Morningstar's style-agnostic evaluation of this fund's process seeks to understand whether the strategy has a performance objective and sensible, clearly defined, repeatable execution. JPMorgan Small Cap Value Fund earns an Above Average Process Pillar rating.
This strategy tends to hold smaller, more undervalued companies than its average peer in the Small Value Morningstar Category. Analyzing additional factors, this strategy favors low-quality stocks. Such positions do not tend to provide much ballast for a portfolio. The strategy is also historically less exposed to the factor compared with Morningstar Category peers. This strategy also has an overweight bias to the volatility factor, meaning investing in stocks that have a higher historical standard deviation of returns. This contributes to a high-risk, high-reward approach. And compared with category peers, the strategy historically has had more exposure. Additionally, the managers do not exhibit a tilt toward momentum-oriented stocks, those currently on a winning streak. The latest portfolio has about average exposure compared with others in the equity fund universe. Momentum is based on the premise that stocks that have recently outperformed will continue to, and those that have underperformed will stay behind. 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 healthcare and real estate relative to the average peer in its category by 6.4 and 5.6 percentage points in terms of assets, respectively. The sectors with low exposure compared to their category peers are consumer cyclical and industrials, underweight the average by 6.3 and 5.7 percentage points of assets, respectively. The portfolio is positioned across 431 holdings and is diversified among those holdings. In its most recent portfolio, 9.5% of the portfolio's assets were concentrated in the top 10 fund holdings, as opposed to the category’s 29.2% average. And in closing, in terms of portfolio turnover, this portfolio turns over its holdings less quickly than peers, potentially leading to lower costs for investors and eliminating a drag on performance.