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JPMorgan Small Cap Growth L JISGX

Medalist Rating as of | See JPMorgan Investment Hub
  • NAV / 1-Day Return 20.80  /  +0.24 %
  • Total Assets 3.9 Bil
  • Adj. Expense Ratio
    0.850%
  • Expense Ratio 0.850%
  • Distribution Fee Level Average
  • Share Class Type Retirement, Large
  • Category Small Growth
  • Investment Style Small Growth
  • Min. Initial Investment 3.0 Mil
  • Status Limited
  • TTM Yield
  • Turnover 33%

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 JISGX

Medalist rating as of .

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

null Morningstar Manager Research

Morningstar Manager Research

Summary

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

The strategy's sensible investment philosophy merits an Above Average Process Pillar rating. Independent of the rating, analysis of the strategy's portfolio shows it has maintained an overweight in liquidity exposure and an underweight in quality exposure compared with category peers. High liquidity exposure is attributed to stocks with a high trading volume, lending managers more flexibility. And a low quality exposure is rooted in stocks with higher financial leverage and lower profitability. The management team's large personal investment in the strategy helps it earn an Above Average People Pillar rating. 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 Growth Fund earns an Above Average Process Pillar rating.

The main contributor to the rating is the parent firm's five-year risk-adjusted success ratio of 57%. 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. Strong risk-adjusted performance also contributes to the process. This can be seen in the fund's five-year alpha calculated relative to the category index, which suggests that the managers have shown skill in their allocation of risk. Lastly, the process is limited by being an actively managed strategy. Historical data, such as Morningstar's Active/Passive Barometer, finds that actively managed funds have generally underperformed their passive counterparts, especially over longer time horizons.

This strategy hews closely to the market cap and investment style of its Small Growth category peers. Examining additional factor exposure, this strategy has held more highly liquid stocks compared to Morningstar Category Peers in the past 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 has also tilted toward low-quality stocks, companies with higher financial leverage and lower profitability over peers in recent years. Such positions do not tend to provide much ballast for a portfolio. Similarly, in recent months, the strategy also had less exposure to the Quality factor than peers. In addition, this strategy has exhibited a tilt toward higher-volatility stocks in these years, meaning companies that have a higher historical standard deviation of returns compared with peers. 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. 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 and consumer cyclical relative to the category average by 4.3 and 3.5 percentage points, respectively. The sectors with low exposure compared to category peers are financial services and communication services, with financial services underweighting the average portfolio by 5.8 percentage points of assets and communication services similar to the average. The portfolio is composed of 129 holdings and its assets are more dispersed than the typical peer in the category. In the most recent disclosure, 16.5% of the portfolio's assets were concentrated in the top 10 fund holdings, compared to the category average's 26.2%. And in closing, 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 Growth 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, boasts over 25 years of listed portfolio management experience. The average Morningstar Rating of the strategies they currently manage is 2.2 stars, reflecting below-average risk-adjusted performance in comparison to category peers. Eytan M. Shapiro is supported by an experienced team, being able to draw on three additional listed managers, who average 19 years of listed portfolio management experience. With at least one manager investing$ 1 million or more in this offering, investors can have some assurance that the team's interests are aligned with theirs.

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

This strategy’s Retirement share class has lapped 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 1.2 percentage points over a 10-year period. And it was also ahead of the category index, the Russell 2000 Growth Index, by 1.6 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 strong risk-adjusted results came with more volatility for investors. This strategy took on elevated risk, as measured by a higher standard deviation, 22.2%, compared to the benchmark's 20.7%. 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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It is important to be aware of fees, as lower-cost investments maximize investors' returns.

null Morningstar Manager Research

Morningstar Manager Research

Price

This share class lands in the cheapest quintile of its Morningstar Category. Its attractive expense ratio, paired with the fund’s People, Process, and Parent Pillars, suggests that this share class has the ability to deliver positive alpha versus its category benchmark, leading to its Morningstar Medalist Rating of Silver.

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Portfolio Holdings JISGX

  • Current Portfolio Date
  • Equity Holdings
  • Bond Holdings
  • Other Holdings
  • % Assets in Top 10 Holdings 16.1
Top 10 Holdings
% Portfolio Weight
Market Value USD
Sector

Super Micro Computer Inc

2.09 78.8 Mil
Technology

Simpson Manufacturing Co Inc

1.86 70.3 Mil
Basic Materials

Applied Industrial Technologies Inc

1.85 69.7 Mil
Industrials

Evolent Health Inc Class A

1.65 62.3 Mil
Healthcare

AAON Inc

1.55 58.5 Mil
Industrials

Rambus Inc

1.43 53.8 Mil
Technology

Casella Waste Systems Inc Class A

1.42 53.4 Mil
Industrials

Amicus Therapeutics Inc

1.41 53.2 Mil
Healthcare

ITT Inc

1.40 52.8 Mil
Industrials

e.l.f. Beauty Inc

1.39 52.5 Mil
Consumer Defensive