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Undiscovered Managers Behavioral Val L UBVLX

Medalist Rating as of | See JPMorgan Investment Hub
  • NAV / 1-Day Return 83.97  /  +0.56 %
  • Total Assets 9.4 Bil
  • Adj. Expense Ratio
    0.900%
  • Expense Ratio 0.900%
  • Distribution Fee Level Above Average
  • Share Class Type Retirement, Large
  • Category Small Value
  • Investment Style Small Value
  • Min. Initial Investment 3.0 Mil
  • Status Limited
  • TTM Yield 1.59%
  • Turnover 39%

USD | NAV as of Jul 12, 2024 | 1-Day Return as of Jul 12, 2024, 10:20 PM GMT+0

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Morningstar’s Analysis UBVLX

Medalist rating as of .

A strong management team and sound investment process underpin Undiscovered Managers Behavioral Val L's Morningstar Medalist Rating of Gold.

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

A strong management team and sound investment process underpin Undiscovered Managers Behavioral Val L's Morningstar Medalist Rating of Gold.

null Morningstar Manager Research

Morningstar Manager Research

Summary

The portfolio maintains a cost advantage over competitors, priced within the second-lowest fee quintile among peers.

The strategy's managers invest alongside shareholders, which helps it earn a High People Pillar rating. The strategy's sensible investment philosophy earns an Above Average Process Pillar rating. Low quality exposure is attributed to stocks with higher financial leverage and lower profitability. And a high yield exposure is rooted in holding high dividend-paying or buyback stocks. 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 seeks to understand management's investment philosophy, and whether it has been applied consistently over time and can add value across the market cycle.

null Morningstar Manager Research

Morningstar Manager Research

Process

Above Average

Undiscovered Managers Behavioral Val Fd earns an Above Average Process Pillar rating.

The leading factor in the rating is the fund's strong long-term risk-adjusted performance. This can be seen in its five-year alpha calculated relative to the category index, which suggests that the managers have shown skill in their allocation of risk. The parent firm's excellent risk-adjusted performance, as shown by its average 10-year Morningstar Rating of 3.3 stars, also influences the rating. Lastly, the process is limited by being an actively managed strategy. Historical data, such as Morningstar's Active/Passive Barometer, finds that actively managed funds have generally underperformed their passive counterparts, especially over longer time horizons.

This strategy prefers more value-oriented stocks compared with the average fund in its peer group, the Small Value Morningstar Category. But in terms of market capitalization, it is on par with peers. Looking at additional factor exposure, this strategy tilts consistently toward stocks with lower quality or the shares of companies with more financial leverage and lower profitability, compared with Morningstar Category peers over the past few years. Such positions do not tend to provide much ballast for a portfolio. In the latest month, the strategy was also less exposed to the Quality factor compared with Morningstar Category peers. This strategy's portfolio also has had exposure to more stocks with high dividend or buyback yields over peers in these years. High-yield stocks tend to be associated with more mature, profitable businesses that can grow as well as provide a stream of income. Such stocks could suffer, however, if setbacks force them to cut their dividends. Compared with category peers, the strategy also had more exposure to the Yield factor in the most recent month. Moreover, this strategy has been underweighting momentum stocks during these years. Momentum tends to be a powerful force in asset markets, as stocks that have done well recently usually continue to do so in the short term. As top performers change, this can sometimes be hard to capture without higher trading costs. In recent months, the strategy also had less Momentum factor exposure than 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 financial services and utilities relative to the category average by 13.1 and 5.4 percentage points, respectively. The sectors with low exposure compared to category peers are technology and industrials, underweight the average by 7.7 and 4.2 percentage points of assets, respectively. The portfolio is composed of 100 holdings and invests 30.3% of assets in its top 10 holdings, similar to the category average. And finally, in terms of portfolio turnover, this fund trades less regularly than the typical peer in its category, which may result in a lower cost to investors.

Rated on Published on

Undiscovered Managers Behavioral Val Fd earns a High People Pillar rating.

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Morningstar Manager Research

People

High

The primary contributor to the rating is its parent firm's five-year success ratio of 55%. The measure indicates the percentage of a firm's funds that survived and outperformed their respective category's median return for the period. The rating also gains because a manager has at least$ 1 million invested in the strategy, which aligns their interests with fundholders. The portfolio managers' outperformance at the funds they run, as measured by their combined three-year manager excess returns, strengthens the rating further.

David M. Potter’s veteran status, with 19 years of listed portfolio management experience, brings a wealth of experience to the table. Despite having a small team, the two listed managers boast 13 years of listed portfolio management experience.

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

This strategy’s Retirement share class has lapped both its peers and the category benchmark.

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Morningstar Manager Research

Performance

Over a 10-year period, this share class outpaced the category's average return by 2.6 percentage points annualized. And it also outperformed the category index, the Russell 2000 Value Index, by an annualized 2.8 percentage points over the same period.

The risk-adjusted performance only continues to make a case for this fund. The share class led the index with a higher Sharpe ratio, a measure of risk-adjusted return, over the trailing 10-year period. Often, higher returns are associated with more risk. However, this strategy stayed in line with the benchmark's standard deviation. 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 are one of the most predictive factors of future performance.

null Morningstar Manager Research

Morningstar Manager Research

Price

This share class lands in the second-cheapest quintile of its Morningstar Category. Its attractive fee, considered jointly with the fund’s People, Process, and Parent Pillars, suggests that this share class can deliver positive alpha compared with its category benchmark, explaining its Morningstar Medalist Rating of Gold.

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Portfolio Holdings UBVLX

  • Current Portfolio Date
  • Equity Holdings
  • Bond Holdings
  • Other Holdings
  • % Assets in Top 10 Holdings 29.5
Top 10 Holdings
% Portfolio Weight
Market Value USD
Sector

Citizens Financial Group Inc

3.72 345.4 Mil
Financial Services

JPMorgan Prime Money Market Inst

3.42 317.3 Mil
Cash and Equivalents

KeyCorp

3.33 309.5 Mil
Financial Services

Devon Energy Corp

3.19 295.8 Mil
Energy

Old National Bancorp

3.13 290.7 Mil
Financial Services

Healthpeak Properties Inc

2.96 274.6 Mil
Real Estate

F N B Corp

2.94 273.0 Mil
Financial Services

Ensign Group Inc

2.69 249.4 Mil
Healthcare

Graphic Packaging Holding Co

2.64 245.1 Mil
Consumer Cyclical

Berry Global Group Inc

2.46 228.1 Mil
Consumer Cyclical