JPMorgan U.S. Small Company Fund Class R2 JSCZX

JPMorgan US Small Company R2 holds a quantitatively derived Neutral Morningstar Medalist Rating. The rating suggests the model does not express a clear expectation of outperformance or underperformance relative to peers over a full market cycle.

People: Average

The People Pillar assessment is based on quantitative measures of manager experience, track record, and alignment. Over periods of up to 10 years, the successful manager experience metric, calculated across the actively managed strategies the manager has run over that period, ranks slightly below peers. Separately, we measure risk-adjusted excess return by analyzing managers' information ratios over the one-, three-, and five-year periods. These rank below peers, below peers, and slightly above peers, respectively. Reported manager investment in the strategy is over USD 500,000, something our analysis indicates is correlated with better long-term performance.

Process: Average

The Process rating is driven by the fund's gross-of-fee information ratio, a measure of risk-adjusted excess return. Over one, three, and five years, it ranks above peers, slightly below peers, and slightly below peers, respectively. The parent firm's risk-adjusted success ratio, which measures the share of its equity funds that outperform peers, ranks above peer firms over 10 years.

Performance (in US Dollar)

Over the past 12 months, JPMorgan US Small Company R2 share class returned 41.3%, outperforming both its category index, the Morningstar US Small Cap Mkt TR USD Index (27.6%), and its Morningstar category peers (31.2%). Across 10 years, the fund returned 10.1% per year, mirroring the index (10.2% per year) while outperforming its Morningstar Category average (9.9% per year).

Price

JPMorgan US Small Company R2's Prospectus Adjusted Expense Ratio is 1.48% per year. It places it in the most expensive quintile of the Morningstar US Fund Small Blend Category, where the median fee is 0.93% per year. This cost positioning translates into a Medalist Rating Price Score of -1.82, 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.

JPMorgan US Small Company R2 is assigned an Average Process rating. Our evaluation of a strategies' Process Pillar focuses on the effectiveness of its investment approach. A well-structured process should be clearly defined and consistently applied. This assessment incorporates quantitative measures of risk-adjusted returns, success ratio, and portfolio stability to gauge the fund's ability to execute its strategy effectively over time.

Fund Information Ratio

We assess the strategy's ability to generate risk-adjusted excess returns relative to its Morningstar Category Index using the gross-of-fee information ratio. This is evaluated over one-, three-, and five-year periods where available. Here, the category-relative information ratio ranks above peers over one year, slightly below peers over three years, and slightly below peers over five years.

Brand/Asset Class Risk-Adjusted Success Ratio

The risk-adjusted success ratio gauges a firm's ability to deliver competitive results within each major asset class. It reflects the share of the firm's funds that both survived and outperformed the peer average over trailing three-, five-, and 10-year periods, where available. Based on the average performance of the group's equity fund offerings, the success ratio ranks slightly above peers, relative to the other firms in the strategy's asset class over three years, slightly below peers over five years, and above peers over 10 years.

Portfolio Characteristics

Assessment of the fund's portfolio characteristics helps determine whether a fund is consistent in its investment approach. The standard deviation of size and style scores over the past three years is used to evaluate how stable the portfolio remains relative to its Morningstar category peers. Where the size and style variability metric breaches the upper tolerance limit, a small deduction is applied to the Process rating, reflecting greater variability. No penalty is applied to the strategy.

JPMorgan US Small Company R2 earns an Average People rating. The People Pillar assessment evaluates the factors that shape the managers' ability to deliver consistent returns. This methodology combines quantitative inputs to judge the investment team’s strength, alignment, and stability.

Manager Experience

We assess each manager's historical ability to outperform their Morningstar Category Indices by calculating the tenure-weighted net number of successful excess return months over the past ten years. This figure reflects the number of months in which each manager achieved positive gross-of-fee excess returns, minus those with negative excess returns, across actively managed funds. To calculate this, we look across all the actively managed strategies the manager has run within the last 10 years. The result is then weighted by the managers' tenure on the strategy. On this strategy, the successful manager experience metric ranks slightly below peers.

Manager Information Ratio

We evaluate manager's skill in generating risk-adjusted excess returns using the gross-of-fee information ratio, defined as the average gross excess return divided by the average tracking error across all strategies under their management. The metric is evaluated across the one-, three-, and five-year periods, where available, with greater emphasis placed on longer-term performance to provide a comprehensive view of consistency over time. Here, the information ratio ranks below peers over one year, below peers over three years, and slightly above peers over five years.

Manager Investment

We consider whether fund managers have personally invested at least USD 500,000 in the fund, as our analysis indicates that higher coinvestment levels are correlated with better long-term performance. A small upward adjustment to the score behind the People rating is given if this investment hurdle is met. That is the case here: The managers on this strategy invest over USD 500,000 in the fund.

Manager Retention

We assess manager stability by examining both average annual retention rates and average manager tenure at the branding company level over the past five years. A small deduction to the People Rating is applied if either metric falls within the bottom decile globally. This adjustment reflects the increased risk of key talent turnover, which can impact the long-term execution of the strategy. No negative adjustment is warranted.

Combining these factors creates a structured and data-driven framework to assess portfolio manager quality, balancing historical performance with forward-looking considerations such as alignment and team stability.

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.

Note: This share class' Parent Pillar rating is analyst-driven, as its Branding Name, JPMorgan (Branding Name ID: BN0000095S), is covered by Morningstar Manager Research.

Performance is evaluated in US Dollar, measured to the end of May 2026.

Short-Term Performance

Over the past 12 months, JPMorgan US Small Company R2 share class returned 41.3%, outperforming its category index, the Morningstar US Small Cap Mkt TR USD Index (27.6%), and its Morningstar category peers (31.2%). Over the three-year period, it returned 18.1% per year, outperforming both the index (17.5% per year) and its Morningstar category peers (16.9% per year).

Long-Term Performance

Over five years, the fund returned 6.8% per year, ahead of the index (6.1% per year) and ahead of peers (6.5% per year). Across the 10-year period, the fund returned 10.1% per year, mirroring the index (10.2% per year) but ahead of its Morningstar Category average (9.9% per year).

JPMorgan US Small Company R2's Prospectus Adjusted Expense Ratio is 1.48% per year. It places it in the most expensive quintile of the Morningstar US Fund Small Blend Category, where the median fee is 0.93% per year. This cost positioning translates into a Medalist Rating Price Score of -1.82, 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.