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JPMorgan Large Cap Value I HLQVX

Medalist Rating as of | See JPMorgan Investment Hub
  • NAV / 1-Day Return 18.98  /  0.42 %
  • Total Assets 3.6 Bil
  • Adj. Expense Ratio
    0.690%
  • Expense Ratio 0.690%
  • Distribution Fee Level Average
  • Share Class Type Institutional
  • Category Large Value
  • Investment Style Large Value
  • Min. Initial Investment 1,000,000
  • Status Open
  • TTM Yield 1.62%
  • Turnover 143%
unlocked

Morningstar’s Analysis HLQVX

Medalist rating as of .

A strong management team and sound investment process underpin JPMorgan Large Cap Value I'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 Large Cap Value I's Morningstar Medalist Rating of Silver.

null Morningstar Manager Research

Morningstar Manager Research

Summary

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

The strategy's managers invest alongside shareholders, which helps it earn a High 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 a considerable overweight position in liquidity exposure and volatility exposure compared with category peers. High liquidity exposure is attributed to stocks with a high trading volume, lending managers more flexibility. And high volatility exposure is rooted in stocks that have a higher standard deviation of returns. 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 determine how repeatable, consistent, and reliable it is, and whether management maintains a competitive advantage.

null Morningstar Manager Research

Morningstar Manager Research

Process

Above Average

JPMorgan Large Cap Value Fund 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 five-year risk-adjusted success ratio of 57% also supports the rating. The measure indicates the percentage of a firm's funds that survived and outperformed their respective category's median Morningstar Risk-Adjusted Return for the period. Their compelling success ratio suggests that the firm does well for investors and that this fund may benefit from that. 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, over time, has preferred smaller market-cap companies, compared with others in the Large Value Morningstar Category. But in terms of investment style, it is on par with peers. Looking at additional factor exposure, this strategy has consistently tilted toward companies with relatively higher trading volumes in the last few years. Such stocks may have less potential upside than illiquid holdings, but they are easier to trade during market downturns. In recent months, the strategy was more exposed to the Liquidity factor compared with its Morningstar Category peers as well. This strategy also has had an overweight bias to the volatility factor over these years, meaning it has owned companies that have a higher historical standard deviation of returns. 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. Compared with category peers, the strategy also had more exposure to the Volatility factor in the most recent month. This strategy also has tilted toward low-quality stocks, companies with higher financial leverage and lower profitability over these years. Such positions do not tend to provide much ballast for a portfolio. In recent months, the strategy also had less Quality 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 industrials by 3.1 percentage points in terms of assets compared with the category average, and its financial services allocation is similar to the category. The sectors with low exposure compared to category peers are basic materials and technology; however, the allocations are similar to the category. The strategy owns 94 securities and invests 27.6% of assets in its top 10 holdings, similar to the category average. And finally, in terms of portfolio turnover, this portfolio's holdings turn over more often than comparable products in its peer group, possibly resulting in higher costs for investors and a drag on performance.

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JPMorgan Large Cap Value Fund earns a High People Pillar rating.

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Morningstar Manager Research

People

High

The largest contributor to the rating is its parent firm's five-year success ratio of 58%. The measure indicates the percentage of a firm's funds that survived and beat their respective category's median return for the period. The combined average five-year excess return of each manager also strengthens the rating. It suggests that the funds they manage have outperformed the average manager. The stability of the management team further strengthens the rating. Specifically, the fund has not seen a manager change in the last nine years.

The team is backed by Scott Blasdell, the longest-tenured manager on the strategy, who brings over 25 years of listed portfolio management experience. The average Morningstar Rating of the strategies they currently manage is 3.4 stars, demonstrating encouraging risk-adjusted performance. Scott Blasdell has an experienced listed co-manager. Together, they average 13 years of listed portfolio management experience. The highest personal investment in this offering by any of its managers is at least $1 million. An investment of that size is large enough to align managers' interests with investors.

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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 Institutional share class has outstripped both its peers and the category benchmark.

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Morningstar Manager Research

Performance

This share class led its average peer by an annualized excess return of 2.1 percentage points over a 10-year period. And it also exceeded the return of the category benchmark, the Russell 1000 Value Index, by an annualized 1.8 percentage points over the same period.

The risk-adjusted performance only continues to make a case for this fund. The share class had a higher Sharpe ratio, a measure of risk-adjusted return, than the index over the trailing 10-year period. However, these returns were accompanied by additional risk, with a standard deviation of 18.6% compared to the benchmark's 15.4%. 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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By minimizing expenses, investors can maximize their expected returns.

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Morningstar Manager Research

Price

This share class sits in the second-cheapest quintile of its Morningstar Category. Its attractive expense ratio, in conjunction with the fund’s People, Process, and Parent Pillars, suggests that this share class is well-positioned to generate positive alpha versus its category benchmark, leading to its Morningstar Medalist Rating of Silver.

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Portfolio Holdings HLQVX

  • Current Portfolio Date
  • Equity Holdings 97
  • Bond Holdings 0
  • Other Holdings 2
  • % Assets in Top 10 Holdings 24.4
Top 10 Holdings
% Portfolio Weight
Market Value USD
Sector
4.78
173,899,287
Financial Services
2.57
93,484,984
Financial Services
2.40
87,302,155
Energy
2.35
85,312,638
Technology
2.34
85,146,097
Healthcare
2.05
74,707,084
Financial Services
2.05
74,475,422
Financial Services

Digital Realty Trust Inc

1.99
72,362,320
Real Estate
1.92
69,883,207
Industrials
1.92
69,729,110
Healthcare