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 Large Cap Value Fund 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 style (value/growth) exposure, the strategy does not have much of a bias and resembles the category's typical portfolio. Analyzing additional factors, this strategy has about as much exposure to liquidity risk as others in the equity fund universe. Liquid stocks are easier to buy and sell without moving their prices and tend to act as ballast during market sell-offs. However, compared with Morningstar Category peers historically, the strategy is more exposed to the factor. The strategy also has relatively low exposure to the quality factor. This means the fund has avoided holding companies that are consistently profitable, growing, and have solid balance sheets. Although this orientation may be beneficial when the market is hot, it could contribute to a rocky portfolio during a downturn. And compared with category peers, the strategy historically has had less exposure. Additionally, the managers do not tilt in favor of high- or low-volatility stocks, the current portfolio is about as exposed as others in the equity fund universe. However, 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 is overweight in industrials by 2.5 percentage points in terms of assets compared with the average portfolio in the category, and its energy allocation is similar to the category. The sectors with low exposure compared to their category peers are technology and consumer cyclical, with technology underweighting the average portfolio by 7.1 percentage points of assets and consumer cyclical similar to the average. The portfolio is positioned across 93 holdings and is diversified among those holdings. In its most recent portfolio, 28.5% of the strategy's assets were concentrated in the top 10 fund holdings, compared to the category average's 31.0%. And in closing, in terms of portfolio turnover, this fund trades more frequently than its average peer, potentially racking up additional expenses for investors and creating a drag on performance.