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JPMorgan Small Cap Growth R2 JSGZX

Medalist Rating as of | See JPMorgan Investment Hub
  • NAV / 1-Day Return 15.62  /  +0.45 %
  • Total Assets 3.6 Bil
  • Adj. Expense Ratio
    1.490%
  • Expense Ratio 1.490%
  • Distribution Fee Level Above Average
  • Share Class Type Retirement, Medium
  • Category Small Growth
  • Investment Style Small Growth
  • Min. Initial Investment
  • Status Limited
  • TTM Yield
  • Turnover 33%

USD | NAV as of Jun 21, 2024 | 1-Day Return as of Jun 21, 2024, 10:17 PM GMT+0

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Morningstar’s Analysis JSGZX

Medalist rating as of .

A strong management team and sound investment process underpin JPMorgan Small Cap Growth R2's Morningstar Medalist Rating of Bronze.

Our research team assigns Bronze ratings to strategies they’re confident will outperform a relevant index, or most peers, over a market cycle on a risk-adjusted basis.

A strong management team and sound investment process underpin JPMorgan Small Cap Growth R2's Morningstar Medalist Rating of Bronze.

null Morningstar Manager Research

Morningstar Manager Research

Summary

Fees are a weakness here. The strategy's lofty fees are a high hurdle to clear, as it is priced within the highest quintile among peers.

The strategy's managers invest alongside shareholders, which helps it earn an Above Average People Pillar rating. The strategy's investment approach stands out and earns an Above Average Process Pillar rating. Independent of the rating, analysis of the strategy's portfolio shows it has maintained an overweight liquidity exposure and has a considerable underweight in quality exposure compared with category peers. High liquidity exposure is attributed to stocks with a high trading volume, lending managers more flexibility. And a low quality exposure is rooted in stocks with higher financial leverage and lower profitability. The strategy's parent organization earns the firm an Above Average Parent Pillar rating, and this rating is inherited from vehicles belonging to the same branding entity and is indirectly assigned by an analyst.

Rated on Published on

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.

null Morningstar Manager Research

Morningstar Manager Research

Process

Above Average

JPMorgan Small Cap Growth Fund earns an Above Average Process Pillar rating.

The largest contributor to the rating is the parent firm's five-year risk-adjusted success ratio of 57%. The measure indicates the percentage of a firm's funds that survived and outperformed their respective category's median Morningstar Risk-Adjusted Return for the period. The parent firm's impressive risk-adjusted performance, as shown by its average 10-year Morningstar Rating of 3.3 stars, also influences the rating. Lastly, the process is limited by being an actively managed strategy. Historical data, such as Morningstar's Active/Passive Barometer, finds that actively managed funds have generally underperformed their passive counterparts, especially over longer time horizons.

This strategy is similar to its Small Growth category peers in terms of market-cap and style exposure. Examining additional factor exposure, this strategy has held more highly liquid stocks compared to Morningstar Category Peers in the past few years. Such stocks may have less potential upside than illiquid holdings, but they are easier to trade during market downturns. In recent months, the strategy was more exposed to the Liquidity factor compared with its Morningstar Category peers as well. The strategy has also had a defensive tilt, demonstrated by lower exposure to the quality factor than peers in recent years. This means the fund has avoided holding companies that are consistently profitable, growing, and have solid balance sheets. Lacking this ballast, the fund's prospects could rest on its ability to beat peers during economic booms. Similarly, in recent months, the strategy also had less exposure to the Quality factor than peers. Additionally, the managers have consistently taken on more risk, demonstrated by higher volatility exposure than peers. Such exposure tends to pay off when markets are hot and to be costly when they are not. In this month, the strategy also had more exposure to the Volatility factor over its 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 technology and consumer cyclical relative to the category average by 4.2 and 3.4 percentage points, respectively. The sectors with low exposure compared to category peers are financial services and industrials, with financial services underweighting the average portfolio by 5.0 percentage points of assets and industrials similar to the average. The portfolio is composed of 134 holdings and is less top-heavy than peers. Specifically, 18.1% of the strategy's assets are concentrated within the top 10 fund holdings, compared to the typical peer's 25.9%. And in closing, in terms of portfolio turnover, this fund trades less regularly than the typical peer in its category, which may result in a lower cost to investors.

