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JPMorgan Equity Income I HLIEX

Medalist Rating as of | See JPMorgan Investment Hub
  • NAV / 1-Day Return 24.08  /  +0.38 %
  • Total Assets 44.9 Bil
  • Adj. Expense Ratio
  • Expense Ratio 0.700%
  • Distribution Fee Level Average
  • Share Class Type Institutional
  • Category Large Value
  • Investment Style Large Value
  • Min. Initial Investment 1.0 Mil
  • Status Open
  • TTM Yield 1.95%
  • Turnover 8%

USD | NAV as of Jun 21, 2024 | 1-Day Return as of Jun 21, 2024, 12:13 AM GMT+0


Morningstar’s Analysis HLIEX

Medalist rating as of .

Still worthy despite a key retirement in 2024.

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.

Still worthy despite a key retirement in 2024.

Senior Analyst Todd Trubey

Todd Trubey

Senior Analyst


Lead manager Clare Hart plans to retire from JPMorgan Equity Income and the firm in fall 2024, which drives the People rating down from High to Above Average. While Hart has been essential to the strategy’s strong track record since 2004, it’s well-prepared to succeed after she retires. Until then, she remains a portfolio manager alongside Andrew Brandon and David Silberman.

In about a year, Brandon and Silberman will lead the seasoned five-person U.S. value team Hart has assembled. Brandon joined J.P. Morgan Asset Management as an equity analyst in 2000, joined this team in 2012, and became a named manager in 2019. Silberman joined J.P. Morgan Asset Management in 1989 and ran portfolios for private clients before serving as the firm’s corporate governance expert starting in 2008; he joined this team as a comanager in 2019. Dedicated analysts Tony Lee and Lerone Vincent joined the value team in 2018 and 2022, respectively. The managers will hire a veteran banking analyst within the year.

Hart and team have honed a process for two decades that doesn’t dazzle but has built stout portfolios. They seek 85-110 high-quality companies with reasonable valuations and the ability to maintain stable dividend yields of at least 2%. Their classic value philosophy says a pool of well-run but undervalued firms with reliable earnings and disciplined capital allocation will beat the market. The key is not in this perspective but in applying it with discipline, as this group has.

Since Hart became a portfolio manager in August 2004, the fund’s institutional shares have gained an annualized 9.1% through August 2023, versus 8.0% for the Russell 1000 Value Index and 7.3% for the typical large-value Morningstar Category peer. The strategy has topped rivals and the benchmark in each of the five U.S. bear markets over that stretch, often by large margins. Since Brandon and Silberman became managers, the strategy has landed between the typical peer and the index, with lower volatility.

Such a loss would often signal future mediocrity, but the well-built team and thorough approach instill confidence in this strategy, which is closed to new investors in the United States.

Rated on Published on

The approach here is simple, straightforward, and strong, meriting a High Process rating.

Senior Analyst Todd Trubey

Todd Trubey

Senior Analyst



The search for holdings starts with a never-ending scouring of the U.S. large-value universe for companies with consistent earnings, high returns on invested capital, conservative financials, and dividend yields of at least 2%. Those dividends must also be modest payouts of firms’ earnings to ensure the funding of future business growth. The team also investigates corporate management for evidence of capital discipline.

After establishing possible targets, the team looks for stocks with relatively low valuations it believes are trading at a discount to their intrinsic values. While the team uses different metrics for various industries, it generally starts with free cash flow yield and price- and enterprise-value multiples.

The process’ output is an 85- to 110-stock portfolio. The team caps each new entrant at 5% of assets but will allow older positions to grow past that level. The portfolio maintains exposure to each of the Russell 1000 Value Index’s sectors, but relative weightings can vary by up to 10 percentage points. The team is unusually patient even within the large-value category. In the three full years since Andrew Brandon and David Silverman became portfolio managers, the strategy’s turnover ratio has averaged just 18%, lower than 90% of category peers.

The portfolio’s statistical profile conforms to the process’s principles. As of July 2023, the portfolio’s return on equity and return on invested capital (metrics measuring business quality) were 23.8% and 14.8%, much higher than the Russell 1000 Value Index’s 16.9% and 10.8%. And the portfolio’s expected long-term cash flow growth was 12.1%, dominating the bogy’s 7.3%. Yet the portfolio’s price/free cash flow ratio of 21 was below the benchmark’s 24.

To generate its returns, the portfolio neither differs markedly from its benchmark nor produces unusually high income. As of August 2023, the strategy’s tracking error (a measure of how closely a portfolio’s returns follow a benchmark’s) of 3.2% was below the typical large-value peer’s 4.0% level. And while its 1.9% income return in 2022 was above average in the category, the top quintile averaged 2.5%.

