JPMorgan U.S. Large Cap Core Plus Fund Class I Shares JLPSX

The team’s proven ability to effectively exploit the firm’s deep and successful bench of analysts through both short and long positions in a highly risk-controlled way sets the strategy apart, supporting a People Pillar rating of Above Average and a Process Pillar of High, even in light of an upcoming comanager retirement.

Long tenured manager Susan Bao, who has led this strategy since its 2005 inception (and its offshore counterpart since 2007), remains the anchor of the franchise. Bao joined J.P. Morgan in 1997 and began managing money in 2001 on the firm’s long-only US equity strategy. Steven Lee joined Bao as comanager in 2018. Lee, who will retire in the third quarter of 2026, brings nearly three decades of experience. His long-short expertise, strengthened through his management of JPMorgan Research Market Neutral since 2014, has been valuable to this strategy’s 30/30 extension. His upcoming departure will be a loss, but the extended transition window and his continued presence until retirement help mitigate disruption. Bao’s deep familiarity with the firm’s investment process and her extensive long-only and long-short experience provide additional comfort. To prepare for the upcoming change, Andrew Stern and Tim Woodhouse were appointed comanagers on June 30, 2025. Both joined the firm in 2008 and bring a blend of US and global equity portfolio management experience alongside quantitative expertise. In July 2025, Bao, Stern, and Woodhouse were added to the Research Market Neutral strategy, reinforcing continuity in the long-short framework after Lee’s retirement.

The process is designed to systematically capitalize on analyst insights by taking long positions in highly rated companies while shorting stocks disliked by the analysts. Short exposure generally stands at 20% to 30%, with the portfolio's net exposure to the market kept at 100%. The managers aim to generate alpha mainly through stock-picking, keeping the portfolio broadly diversified across around 260 holdings and avoiding outsize bets on sector, style, or macro tilts.

The strategy’s long-term track record under Bao's watch remains impressive, outperforming both the Morningstar Category average and the Morningstar US Large Mid Growth NR USD category index over multiple time horizons with a high information ratio, despite pockets of recent weakness. Since Lee joined in 2018 through December 2025, results have continued to be strong, with both long and short positions contributing positively. However, relative performance softened in 2025, primarily because of weak stock selection in software and services (notably Salesforce), health services (UnitedHealth), and retail.

The strategy rests on a clearly designed and consistently applied bottom-up process that is built to fully tap the strength of the firm’s deep bench of sector analysts through both long and short ideas. The managers’ demonstrated ability to effectively harness the alpha potential embedded in the analyst platform distinguishes this approach and supports a High Process Pillar rating.

The vast analytical resources backing the strategy remain central to its effectiveness. The fundamental research framework focuses on identifying each company’s competitive positioning, earnings durability, and catalysts for change, allowing analysts to differentiate more resilient franchises from structurally weaker ones. To guide this assessment, the team applies a strategic classification system that categorizes companies as premium, quality, trading, or structurally challenged based on industry economics, sustainability of value creation, and governance considerations. Premium and quality names typically feed the long side of the portfolio, while structurally challenged firms often serve as shorting candidates.

This qualitative work is paired with long-term valuation forecasts derived from an in-house dividend-discount model that incorporates analysts’ earnings, cash flow, and growth expectations. Analysts then rank stocks within their coverage sectors based on estimated fair value. The managers integrate these rankings into their stock selection, overlaying modest sector preferences that reflect their macroeconomic perspective.

The long book is broadly diversified, dominated by first- and second-quintile ideas, though lower-ranked holdings may be used for risk balancing. The 30/30 extension is run to remain broadly neutral in sector, style, and beta terms, with short positions sourced mainly from the lowest quintiles. The managers may also express both long and short views around secular themes. Short positions are sized and timed carefully, given their inherent volatility, resulting in a wide range of smaller positions and a total holdings count typically between 250 and 300. While the team members do not employ hard stop loss rules, they reassess any position that moves roughly 20% against them.

The strategy’s gross exposures typically average around 130% long and 30% short, keeping net market exposure close to 100%. Sector deviations are limited to plus or minus 5% relative to the sector’s weight in the S&P 500. Individual long positions are generally kept within plus/minus 4% of a stock’s index weight, while short positions are limited to a maximum of negative 3% relative to the index's weight. Based on the long book, this translates into an active share that has typically ranged between 70 and 80%, but it has recently slipped below 70% as rising benchmark concentration makes it harder to maintain high differentiation while managing benchmark-relative risk. However, the short positions provide additional differentiation.