Rated on Published on

JPMorgan Small Cap Growth Fund earns an Above Average People Pillar rating.

null Morningstar Manager Research

Morningstar Manager Research

People

Above Average

The team is backed by Eytan M. Shapiro, the longest-tenured manager on the strategy, who brings over 25 years of listed portfolio management experience. The team boasts an experienced corps of listed portfolio managers, with three others supporting Eytan M. Shapiro. Together, they average 19 years of listed portfolio management experience. As a team, they manage two investment vehicles together, with a Silver asset-weighted algorithmically-assigned average Morningstar Medalist Rating, demonstrating their potential to deliver positive alpha in aggregate. At least one member of the team has invested$ 1 million or more of their own capital in the fund, which helps align their interests with the strategy's investors.

Note: The People Pillar rating is indirectly assigned by an analyst. At least one of the managers on this fund manages a different product rated by an analyst. The analyst-assigned People Pillar rating(s) for these managers are combined with algorithmic scores for any non-covered managers on a tenure-weighted basis.

Rated on Published on

A well-resourced, thoughtful, and disciplined steward of client assets, JPMorgan Asset Management maintains an Above Average Parent rating.

Associate Director Emory Zink

Emory Zink

Associate Director

Parent

Above Average

As of 2022, this investment stalwart manages more than USD 2.5 trillion in AUM. Composed of various global cohorts and diverse asset classes, the firm has more tightly integrated its capabilities in recent years, notably through the development of proprietary analytical and risk systems. Investment teams are robustly staffed and helmed by seasoned contributors. The firm’s strategies tend to produce reliable portfolios, and several flagship offerings are Morningstar Medalists. Manager incentives align with fundholders'; compensation reflects longer-term performance factors, and portfolio managers invest in the firm’s strategies as part of their compensation plans.

The firm’s funds tend to be well-priced, but they aren’t as competitive as many highly regarded peers of similar scale. Recent product launches include thematic and single-country strategies, both of which carry the potential for volatile performance and flows, along with misuse by investors. The firm remains intrepid when it comes to developing an environmental, social, and governance-focused framework and continues to move into other areas such as direct indexing through its 55iP acquisition and China through its joint venture, but these complicated initiatives take time to assess any real and lasting effect.

Rated on Published on

This strategy’s Retirement share class has endured varying fortunes.

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Morningstar Manager Research

Performance

It has been subpar over the short term but strong over the long term. Over the past five years, the fund underperformed the category index, the Russell 2000 Growth Index, by 63 basis points, and underperformed the category average by 1.7 percentage points. More importantly, on a 10-year basis, this share class outperformed the index by an annualized 1.6 percentage points.

The share class outstripped the index with a higher Sharpe ratio, a measure of risk-adjusted return, over the trailing 10-year period. However, these returns were accompanied by additional risk, with a standard deviation of 22.4% compared to the benchmark's 20.9%.

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It is imperative to evaluate fees, which compound over time and diminish returns.

null Morningstar Manager Research

Morningstar Manager Research

Price

This share class imposes a fee that ranks in its Morningstar Category's highest quintile. Even with this fee, the fund’s People, Process, and Parent Pillars indicate this share class can produce positive alpha relative to its category benchmark, resulting in a Morningstar Medalist Rating of Bronze.

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Portfolio Holdings JSGZX

  • Current Portfolio Date
  • Equity Holdings
  • Bond Holdings
  • Other Holdings
  • % Assets in Top 10 Holdings 17.6
Top 10 Holdings
% Portfolio Weight
Market Value USD
Sector

Super Micro Computer Inc

3.44 124.2 Mil
Technology

AAON Inc

2.10 75.6 Mil
Industrials

Applied Industrial Technologies Inc

1.90 68.4 Mil
Industrials

Simpson Manufacturing Co Inc

1.58 57.0 Mil
Basic Materials

e.l.f. Beauty Inc

1.51 54.6 Mil
Consumer Defensive

Allegro Microsystems Inc Ordinary Shares

1.51 54.4 Mil
Technology

Casella Waste Systems Inc Class A

1.45 52.2 Mil
Industrials

MSA Safety Inc

1.42 51.4 Mil
Industrials

Comfort Systems USA Inc

1.40 50.5 Mil
Industrials

Natera Inc

1.33 48.0 Mil
Healthcare