JPMorgan Emerging Markets Equity Fund Class I JEMSX

The JPM Emerging Markets strategy’s highly experienced management team, as well as the group’s extensive resources and well-codified investment process, underpin our positive view. We reiterate the strategy’s People and Process ratings at High and Above Average, respectively.

The strategy is led by Leon Eidelman, who has been the primary decision-maker since January 2015, when he was appointed comanager alongside then-lead-manager Austin Forey. Forey is head of the emerging markets fundamental team at J.P. Morgan and remains a backup here. John Citron was appointed comanager in March 2025, adding further experience from the emerging markets fundamental team.

The emerging markets fundamental team has been strengthened with four dedicated analysts. Three have joined over the past 12 months (Jack Norris, Dilara Saygi, and Yiping Gou), with a fourth expected to join in the coming months. Each analyst is fully dedicated to the fundamental team and covers a specific sector: Norris (industrials), Saygi (financials), Gou (consumer), and the fourth analyst (technology).

These analysts will work alongside the broader emerging-markets and Asia-Pacific sector analysts, contributing to idea generation and responding to manager priorities. This structure is intended to address current gaps and improve idea generation, as the EMAP sector analysts cover a relatively fixed universe of stocks, support multiple strategies, and typically do not conduct cross-country comparisons.

Management is further supported by the wider EMAP equities team, which consists of more than 100 investment professionals. As part of a broader review of the China research platform aimed at improving stock selection, David Gleeson was appointed head of China research in 2024. This prompted a restructuring of the analyst team over the past 18 months, including several departures and the hiring of six senior analysts to strengthen research capabilities.

While the core quality growth process remains unchanged, several enhancements have been implemented in 2025. These include the rollout of an industry framework to better challenge analysts’ forecasts and incorporate a more consistent macro perspective; the introduction of predetermined game plans to support investment-thesis monitoring and inform position sizing; and the creation of analysts’ hypothetical accounts, which highlight their highest-conviction ideas.

Process enhancements and strengthening of the EMAP research platform have driven a repositioning of the portfolio, resulting in improved performance and stronger stock selection. The strategy delivered a robust outcome in 2025, and its long-term track record remains solid, outperforming all key benchmarks over Leon Eidelman’s tenure from Jan. 1, 2015, to Jan. 31, 2026.

We believe this is a high-caliber approach, which has many strengths in terms of its structure, discipline, and consistency, earning an Above Average Process rating.

The approach favors quality growth companies. The team seeks firms that boast quality franchises, consistent earnings streams, and solid returns on equity. To execute the approach, the managers leverage the team's country specialists and sector/product analysts. Sector/product analysts conduct in-depth fundamental research on prospective ideas and assign five-year expected return targets. Analysts also classify stocks on their coverage lists as premium, quality, or standard, according to the firm's strategic classification framework, which is based on a 98-point questionnaire. Premium and quality names operate in attractive industries with limited external risks and possess strong balance sheets, good management teams, and solid cash flow generation prospects, while trading names lack durable competitive advantages. The vast majority of assets are allocated to premium and quality names, with standard and structurally challenged names making up only a small portion. The team’s valuation framework helps to ensure the managers pay the right price for the opportunity, although they are prepared to pay up for quality and growth.

While the core quality growth process remains unchanged, several enhancements have been implemented in 2025. These include the rollout of an industry framework to better challenge analysts’ forecasts and incorporate a more consistent macro perspective; the introduction of predetermined game plans to support investment-thesis monitoring and inform position sizing; and the creation of analysts’ hypothetical accounts, which highlight their highest-conviction ideas.

The portfolio holds 60 to 80 stocks, with no formal constraints at the country or sector levels. The portfolio tends to exhibit higher quality metrics (ROE, ROIC) compared with the index and peers given the focus on quality franchises with durable competitive advantages and consistent cash flow generation. As of January 2026, 16% of the portfolio was invested in the premium bucket and 46% in the quality bucket, while 36% of equity was invested in standard names.

