,” a designation awarded to funds that Morningstar analysts have “high conviction will outperform the relevant index, or most peers, over a market cycle on a risk-adjusted basis.” That’s not a bad endorsement if you trust the judgement behind it. (Gold ratings are for the top 15%, where as silver ratings are for the next 35%.)
JPMorgan also promotes the relative historical outperformance of both funds. JAVA, for instance, highlights its results versus the Morningstar large value category average and the Russell 1000 Value Index. JGRO similarly claims outperformance versus its Morningstar peer category average.
U.S. active ETFs still struggle to outperform index ETFs
Benchmark comparisons can be carefully selected. Morningstar analyst ratings, while helpful, are still subject to authority bias. This means people may place too much trust in expert opinions even when those experts may be biased or wrong.
Looking at historical returns compared directly to widely available, low-cost U.S. benchmarks paints a more mixed picture. From October 5, 2021, through April 23, 2025, JAVA underperformed the popular Vanguard Value ETF (VTV), returning a 6.93% CAGR compared to VTV’s 7.59%.
Source: testfol.io
JGRO, on the other hand, only slightly outperformed the Vanguard Growth ETF (VUG) over its available window, returning 14.91% CAGR from August 9, 2022, through April 23, 2025, versus VUG’s 14.61%.
Source: testfol.io
That begs the question: why pay 0.44% for JAVA or JGRO when VTV and VUG offer similar performing large-cap value and growth exposure at just 0.04%? The cost gap is significant, and it becomes even harder to justify when you examine portfolio overlap.
As of April 24, there were 99 overlapping holdings between JAVA and VTV. That represents 61.5% of JAVA’s 165 holdings, and 30.4% of VTV’s 335 holdings. This level of overlap suggests a meaningful degree of similarity between the two portfolios, at least in terms of core holdings.
For JGRO, the overlap is slightly lower but still notable. It shares 58 holdings with VUG, which amounts to 51.8% of JGRO’s 114 stocks and 35.8% of VUG’s 170. Again, this suggests that despite the active mandate, there’s significant common ground between JGRO and its index-tracking counterpart.
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