JPMorgan Mid Cap Growth Fund Class I HLGEX

At the right price, the JPMorgan Mid Cap Growth strategy gives investors a chance to come out ahead. A drop in the Morningstar Medalist Rating of some share classes isn’t attributable to reduced conviction in the strategy’s People or Process ratings but instead reflects a change in the way Morningstar calculates the excess return opportunity for funds.

The past 18 months for mid-growth managers have been a whirlwind, and even though this strategy has held up better than most, it has still been a difficult stretch. The Russell Midcap Growth Index benchmark has seen a large increase in concentration, particularly on account of its largest two constituents—Palantir and AppLovin—which combined to take up over 10% of the index by mid-June 2025. These high-growth stocks (Palantir in particular) have skyrocketed, marring the relative returns of managers who did not own them. This strategy, unlike some other fundamentally based rivals, has held these stocks partly to help mitigate tracking risk versus the benchmark. That said, it was still underweight in these two, which proved painful. The mutual fund’s institutional share class finished in the top half of peers over the trailing one-year period ending June 30, 2025, but it trailed the benchmark by over 11 percentage points.

Manager Felise Agranoff has continued to run her strategy in a benchmark-sensitive fashion, which helped recently, but remains an oddity within the mid-cap growth Morningstar Category. The portfolio is among the least distinguished versus its benchmark. The strategy continues to ply a process geared toward finding durable mid-cap winners that remain undervalued despite showing early signs of promise in both fundamentals and stock price.

Agranoff is still relatively early in her solo tenure on this strategy, having assumed control in March 2024, though she brings well over a decade of experience tied to this offering as an analyst, comanager, and manager. Despite the recent transition of comanager Daniel Bloomgarden to another role within the firm and some minor changes to the analyst team, a group of six analysts and newly promoted comanager Mike Stein are still a solid bunch that gives the strategy an edge.

This strategy's approach has merit, but a new manager taking control raises uncertainty regarding its execution, leading to an Average Process rating.

Former lead manager Tim Parton skillfully weaved his way around a growth-stock bubble while maintaining enough differentiation from the benchmark for performance to stand out net of fees. The approach is a bit unorthodox in that the portfolio is less differentiated from the benchmark than almost any over actively managed mid-growth peer. While it used to be bolder, poor performance in 2016 led to more conservative position sizing. Results since then have been encouraging, but the strategy benefited from a steady hand to guide it, and new lead manager Felise Agranoff isn't as proven as her predecessor at handling this delicate balance.

The core of the process will remain intact. The team looks for stocks with underappreciated growth prospects and some form of enduring advantage. Some holdings can be fast growers, while others steadier businesses, though the former has historically been the focus. The team likes to initiate positions in stocks with fundamentals inflecting higher, which leads to a price momentum tilt. The team does a good job of framing its outlook for a stock relative to what is priced in by markets, and will accordingly base its positioning around that dynamic.

This portfolio of 90-130 stocks is well-diversified and tends to roughly mirror the composition of its Russell Midcap Growth Index benchmark. As expected for a growth strategy, most of the assets tend to be invested in the technology, healthcare, and consumer discretionary sectors. However, in recent quarters, the portfolio has increased stakes in areas it historically avoided, such as real estate, utilities, and consumer staples, which brought its allocation closer to that of the benchmark.

The dispersion of stock weightings in the portfolio tends to be relatively flat. The largest positions at any given time tend to be around 2%-3% of assets, while the average weighting comes in around 1%. However, a decision to let the stake in Palantir float up near 5% of assets stands as a notable outlier, though it reached over 8% of assets in the benchmark at its peak.

The managers' attention to the benchmark keeps the portfolio anchored in the mid-growth section of the Morningstar Style Box. Cash usually runs below 2% of assets.

A preference, on balance, for fast-growing companies typically skews the fund away from entrenched businesses with established profits and toward those looking to take share from incumbents or blaze their own trail. Portfolio-level measures of profitability tend to run below the benchmark, while measures of expected and trailing growth tend to run higher.

A new lead manager has the background to pick up where her successful predecessor left off, helping support an Above Average People rating.

Having spent the vast majority of her 21 years at J.P. Morgan on this team as an analyst and then comanager, Felise Agranoff is an unsurprising successor to former manager Tim Parton. She's been mentored by Parton over her career and has done the same for others. While Parton had maintained the final say on portfolio decisions until his March 2024 departure, Agranoff was a key collaborator.

Agranoff and recently named comanager Mike Stein are supported by an experienced six-member analyst team averaging 15 years in the industry. The team has seen some analysts depart, including comanager/analyst Daniel Bloomgarden, who in 2025 stepped off the strategy to transfer to a different vertical within the firm, but it still has dedicated coverage in the mid-growth universe’s key areas. The firm’s willingness to part ways with analysts not meeting expectations, combined with its ability to attract strong talent, remain a healthy engine of change and improvement, though it must work to secure a more permanent talent roster. The team also powers JPMorgan Small Cap Growth; despite recent weakness, it has a decent long-term track record.

This group does most of the heavy lifting but can also lean on J.P. Morgan's central research analyst team for certain insights.

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.

This strategy’s track record has taken a hit but remains better than most peers.

Using the mutual fund’s institutional share class from Felise Agranoff's January 2016 start as a comanager, the fund's 12.6% annualized return through June 2025 beat its average peer by nearly 2 percentage points but trailed the Russell Midcap Growth Index by roughly 0.4 percentage points. Those returns came with roughly the same degree of volatility, as measured by standard deviation.

The fund's momentum bias helped produce particularly strong performance from 2017 through 2020 as the market rewarded high-multiple stocks with lofty expectations for future growth. Top picks over this period include electric automaker Telsa, software company Veeva Systems, and generator company Generac Holdings. However, what differentiated this fund is that it captured much of the bull market's upside but avoided some of the downside. Former manager Tim Parton became bearish on tech valuations following 2020's runup and reduced exposure to fast-growing companies, which provided prescient.

A wild 2024 and first half of 2025 have flipped the script for this and many other mid-growth funds. The benchmark climbed 26% in 2023, 22% in 2024, and nearly 10% through the first half of 2025, which has blown past active funds, largely on account of the performance of Palantir, whose shares have risen by over 600% over that stretch. Partly owing to a smaller stake in Palantir, as well as fellow artificial intelligence-driven star AppLovin, the fund lagged the benchmark by over 5 percentage points annualized over the trailing three-year period ending June 2025, though it still came comfortably ahead of the average peer. To be sure, other stock-picking errors hurt the fund too over the past 12 months, such as stakes in trucking company Saia and IT consultant Globant SA.

JPMorgan Mid Cap Growth I's Prospectus Adjusted Expense Ratio is 0.84% per year. It places it in the second-cheapest quintile of the Morningstar US Fund Mid-Cap Growth Category, where the median fee is 0.96% per year. This cost positioning translates into a Medalist Rating Price Score of 0.72, 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.