Morningstar's evaluation of this fund's process aims to determine whether it has been applied consistently over time, as demonstrated by the portfolio's composition, its suitability for different types of investors, and expectations for performance in diverse market conditions, assuming the process is adhered to. JPMorgan Large Cap Value Fund earns an Above Average Process Pillar rating.
This strategy tends to pick smaller market-cap firms compared with the average fund in its peer group, the Large Value Morningstar Category. But in terms of investment style, the strategy is on par with peers. Looking at additional factor exposure, the managers currently do not favor or avoid liquidity risk; the portfolio is about as liquid as other equity funds. 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. This strategy also has a portfolio favoring low-quality stocks. This means the fund avoids holding companies that are consistently profitable, growing, and have solid balance sheets. Lacking this ballast, the fund's prospects will rest on its ability to surpass peers during economic booms. 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 healthcare and energy relative to the average peer in its category by 3.4 and 2.6 percentage points in terms of assets, respectively. The sectors with low exposure compared to their category peers are technology and consumer cyclical, with technology underweighting the average portfolio by 7.2 percentage points of assets and consumer cyclical similar to the average. The portfolio is composed of 87 holdings and is about as top-heavy as the category average, with 31.3% of assets in the top 10 holdings. And finally, 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.