Skip to Content

JPMorgan Small Cap Equity R5 JSERX

Analyst rating as of
NAV / 1-Day Return
61.21  /  1.29 %
Total Assets
7.2 Bil
Adj. Expense Ratio
Expense Ratio
Fee Level
Below Average
Longest Manager Tenure
14.23 years
Small Blend
Investment Style
Small Blend
Min. Initial Investment
TTM Yield

Morningstar’s Analysis

Analyst rating as of .


Our analysts assign Silver ratings to strategies that they have high conviction will outperform a relevant index, or most peers, over a market cycle.


Senior Analyst


| |

JPMorgan Small Cap Equity’s laser focus on steady, well-positioned businesses sets it apart, earning cheaper share classes a Morningstar Analyst Rating of Silver, while more expensive ones earn Bronze.

This strategy is all about finding great businesses priced as merely good ones. Managers Don San Jose and Daniel Percella scour the small-cap universe for best-in-class companies with consistently high levels of profitability that are led by management teams proved to be efficient capital allocators. They focus on companies operating in narrow niches, looking for firms able to leverage their competitive positioning to protect and grow their returns on capital at rates higher than the market foresees. These traits, along with a preference for earnings and free-cash-flow over top-line revenue growth, lead them to steadier business models. Some of the managers’ best ideas over the years were pool products distributor Pool Corp POOL and medical supplier West Pharmaceutical WST.

A focus on durable companies makes the strategy a good bet when markets nosedive but can also make it lag in sharp market upturns such as in the first five months of 2021. The Institutional share class’ 12.6% return over that period fell in the small-blend Morningstar Category’s bottom quartile. Its lack of exposure to stocks with greater economic sensitivity within the materials, industrials, and consumer cyclical sectors hurt. Still, over the long haul, the strategy has captured more than enough upside over market cycles to generate superior returns.

The managers purchased larger companies over the years as the strategy’s asset base grew (it’s now roughly $10 billion) but have been keen to sell stocks once they become too big to prevent the fund from drifting into mid-cap territory. They recently sold some of their longest-held and best-performing stocks because of their size. Capital from those names was recycled into new holdings, which ranged from roughly $1 billion to $8 billion in market cap, a good sign that they can still transact in small caps despite a large asset base.