Morningstar's evaluation of this fund's process seeks to understand management's investment philosophy, and whether it has been applied consistently over time and can add value across the market cycle. JPMorgan U.S. Applied Data Science Value earns an Above Average Process Pillar rating.
This strategy targets smaller plays than its peers’ average in the Large Value Morningstar Category. But in terms of investment style, the strategy is on par with peers. Looking at additional factor exposure, this fund tilts toward stocks with low trading volumes, which can be harder to trade than more-liquid holdings, particularly during periods of market stress. However, compared with Morningstar Category peers historically, the strategy is more exposed to the factor. This strategy has also tilted toward low-volatility stocks, meaning those that have a lower standard deviation of returns. These companies have historically been a valuable ballast to steady portfolio returns during market downturns. But when compared with category peers, the strategy has historically had more exposure. Additionally, this strategy's holdings include more companies with high dividend or buyback yields. Stocks with high yield exposure tend to be more mature, stable businesses, though some offer high yields because their earnings and share prices have plunged. Extreme business or market conditions also can cause either kind of company to suspend or cut their payouts. And the portfolio has more exposure than its Morningstar Category 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 has allocations in its top 2 sectors, industrials and financial services, that are similar to the average portfolio in the category. The sectors with low exposure compared to their category peers are technology and consumer defensive, with technology underweighting the average portfolio by 4.0 percentage points of assets and consumer defensive similar to the average. The portfolio is positioned across 97 holdings and is less top-heavy than peers. Specifically, 23.4% of the portfolio's assets are concentrated within the top 10 fund holdings, as opposed to the category average's 31.0%. And in closing, in terms of portfolio turnover, this fund trades less regularly than the typical peer in its category, which may result in a lower cost to investors.