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JPMorgan Small Cap Growth L JISGX

Medalist Rating as of | See JPMorgan Investment Hub
  • NAV / 1-Day Return 21.78  /  +1.40 %
  • Total Assets 3.9 Bil
  • Adj. Expense Ratio
    0.850%
  • Expense Ratio 0.850%
  • Distribution Fee Level Average
  • Share Class Type Retirement, Large
  • Category Small Growth
  • Investment Style Small Growth
  • Min. Initial Investment 3.0 Mil
  • Status Limited
  • TTM Yield
  • Turnover 33%

USD | NAV as of Mar 27, 2024 | 1-Day Return as of Mar 27, 2024, 10:19 PM GMT+0

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Morningstar’s Analysis JISGX

Medalist rating as of .

A strong management team and sound investment process underpin JPMorgan Small Cap Growth L's Morningstar Medalist Rating of Silver.

Our research team assigns Silver ratings to strategies that they have a high conviction will outperform the relevant index, or most peers, over a market cycle on a risk-adjusted basis.

A strong management team and sound investment process underpin JPMorgan Small Cap Growth L's Morningstar Medalist Rating of Silver.

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Morningstar Manager Research

Summary

The portfolio maintains a sizable cost advantage over competitors, priced within the cheapest fee quintile among peers.

The strategy's managers invest alongside shareholders, which helps it earn an Above Average People Pillar rating. The strategy's effective investment approach earns an Above Average Process Pillar rating. Independent of the rating, analysis of the strategy's portfolio shows it has maintained an overweight liquidity exposure and has a substantial underweight in quality exposure compared with category peers. High liquidity exposure is attributed to stocks with a high trading volume, lending managers more flexibility. And a low quality exposure is rooted in stocks with higher financial leverage and lower profitability. The strategy's parent organization earns the firm an Above Average Parent Pillar rating, and this rating is inherited from vehicles belonging to the same branding entity and is indirectly assigned by an analyst.

Rated on Published on

Morningstar's evaluation of this fund's process aims to determine how repeatable, consistent, and reliable it is, and whether management maintains a competitive advantage.

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Morningstar Manager Research

Process

Above Average

JPMorgan Small Cap Growth Fund earns an Above Average Process Pillar rating.

The most significant 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 beat their respective category's median Morningstar Risk-Adjusted Return for the period. The parent firm's impressive risk-adjusted performance, as shown by its average 10-year Morningstar Rating of 3.3 stars, also supports the process. Lastly, the process is limited by being an actively managed strategy. Historical data, like Morningstar's Active/Passive Barometer, finds that actively managed funds have generally underperformed their passive counterparts, especially over longer time horizons.

This strategy does not differentiate itself from its Small Growth category peers in terms of size and style exposure. Examining additional factor exposure, this strategy has held more highly liquid stocks compared to Morningstar Category Peers in the past few years. More-liquid assets contribute to more-flexible exit strategies without price changes and tend to be a ballast during market selloffs. For example, if the portfolio faces successive redemptions in a short period of time, it will be less likely to experience a significant loss. In recent months, the strategy was more exposed to the Liquidity factor compared with its Morningstar Category peers as well. This strategy has also tilted toward low-quality stocks, companies with higher financial leverage and lower profitability over peers in recent years. Lacking this ballast, the fund's prospects could rest on its ability to surpass peers during economic booms. Similarly, in recent months, the strategy also had less exposure to the Quality factor than peers. In addition, this strategy has exhibited a tilt toward higher-volatility stocks in these years, meaning companies that have a higher historical standard deviation of returns compared with peers. Such stocks tend to rise faster and fall harder than the broad market. High-volatility exposure contributes to stronger performance during bull markets, but often at the cost of losing more during downturns. In this month, the strategy also had more exposure to the Volatility factor over its peers. More information on a fund and its respective category's factor exposure can be found in the Factor Profile module within the Portfolio section.

The portfolio is overweight in technology and consumer cyclical relative to the category average by 4.5 and 3.3 percentage points, respectively. The sectors with low exposure compared to category peers are financial services and communication services, with financial services underweighting the average portfolio by 5.2 percentage points of assets and communication services similar to the average. The portfolio is composed of 134 holdings and is diversified among those holdings. In its most recent portfolio, 17.0% of the fund’s assets were concentrated in the top 10 fund holdings, as opposed to the category’s 26.1% average. And in closing, in terms of portfolio turnover, looking at year-over-year movements, 33% of the fund's holdings have changed, whether through increasing, decreasing, or changing a position.

