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JPMorgan Small Cap Blend I JDSCX

Medalist Rating as of | See JPMorgan Investment Hub
  • NAV / 1-Day Return 30.59  /  −1.54 %
  • Total Assets 1.4 Bil
  • Adj. Expense Ratio
    0.990%
  • Expense Ratio 0.990%
  • Distribution Fee Level Above Average
  • Share Class Type Institutional
  • Category Small Blend
  • Investment Style Small Growth
  • Min. Initial Investment 1.0 Mil
  • Status Open
  • TTM Yield 0.34%
  • Turnover 37%

USD | NAV as of Jun 14, 2024 | 1-Day Return as of Jun 14, 2024, 10:53 PM GMT+0

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Morningstar’s Analysis JDSCX

Medalist rating as of .

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

null Morningstar Manager Research

Morningstar Manager Research

Summary

The strategy charges fees in line with its similarly distributed peers, priced within the middle quintile.

The management team's considerable industry experience drives an Above Average People Pillar rating for the strategy. The strategy's investment approach stands out and earns an Above Average Process Pillar rating. Independent of the rating, analysis of the strategy's portfolio shows it has maintained an underweight position in quality exposure and momentum exposure compared with category peers. Low quality exposure is attributed to stocks with higher financial leverage and lower profitability. And low momentum exposure is rooted in holding stocks that are not currently on a winning streak and instead holding those that managers believe are undervalued. 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 aims 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 Small Cap Blend Fund earns an Above Average Process Pillar rating.

The leading factor in the rating is the fund's impressive 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 impressive 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, like Morningstar's Active/Passive Barometer, finds that actively managed funds have generally underperformed their passive counterparts, especially over longer time horizons.

This strategy has more exposure to the Growth factor than the Small Blend Morningstar Category average. But in terms of size exposure, it is similar to the average. Looking at additional factor exposure, this strategy has consistently favored low-quality stocks compared with Morningstar Category peers over the past few years. Lacking this ballast, the fund's prospects could rest on its ability to surpass peers during economic booms. In the latest month, the strategy was also less exposed to the Quality factor compared with Morningstar Category peers. This strategy has also demonstrated a bias towards lower-momentum stocks over its peers over the past years. Momentum strategies typically bet that stocks that have recently outperformed will continue to do so, and those that have recently underperformed will keep lagging. Avoiding the former and buying the latter could indicate that managers are averse to chasing momentum. Similarly, in recent months, the strategy also had less exposure to the Momentum factor than peers. Additionally, the managers have consistently taken on more risk, demonstrated by higher volatility exposure than peers. This orientation tends to pay off most prominently when markets are hot. In this month, the strategy also had more exposure to the Volatility factor over 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 technology by 3.7 percentage points in terms of assets compared with the category average, and its healthcare allocation is similar to the category. The sectors with low exposure compared to category peers are financial services and industrials; however, the allocations are similar to the category. The portfolio is positioned across 246 holdings and its assets are more dispersed than peers in the category. In particular, 11.4% of the strategy's assets are concentrated in the top 10 fund holdings, as opposed to the category average's 24.4%. And finally, in terms of portfolio turnover, this fund trades less frequently than the category’s average, potentially limiting costs to investors.

Rated on Published on

JPMorgan Small Cap Blend Fund earns an Above Average People Pillar rating.

null Morningstar Manager Research

Morningstar Manager Research

People

Above Average

Eytan M. Shapiro, the longest-tenured manager on the strategy, provides strong guidance, offering over 25 years of listed portfolio management experience. Despite having a small team, the two listed managers boast over 30 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.

Note: The People Pillar rating is indirectly assigned by an analyst. At least one of the managers on this fund manages a different product rated by an analyst. The analyst-assigned People Pillar rating(s) for these managers are combined with algorithmic scores for any non-covered managers on a tenure-weighted basis.

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

Performance-wise, this strategy's Institutional share class, with returns reported in US Dollar, has demonstrated it is resilient over a full market cycle, with notable returns compared with peers and when adjusted for risk.

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Morningstar Manager Research

Performance

The share class outstripped the category index, Russell 2000 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 hewed close to the benchmark's standard deviation. Finally, the share class proved itself ineffective as it was unable to generate alpha, over the same period, against the category group index: a benchmark that encapsulates the performance of the broader asset class.

Fortunately, when looking at the fund's long-term absolute returns, it came out ahead. On a 10-year basis, this share class beat the category index on an annualized basis by 3.5 percentage points. It has also beaten its average peer by an annualized 2.4 percentage points, over the same 10-year period.

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It is imperative to evaluate fees, which compound over time and reduce returns.

null Morningstar Manager Research

Morningstar Manager Research

Price

This share class lands in the middle quintile of its Morningstar Category. Its middling fee, in conjunction with the fund’s People, Process, and Parent Pillars, suggests that this share class has the ability to deliver positive alpha relative to its category benchmark, explaining its Morningstar Medalist Rating of Silver.

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Portfolio Holdings JDSCX

  • Current Portfolio Date
  • Equity Holdings
  • Bond Holdings
  • Other Holdings
  • % Assets in Top 10 Holdings 11.2
Top 10 Holdings
% Portfolio Weight
Market Value USD
Sector

JPMorgan Prime Money Market Inst

1.93 27.5 Mil
Cash and Equivalents

Super Micro Computer Inc

1.74 24.7 Mil
Technology

Applied Industrial Technologies Inc

1.47 20.9 Mil
Industrials

Comfort Systems USA Inc

1.19 17.0 Mil
Industrials

Matador Resources Co

1.18 16.8 Mil
Energy

AAON Inc

1.06 15.0 Mil
Industrials

Selective Insurance Group Inc

1.06 15.0 Mil
Financial Services

Cactus Inc Class A

0.94 13.4 Mil
Energy

Chord Energy Corp Ordinary Shares - New

0.91 12.9 Mil
Energy

Encompass Health Corp

0.91 12.9 Mil
Healthcare