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JPMorgan Small Cap Value R2 JSVZX

Medalist Rating as of | See JPMorgan Investment Hub
  • NAV / 1-Day Return 23.55  /  +0.99 %
  • Total Assets 1.3 Bil
  • Adj. Expense Ratio
    1.490%
  • Expense Ratio 1.490%
  • Distribution Fee Level Above Average
  • Share Class Type Retirement, Medium
  • Category Small Value
  • Investment Style Small Value
  • Min. Initial Investment
  • Status Open
  • TTM Yield 1.07%
  • Turnover 79%

USD | NAV as of Apr 20, 2024 | 1-Day Return as of Apr 20, 2024, 12:09 AM GMT+0

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Morningstar’s Analysis JSVZX

Medalist rating as of .

JPMorgan Small Cap Value R2’s management team is rated Average, but a solid investment process still helps this strategy retain its 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.

JPMorgan Small Cap Value R2’s management team is rated Average, but a solid investment process still helps this strategy retain its 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 investment process inspires confidence and earns a High Process Pillar rating. Independent of the rating, analysis of the strategy's portfolio shows it has maintained an overweight in volatility exposure and an underweight in quality exposure compared with category peers. High volatility exposure is attributed to companies with a higher standard deviation of returns. And a low quality exposure is rooted in stocks with higher financial leverage and lower profitability. The strategy’s management team earns an Average People Pillar rating. The strategy's parent organization earns the firm an Above Average Parent Pillar rating. People Pillar and Parent Pillar ratings for this strategy are indirectly assigned by a Morningstar analyst rather than algorithmically derived. Please see the notes following each pillar section for more details. The details of assigning methods can be found in each pillar section.

Rated on Published on

Morningstar's evaluation of this fund's process seeks to determine how repeatable, consistent, and reliable it is, and whether management maintains a competitive advantage.

null Morningstar Manager Research

Morningstar Manager Research

Process

High

JPMorgan Small Cap Value Fund earns a High Process Pillar rating.

The primary 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 superior risk-adjusted performance, as shown by its average 10-year Morningstar Rating of 3.3 stars, also contributes to the process. Excellent risk-adjusted performance also supports the rating, as shown by the fund's five-year alpha calculated relative to the category index, which suggests that the managers have shown skill in their allocation of risk.

This strategy is similar to its Small Value category peers in terms of market-cap and style exposure. Analyzing additional factors, the managers have continually exhibited a willingness to take risks over the last few years, demonstrated by the portfolio's high volatility exposure. Such exposure tends to pay off when markets are hot and to be costly when they are not. In recent months, the strategy was more exposed to the Volatility factor compared with its Morningstar Category peers as well. This strategy has also tilted toward low-quality stocks, companies with higher financial leverage and lower profitability over peers in recent years. Such positions do not tend to provide much ballast for a portfolio. Similarly, in recent months, the strategy also had less exposure to the Quality factor than peers. In addition, this strategy has exhibited a tilt toward liquid assets, evidenced by consistently holding companies with relatively higher trading volumes. Such stocks may have less potential upside than illiquid holdings, but they are easier to trade during market downturns. In this month, the strategy also had more exposure to the Liquidity 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 real estate and healthcare relative to the category average by 5.6 and 3.7 percentage points, respectively. The sectors with low exposure compared to category peers are industrials and consumer cyclical, underweight the average by 5.2 and 4.8 percentage points of assets, respectively. The portfolio is positioned across 371 holdings and its assets are more dispersed than the typical peer in the category. In the most recent disclosure, 9.1% of the portfolio's assets were concentrated in the top 10 fund holdings, as opposed to the category average's 28.1%. And finally, in terms of portfolio turnover, looking at year-over-year movements, 79% of the fund's holdings have turned over, whether through increasing, decreasing, or changing a position.

Rated on Published on

JPMorgan Small Cap Value Fund earns an Average People Pillar rating.

null Morningstar Manager Research

Morningstar Manager Research

People

Average

The team is backed by Phillip D. Hart, the longest-tenured manager on the strategy, who provides 13 years of listed portfolio management experience. The average Morningstar Rating of the strategies they currently manage is 2.4 stars, reflecting below-average risk-adjusted performance relative to category peers. The team boasts an experienced corps of listed portfolio managers, with three others supporting Phillip D. Hart. Together, they average 10 years of listed portfolio management experience. As a team, they manage seven investment vehicles together, with a Bronze asset-weighted average Morningstar Medalist Rating, indicating the potential to deliver positive alpha in aggregate. The highest personal investment in the fund by any of its managers is between$ 100,000 and$ 500,000. That's on the low side--it would need to be more than$ 1 million for us to see the investment as sufficient to promote the strong alignment of their interests with the strategy's investors.

Note: The People Pillar rating is indirectly assigned by an analyst. The longest-tenured manager of the fund also manages a different product rated by an analyst. Their analyst-assigned People Pillar rating is combined here with the People scores (algorithmic or analyst-assigned) for the fund’s other 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 had varying fortunes.

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Morningstar Manager Research

Performance

It has been strong over the short term but weak over the long term. Over the past five years, the fund beat the category index, the Russell 2000 Value Index, by 45 basis points, and lagged the category's average return by 1.3 percentage points. More importantly, on a 10-year basis, this share class fell behind the index by an annualized 76 basis points.

The share class failed to beat the index with a lower Sharpe ratio, a measure of risk-adjusted returns, over the trailing 10-year period. However, this strategy stayed in line with the benchmark's standard deviation.

Published on

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

null Morningstar Manager Research

Morningstar Manager Research

Price

This share class levies a fee that places it in its Morningstar Category's highest quintile. Even with this fee, the fund’s People, Process, and Parent Pillars suggest this share class has the potential to deliver positive alpha relative to its category benchmark, garnering a Morningstar Medalist Rating of Bronze.

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Portfolio Holdings JSVZX

  • Current Portfolio Date
  • Equity Holdings
  • Bond Holdings
  • Other Holdings
  • % Assets in Top 10 Holdings 9.0
Top 10 Holdings
% Portfolio Weight
Market Value USD
Sector

Encore Wire Corp

1.26 17.2 Mil
Industrials

JPMorgan Prime Money Market Inst

1.17 16.1 Mil
Cash and Equivalents

SM Energy Co

0.91 12.5 Mil
Energy

Griffon Corp

0.90 12.4 Mil
Industrials

First BanCorp

0.90 12.3 Mil
Financial Services

Commercial Metals Co

0.89 12.2 Mil
Basic Materials

Essent Group Ltd

0.88 12.1 Mil
Financial Services

OFG Bancorp

0.86 11.8 Mil
Financial Services

Light & Wonder Inc Ordinary Shares

0.81 11.1 Mil
Consumer Cyclical

Mueller Industries Inc

0.80 11.0 Mil
Industrials