On the stock level, the key differences between the strategy and its benchmark are active weightings rather than out-of-index picks. In July 2023, just 12 of the strategy’s 86 holdings were not in the benchmark, including blue chips such as Microsoft MSFT and Starbucks SBUX. The strategy’s hallmark is material overweightings of favored index constituents. Of the seven stocks that hold at least 2% of strategy assets, six were below-1% positions in the benchmark: Only ExxonMobil XOM constituted more than 2% of the index and was overweighted.

Rated on Published on

The lead manager’s future departure lowers this strategy’s People rating to Above Average from High.

Senior Analyst Todd Trubey

Todd Trubey

Senior Analyst


Above Average

In her 19 years as lead manager, Clare Hart built the team, refined the approach, and led the execution. So her departure will be a material loss of talent.

The rest of the value team that Hart assembled will remain, keeping an advantage over most peers. In November 2019, Andrew Brandon and David Silberman became listed portfolio managers here. Brandon started on this team in 2012 as an analyst. Silberman headed the firm’s equity investment director and corporate governance teams after managing private clients’ portfolios. They’ve worked together for four years and have complementary expertise: Brandon manages energy, materials, and industrial holdings, while Silberman manages the utilities, healthcare, telecom, and technology areas. Both have added value through stock picks since their managerial debuts.

The team now has two dedicated analysts and will soon add a third. Tony Lee joined the value team in 2018; he covers healthcare, insurance, and asset managers. Lerone Vincent joined this team in 2022, covering consumer stocks. Both came from the firm’s central analyst group. Soon the team will hire a banking expert—Hart’s core area of expertise.

This team also has access to J.P. Morgan Asset Management’s central analyst crew of 22, who average 21 years of industry experience.

This report was updated on Oct. 4, 2023, to correct Lerone Vincent's coverage.

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


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 has come through over the long term and in the worst of times.

Senior Analyst Todd Trubey

Todd Trubey

Senior Analyst


Over lead manager Clare Hart’s tenure thus far from August 2004 through August 2023, the fund’s institutional shares rose an annualized 9.1% versus 8.0% for the Russell 1000 Value Index category benchmark and 7.3% for the typical large-value category peer. For the shorter but crucial period after Andrew Brandon and David Silberman became portfolio managers in November 2019, the strategy’s 8.1% annualized return sat between the benchmark’s 7.8% and typical rival’s 8.3% gains.

More granular data suggests that the new comanagers have boosted returns through stock-picking. Attribution from both J.P. Morgan and Morningstar from November 2019 through August 2023 shows materially beneficial stock-picking in Brandon’s energy, materials, and industrial areas as well as Silberman’s utilities, healthcare, telecom, and technology sectors. Indeed, technology had the portfolio’s best stock selection from names such as Analog Devices Inc. ADI and Apple AAPL.

On Hart’s watch, the strategy’s hallmark has been solid defense in bear markets. The S&P 500 has had five drops of at least 20% since 2004. During those, the Russell 1000 Value Index’s average fall was 32% and the typical category peer’s average drop was 31%. This strategy’s institutional shares slid an average of 27%—materially better.

Altogether, while the strategy will likely slow its pace when Hart steps down, it will probably stay ahead of the pack.

Published on

It’s critical to evaluate expenses, as they come directly out of returns.

Senior Analyst Todd Trubey

Todd Trubey

Senior Analyst


Based on our assessment of the fund’s People, Process, and Parent Pillars in the context of these expenses, we think this share class will be able to deliver positive alpha relative to the category benchmark index, explaining its Morningstar Medalist Rating of Silver.

Published on

Portfolio Holdings HLIEX

  • Current Portfolio Date
  • Equity Holdings
  • Bond Holdings
  • Other Holdings
  • % Assets in Top 10 Holdings 22.3
Top 10 Holdings
% Portfolio Weight
Market Value USD

Wells Fargo & Co

3.03 1.4 Bil
Financial Services


2.91 1.3 Bil

Chevron Corp

2.39 1.1 Bil

Bank of America Corp

2.16 971.8 Mil
Financial Services

Charles Schwab Corp

2.04 916.4 Mil
Financial Services

Exxon Mobil Corp

2.04 914.9 Mil

Morgan Stanley

1.99 895.3 Mil
Financial Services

Analog Devices Inc

1.95 877.7 Mil

UnitedHealth Group Inc

1.93 867.7 Mil

American Express Co

1.89 849.1 Mil
Financial Services