Implementation differs slightly across vehicles: the US-domiciled fund can short stocks directly, whereas the offshore version uses derivatives. The portfolios remain broadly similar, although the offshore fund’s Article 8 SFDR designation leads to a small number of exclusions for sustainability reasons. The managers have increased concentration in the long-only sleeve since mid 2021, but the portfolio continues to be well diversified, without significant factor tilts. The risk of not owning a large benchmark constituent is also considered, making it unlikely for the fund to run a zero weight in major index heavyweights. As of the end of January 2026, the managers held long positions in all of the Magnificent Seven stocks (Alphabet, Amazon.com, Apple, Meta Platforms, Microsoft, Nvidia, and Tesla).

A seasoned leadership team, a well-structured succession plan, and J.P. Morgan’s robust research platform support reaffirming the People Pillar rating of Above Average. Long tenured manager Susan Bao, who has led this strategy since its 2005 inception (and its offshore counterpart since 2007) alongside Tom Luddy, remains the anchor of the franchise. Bao joined J.P. Morgan in 1997 and began managing money in 2001 on the firm’s long-only US equity strategy, initially running a 50% sleeve with Luddy. Bao’s deep familiarity with the firm’s investment process and her extensive long-only and long-short experience provide valuable continuity.

After Luddy’s retirement in late 2017, Steven Lee joined Bao as comanager in 2018. Lee, who will retire in the third quarter of 2026, brings nearly three decades of experience. His long-short expertise, strengthened through his management of JPMorgan Research Market Neutral since 2014, has been valuable to this strategy’s 30/30 extension. His upcoming departure is a loss, but the extended transition window and his continued presence until retirement help mitigate disruption.

To prepare for this change, Andrew Stern and Tim Woodhouse were appointed comanagers on June 30, 2025. Stern, who joined J.P. Morgan in 2008, brings experience as a portfolio manager on the U.S. GARP Equity, Sustainable Leaders, and Fundamental Data Science strategies, following earlier analyst work in consumer and industrials. Woodhouse, also with the firm since 2008, has managed global equity portfolios since 2014 with a focus on core and sustainable strategies, supported by prior technology, media, and telecom analyst experience. In July 2025, Bao, Stern, and Woodhouse were added to the Research Market Neutral strategy, reinforcing continuity in the long-short framework after Lee’s retirement.

The strategy continues to benefit from J.P. Morgan’s substantial research resources, including around 20 career analysts averaging more than 20 years of industry experience and 13 years of firm tenure, supported by seasoned research associates. This depth underpins idea generation across both long and short books.

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.

The strategy has performed well under Susan Bao’s watch. Both the US- and Luxembourg-domiciled funds rank comfortably in the top-quintile of their respective categories over the trailing three, five, 10, and 15 years ended December 2025, despite near-term weakness. With the departure of Tom Luddy and the arrival of long-short specialist Steven Lee, the strategy’s record since 2018 is more relevant. Encouragingly, thanks to effective stock selection, the vehicles have been able to generate a positive alpha versus the Morningstar US Large-Mid Growth NR USD category index over various time horizons. Stock-picking was exceptionally strong during the coronavirus pandemic period, both in the long leg of the portfolio and in the 30/30 extension. In 2020, the security selection within semiconductors and hardware proved to be very effective, but also within financials, the team’s stock picks added value. At the stock level, the overweight positions in PayPal, Amazon.com, and Morgan Stanley boosted returns. In 2021, positions in semiconductors, banks, and energy drove performance. Diamondback Energy and Alphabet were key contributors in that year. The macro-influenced year of 2022 proved to be a more challenging period for the strategy, but positive sector allocation largely compensated for weaker stock-selection results. The managers experienced a blowout year in 2023. Stock selection in both the long leg and the 30/30 extension meaningfully contributed, including Meta Platforms, Chipotle Mexican Grill, and Eaton. Performance remained strong in 2024, with both funds outpacing the category index and peers. Stock selection added value on both the long and short side. The strategy lagged in 2025, primarily because of weak stock selection within the software and services (Salesforce), health services (UnitedHealth), and retail sectors.

JPMorgan US Large Cap Core Plus I's Prospectus Adjusted Expense Ratio is 0.7% per year. It places it in the middle quintile of the Morningstar US Fund Large Blend Category, where the median fee is 0.67% per year. This cost positioning translates into a Medalist Rating Price Score of -0.18, 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.