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JPMorgan Mid Cap Value C JCMVX

Medalist Rating as of | See JPMorgan Investment Hub
  • NAV / 1-Day Return 33.76  /  +0.45 %
  • Total Assets 13.4 Bil
  • Adj. Expense Ratio
    1.640%
  • Expense Ratio 1.640%
  • Distribution Fee Level Low
  • Share Class Type Level Load
  • Category Mid-Cap Value
  • Investment Style Mid Value
  • Min. Initial Investment 1,000
  • Status Open
  • TTM Yield 0.51%
  • Turnover 12%

USD | NAV as of Feb 23, 2024 | 1-Day Return as of Feb 23, 2024, 11:54 PM GMT+0

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Morningstar’s Analysis JCMVX

Medalist rating as of .

A strong mix of quality and value.

Our research team assigns Bronze ratings to strategies they’re confident will outperform a relevant index, or most peers, over a market cycle on a risk-adjusted basis.

A strong mix of quality and value.

Senior Analyst Adam Sabban

Adam Sabban

Senior Analyst

Summary

The JPMorgan Mid Cap Value strategy, which includes VY JPMorgan Mid Cap Value, remains a good choice for investors thanks to its experienced leadership, analyst resources, and strong investment process.

This strategy’s biggest plus is proven and experienced managers who’ve steered it to success over many years. Jonathan Simon has served here since the mutual fund’s 1997 inception, while Larry Playford became comanager in 2004. Results over their joint tenures have been good in absolute terms but even better on a risk-adjusted basis. Rather than share decision-making authority of all stock picks, they share views on portfolio prospects, but each takes charge of specific sectors within their mid-cap investment universe. They’ve more recently benefited from a beefed-up analyst team comprising five individuals, an analytical edge relative to the strategy’s earlier years when it relied more heavily on the portfolio managers and the firm’s central research team.

The managers share a similar, risk-conscious investment style that has yielded benefits. While the portfolio usually lands in the value section of the Morningstar Style Box, it typically doesn’t get into deep-value territory because the managers prefer businesses with relatively healthier financials and less cyclicality than stocks trading at rock-bottom valuations. A quality tilt has led to less-volatile performance than the benchmark and has also served as ballast during down markets, such as 2022.

Investors should expect a reasonably diversified portfolio of around 115 stocks, low turnover, and a moderate level of differentiation from the benchmark. The managers don’t make large bets on any one stock—the largest position sizes tend to be around 2%-3% of assets—preferring to accrue smaller victories across the portfolio. It’s a plus that the team also covers small-cap stocks, such that they can pounce on an opportunity that appreciates into mid-cap territory. Similarly, the team benefits from Jonathan Simon’s experience managing large-value portfolio on other strategies, as well as the backing of a large core research group.

Although Simon has reached an age at which many retire, he intends to keep managing the strategy for the foreseeable future. Investors should take solace in Playford’s experience and track record when he does step aside.

Overall, this strategy remains a solid choice in the mid-value space.

Rated on Published on

This strategy’s sound and time-tested investment parameters earn an Above Average Process rating.

Senior Analyst Adam Sabban

Adam Sabban

Senior Analyst

Process

Above Average

Managers Jonathan Simon and Larry Playford have successfully employed their hybrid quality-and-value approach for many years. Both managers prefer steadier businesses with lower revenue cyclicality and earnings volatility. Their ideal stock has a healthy return on capital, reliable profitability, and a reasonable valuation. But they are willing to wade into stocks with greater uncertainty or operational headwinds as long as they feel strongly that the company has the financial strength to withstand a temporary rough patch. The managers pay close attention to position sizing to ensure higher-risk bets are smaller.

A stock’s enterprise value relative to its pretax earnings and its cash flow yield are some of the managers’ favorite metrics to assess a stock’s worth. The managers are long-term investors, often looking out three to five years ahead. They are typically inclined to ride their winners but are also keen to trim their gains to redeploy capital into cheaper stocks.

Historically, these parameters have produced a portfolio of relatively durable companies that has held up well in volatile market stretches such as 2008, 2011, and 2015 (all years when the benchmark produced a negative return). While performance stumbled in 2018's and 2020’s drawdowns as the managers misjudged the quality of certain holdings, it rebounded in 2021 and fared relatively better in 2022 thanks to better underwriting and portfolio positioning.