The portfolio continues to be positioned to benefit from the secular growth in emerging-market consumption. Current high-conviction sectors in the portfolio include industrials, consumer discretionary, and technology, while the most notable underweightings remain in materials. Elsewhere, the team favors North Asian technology companies benefiting from the artificial intelligence infrastructure buildout and sees an attractive blend of growth and value across parts of the semiconductor supply chain.

At the country level, there is a structural preference for Indian companies, where the team finds many businesses with strong economics, duration of growth, and governance. In China, the portfolio remains close to neutral, with a focus on select technology companies advancing in AI and industrials. During 2025, consumer holdings such as Sands China were sold, while positions were initiated in Meituan and BYD. Later in the year, the portfolio added industrial names including Shenzhen Inovance Technology and Sieyuan Electric.

The People Pillar is maintained at High, reflecting Leon Eidelman’s expertise, as well as the strength of the supporting EMAP team.

The strategy is led by Leon Eidelman, who has been the primary decision-maker since January 2015, when he was appointed comanager alongside then lead manager Austin Forey. Forey continues to serve in a backup capacity. In March 2025, John Citron was appointed comanager, a welcome addition given his tenure on the emerging markets fundamental team since 2017 and his deep familiarity with the investment process.

The strategy is further supported by members of the emerging markets fundamental team, led by Austin Forey, including Amit Mehta and Weiying Dong. In addition, four dedicated analysts have been added to strengthen resources. Three have joined over the past 12 months (Jack Norris, Dilara Saygi, and Yiping Gou), with a fourth expected to join in the coming months. Each analyst is fully dedicated to the fundamental team and covers a specific sector: Norris (industrials), Saygi (financials), Gou (consumer), and the fourth analyst (technology).

These analysts will work alongside the broader EMAP sector analysts, contributing to idea generation and responding to manager priorities. This structure is intended to address current gaps and improve idea generation, as the EMAP sector analysts cover a relatively fixed universe of stocks, support multiple strategies, and typically do not conduct cross-country comparisons.

Management is further supported by the wider EMAP equities team, which consists of more than 100 investment professionals. As part of a broader review of the China research platform aimed at improving stock selection, David Gleeson was appointed head of China research in 2024. This prompted a restructuring of the analyst team over the past 18 months, including several departures and the hiring of six senior analysts to strengthen research capabilities.

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.

Since Eidelman became the primary decision-maker here in January 2015 through the end of January 2026, the UK-domiciled fund has returned 8.7% annualized (in GBP terms), compared with the 7.7% and 6.7% respective returns for the MSCI Emerging Markets Index and emerging-market peers, respectively. Given the focus on quality growth here, we would expect the strategy to perform well in markets driven by earnings and fundamentals and hold up better than peers during down markets but lag in value rallies.

In 2024, the fund underperformed the index and peers, mainly owing to weak stock selection in China and India. In China, for much of the year, the overall risk-off sentiment favored state-owned enterprises and higher-yielding stocks, where the strategy is underweight. Also, healthcare holdings in Wuxi Apptec and Wuxi Biologics were negatively affected by geopolitical tensions and earnings cuts. In India, the primary performance impact came from not owning a wide range of small- and mid-cap companies.

In 2025, the fund outperformed all its key benchmarks. Stock selection in the technology sector, particularly across Asia, was a major contributor to performance. This was driven by an overweight position in SK Hynix, a leading South Korean memory manufacturer, as well as holdings in Taiwanese companies such as Delta Electronics and Wiwynn, and China-based Montage Technology. An underweight allocation to India, combined with strong stock selection within the market, also supported returns.

JPMorgan Emerging Markets Equity I's Prospectus Adjusted Expense Ratio is 0.94% per year. It places it in the second-cheapest quintile of the Morningstar US Fund Diversified Emerging Mkts Category, where the median fee is 1.04% 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.