Rated on Published on

JPMorgan Small Cap Growth Fund earns an Above Average People Pillar rating.

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Morningstar Manager Research

People

Above Average

Eytan M. Shapiro’s veteran status, with over 25 years of listed portfolio management experience, brings a wealth of experience to the table. The strategies they currently manage have an average Morningstar Rating of 2.3 stars, demonstrating disappointing risk-adjusted performance compared with category peers. Eytan M. Shapiro is supported by an experienced team, being able to draw on three additional listed managers, who average 19 years of listed portfolio management experience. As a team, they manage two investment vehicles together, with a Silver asset-weighted average Morningstar Medalist Rating, indicating the potential to deliver positive alpha in aggregate. With at least one manager investing$ 1 million or more in this offering, investors can have some assurance that the team's interests are aligned with theirs.

Note: The People Pillar rating is indirectly assigned by an analyst. At least one of the managers on this fund manages a different product rated by an analyst. The analyst-assigned People Pillar rating(s) for these managers are combined with algorithmic scores for any non-covered managers on a tenure-weighted basis.

Rated on Published on

A well-resourced, thoughtful, and disciplined steward of client assets, JPMorgan Asset Management maintains an Above Average Parent rating.

Associate Director Emory Zink

Emory Zink

Associate Director

Parent

Above Average

As of 2022, this investment stalwart manages more than USD 2.5 trillion in AUM. Composed of various global cohorts and diverse asset classes, the firm has more tightly integrated its capabilities in recent years, notably through the development of proprietary analytical and risk systems. Investment teams are robustly staffed and helmed by seasoned contributors. The firm’s strategies tend to produce reliable portfolios, and several flagship offerings are Morningstar Medalists. Manager incentives align with fundholders'; compensation reflects longer-term performance factors, and portfolio managers invest in the firm’s strategies as part of their compensation plans.

The firm’s funds tend to be well-priced, but they aren’t as competitive as many highly regarded peers of similar scale. Recent product launches include thematic and single-country strategies, both of which carry the potential for volatile performance and flows, along with misuse by investors. The firm remains intrepid when it comes to developing an environmental, social, and governance-focused framework and continues to move into other areas such as direct indexing through its 55iP acquisition and China through its joint venture, but these complicated initiatives take time to assess any real and lasting effect.

Rated on Published on

Outpacing both its peers and the category benchmark, this strategy’s Retirement share class, has had a noteworthy track record.

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Morningstar Manager Research

Performance

Over a 10-year period, this share class outperformed the category’s average return by 1.5 percentage points annualized. And it was also ahead of the category index, the Russell 2000 Growth Index, by 2.0 percentage points over the same period.

The risk-adjusted performance only continues to make a case for this fund. The share class outstripped the index with a higher Sharpe ratio, a measure of risk-adjusted return, over the trailing 10-year period. However, these returns were accompanied by additional risk, with a standard deviation of 22.4% compared to the benchmark's 20.8%. However, the share class proved itself ineffective as it was unable to generate alpha, over the same 10-year period, against the category group index: a benchmark that encapsulates the performance of the broader asset class.

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Fees compound over time and reduce returns, making it critical for investors to minimize expenses.

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Morningstar Manager Research

Price

This share class is within the cheapest quintile of its Morningstar Category. Its competitive expense ratio, taken together with the fund’s People, Process, and Parent Pillars, suggests that this share class has high potential to deliver positive alpha against its category benchmark, leading to its Morningstar Medalist Rating of Silver.

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Portfolio Holdings JISGX

  • Current Portfolio Date
  • Equity Holdings
  • Bond Holdings
  • Other Holdings
  • % Assets in Top 10 Holdings 17.0
Top 10 Holdings
% Portfolio Weight
Market Value USD
Sector

Super Micro Computer Inc

3.21 115.6 Mil
Technology

Applied Industrial Technologies Inc

1.92 69.2 Mil
Industrials

Simpson Manufacturing Co Inc

1.73 62.4 Mil
Basic Materials

e.l.f. Beauty Inc

1.56 56.4 Mil
Consumer Defensive

AAON Inc

1.50 54.0 Mil
Industrials

Rambus Inc

1.46 52.5 Mil
Technology

ITT Inc

1.44 51.9 Mil
Industrials

Casella Waste Systems Inc Class A

1.44 51.9 Mil
Industrials

Comfort Systems USA Inc

1.42 51.2 Mil
Industrials

CyberArk Software Ltd

1.37 49.4 Mil
Technology