This strategy’s portfolio fits with its process. The core of the portfolio usually lands on the border of the value and blend sections of the Morningstar Style Box, reflective of the managers’ focus on the combination of growth, profitability, and valuation. The portfolio’s profitability metrics, such as average return on assets, are typically higher than the Russell Midcap Value Index. Such characteristics are often supported by a form of competitive advantage. Longtime holding AutoZone AZO receives a narrow Morningstar Economic Moat Rating thanks to its brand and cost advantages, while companies such as orthopedic-product maker Zimmer Biomet Holdings ZBH carry wide moat ratings.

The portfolio is well diversified across sectors and individual positions, usually holding 90–120 stocks, with 15%-20% of assets invested in the top 10 holdings. No stock can exceed a 5% weighting in the portfolio. However, the managers ensure there is sufficient differentiation from the Russell Midcap Value Index and aren’t afraid to be over- or underweight in particular sectors or industries. Mid-caps make up most of the portfolio, though they’ll make way for a smattering of small and large caps.

Rated on Published on

Veteran and accomplished portfolio managers support an Above Average People rating.

Senior Analyst Adam Sabban

Adam Sabban

Senior Analyst

People

Above Average

Two long-tenured managers anchor this strategy. Jonathan Simon has served here since the mutual fund’s 1997 inception. He is joined by Larry Playford, who started at J.P. Morgan in 1993 in a nonresearch role, became an analyst in 2022, and joined this strategy as comanager in late 2004. They’ve overseen a strong run of performance powered by stock selection, though results have been weaker in recent years. They were joined by comanager Gloria Fu from 2006 until February 2019, when she left after a period of poor performance in her consumer stock picks. The managers relied on shared core/value analyst resources for much of their tenure but added dedicated analysts from 2016 through 2019. The team has been stable in the years since.

Simon calls the shots in the financials, real estate, healthcare, and consumer sectors, while Playford is in charge of picks within the industrials, materials, utilities, energy, and technology sectors. Although their responsibilities differ, the managers meet with analysts jointly to gather insights.

Simon is now in his early 60s but intends to keep managing the fund for the near future. Playford’s experience and stock-picking success, along with a larger dedicated analyst team, should help ensure an orderly transition once Simon does step away.

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 long-term track record is stellar, though its advantage has dwindled over time.

Senior Analyst Adam Sabban

Adam Sabban

Senior Analyst

Performance

From its November 1997 inception through September 2023, the 11.1% annualized return of JPMorgan Mid Cap Value’s L shares easily outpaced the Russell Midcap Value Index’s 8.9%. However, much of that difference owes to the fund’s performance from inception through 2003. From that point onward, the fund has still tended to come ahead of the benchmark over various long-term holding periods, but the edge has been narrower and less consistent. It has, however, reliably beaten the mid-value Morningstar Category average. As of September 2023, the fund landed in the second quartile of peers over the trailing 10- and 15-year periods. Its results also get a boost after considering its lower risk profile (as measured by standard deviation), leading to benchmark-beating risk-adjusted performance.

The strategy’s quality focus typically pays off in down markets and hurts in up markets. It outperformed the benchmark in difficult years like 2008, 2011, and 2015 but notably lagged in 2009's and 2013’s rallies. However, it didn’t fare well in 2018 and 2020—two years featuring steep declines—because of stock-picking woes. To the managers’ credit, the fund rebounded versus the benchmark in 2021 and in 2022 thanks to better underwriting and portfolio positioning.

The fund is off to a subpar start in 2023 mostly because of a few struggling consumer stock picks. Through the first nine months of 2023, the L shares’ 0.8% loss lagged the 2.2% category average and 0.5% gain for the benchmark.

Published on

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

Senior Analyst Adam Sabban

Adam Sabban

Senior Analyst

Price

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 Bronze.

Published on

Portfolio Holdings JCMVX

  • Current Portfolio Date
  • Equity Holdings
  • Bond Holdings
  • Other Holdings
  • % Assets in Top 10 Holdings 16.7
Top 10 Holdings
% Portfolio Weight
Market Value USD
Sector

Ameriprise Financial Inc

1.96 258.9 Mil
Financial Services

Loews Corp

1.91 251.2 Mil
Financial Services

Cencora Inc Common Stock

1.67 220.5 Mil

Snap-on Inc

1.66 218.2 Mil
Industrials

Hubbell Inc

1.64 215.7 Mil
Industrials

ITT Inc

1.60 211.6 Mil
Industrials

Martin Marietta Materials Inc

1.60 211.6 Mil
Basic Materials

CMS Energy Corp

1.58 208.9 Mil
Utilities

M&T Bank Corp

1.55 204.1 Mil
Financial Services

Lincoln Electric Holdings Inc

1.53 202.1 Mil
Industrials