Morningstar's style-agnostic investment process evaluation looks for strategies with a philosophy distinctive enough to generate standout results in the future. JPMorgan International Equity Fund earns an Above Average Process Pillar rating.
This strategy leans toward larger, more growth-oriented companies compared with its average peer in the Foreign Large Blend Morningstar Category. Examining additional factor exposure, this strategy favors high-quality stocks, which can improve downside risk protection because it entails holding consistently profitable, growing companies with solid balance sheets. The strategy is also historically more exposed compared with Morningstar Category peers. This strategy has not displayed a preference for or against yield. The most recent portfolio has about-average exposure compared with the typical equity fund. Investors usually seek higher-yielding stocks for income, but the shares also tend to be less volatile than non-dividend payers, unless they cut their payouts. But when compared with category peers, the strategy historically has had less exposure. Additionally, the managers do not tilt toward or away from liquidity risk, the current portfolio is about as liquid as others in the equity strategies universe. Although there is some evidence to indicate investors earn a premium for bearing this risk, in the case of a bear market, less-liquid assets are more difficult to sell without adversely affecting prices. 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 financial services by 3.3 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 consumer cyclical and real estate, with consumer cyclical underweighting the average portfolio by 3.4 percentage points of assets and real estate similar to the average. The portfolio is positioned across 76 holdings and is rather concentrated at the top, relatively. In particular, 28.7% of the fund’s assets are housed within the top 10 holdings, compared with the typical peer's 14.7%. And finally, in terms of portfolio turnover, this fund trades less frequently than the category’s average, potentially limiting costs to investors.