JPMorgan U.S. Equity Fund Class R3 JUEPX

Despite recent performance challenges, JPMorgan U.S. Equity (including two European vehicles, a Canadian exchange-traded fund, a separate account, and two collective investment trusts) benefits from a solid team and a disciplined, risk-conscious approach.

Recent results have been difficult for investors to overlook. From August 2025 through September 2026, the institutional share class gained 9.3% annualized, significantly trailing the prospectus S&P 500 benchmark's 18.9% return and ranking in the bottom quartile of the large-blend Morningstar Category. The disappointing stretch has also weighed on the strategy's longer-term record. Performance has been hindered by a unique market environment in which artificial intelligence-related themes drove outsize gains in key areas such as memory semiconductors, while growing uncertainty around the long-term prospects of other areas like software created additional headwinds. Even so, investors should consider further patience as the strategy retains several notable strengths.

The investment process remains a key advantage. Managers Scott Davis and David Maccarrone oversee a concentrated portfolio of roughly 50 to 70 stocks that is differentiated from the benchmark while maintaining diversified risk characteristics. Working closely with analysts, the managers look beyond traditional sector classifications to identify stocks with the most attractive risk/reward profiles. The portfolio is constructed to maintain benchmark-like exposure across underlying risk factors. This thoughtful design goes beyond the more common approach of aggregating analysts' highest-conviction ideas, and the managers devote significant attention to stocks they do not own, resulting in a portfolio that is both intentional and carefully balanced.

The strategy also remains in capable hands despite a recent leadership change. Comanager Shilpee Raina departed the firm on Sept. 1, 2026, and Maccarrone was named comanager to assume her responsibilities. Maccarrone has more than 30 years of experience and currently serves as the associate director of research. Davis, a named manager since 2014, provides important continuity. Together, they draw on the insights of the firm’s solid, core research team.

While recent performance has been disappointing, the strategy's experienced leadership and differentiated portfolio-construction process give it a strong foundation for improved results.

The quality of this strategy’s portfolio construction, research process, and collaborative culture earns a High Process rating.

This strategy’s robust, risk-aware approach stands out from the pack. Managers Scott Davis and David Maccarrone work closely with J.P. Morgan’s core analyst team, challenging assumptions and encouraging differentiated thinking. Analysts rank stocks within their coverage areas by conviction, but portfolio construction goes well beyond simply selecting the highest-ranked names. The managers rigorously debate investment ideas, comparing holdings against businesses with similar characteristics to ensure each position offers the most attractive risk/reward profile. Their goal is to build a portfolio with factor exposures broadly similar to the S&P 500 while allowing stock selection to drive excess returns.

This framework allows the highest-conviction ideas to contribute meaningfully while fostering a collaborative approach in which analysts are incentivized by the strategy’s overall performance. The result is a concentrated, roughly 50- to 70-stock portfolio whose results are driven by stock-specific factors rather than sector or style bets.

The managers use quantitative models to test portfolios, but much of their focus is on forward-looking risks that historical data may miss. This discipline extends beyond owned positions, as the team continually evaluates whether each holding remains superior to available alternatives. The result is a repeatable process that balances conviction with risk awareness.

This portfolio is differentiated from the S&P 500 prospectus benchmark while keeping a lid on risk. The US mutual fund held 69 stocks in August 2026 and kept about 45% of assets in the top 10 positions. However, managers Scott Davis and David Maccorrone’s desire to let stock selection drive results leads to only moderate sector bets relative to the index. For example, the strategy’s largest sector deviation relative to the S&P 500 as of August was its 3.9 percentage point overweighting to financials. They also consider factor exposure when building the portfolio. Yet, the portfolio has historically leaned a bit more toward growth stocks than its benchmark but still falls in the blend section of the Morningstar Style Box.

The managers typically invest a sliver of assets in non-US companies. They feel justified in owning foreign companies that derive a significant portion of their revenues from the US or those with no domestic alternative. For example, the strategy holds semiconductor equipment maker ASML and North American rail giant Canadian Pacific Kansas City. The vast majority of the strategy's assets, however, are invested in US-domiciled firms.

Given the strategy's over USD 90 billion asset base, it tends to avoid mid-caps with less liquidity and has typically held a lower amount of small-cap than the typical large-blend category peer.

Capable leadership and a deep analyst bench support an Above Average People rating.

Despite recent management changes, the strategy remains in qualified hands. On Sept. 1, 2026, comanager Shilpee Raina departed the strategy, and J.P. Morgan appointed David Maccarrone as comanager. Maccarrone brings more than 30 years of investment experience and has been a member of the team since 2010. He has expertise in energy, commodities, and basic materials, and serves as the associate director of US research. He joins longtime manager Scott Davis, who has been a named manager since 2014. Together, Davis and Maccarrone employ a collaborative approach, working closely with analysts and remaining actively involved in both company research and portfolio construction.

The managers leverage the ideas of J.P. Morgan's solid, core research team, which consists of around 20 analysts with extensive industry experience. While turnover within the analyst ranks is typical, the team has consistently replenished talent with capable replacements. Compensation is also well aligned with investors, with analysts having a portion of their pay tied to the strategy’s performance. Although recent results have been challenged, this experienced investment team has delivered strong long-term outcomes across this strategy and related large-cap offerings.

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.

Recent performance has weakened the strategy’s long-term record. From August 2025 through September 2026, the institutional share class gained 9.3% annualized, trailing the prospectus S&P 500 benchmark’s 18.9% and landing in the bottom quartile of large-blend category peers. A key headwind was the fund’s lack of exposure to several AI-related winners, including Micron. As a result, the strategy has lagged the index over the trailing five-, 10-, and 15-year periods.

Manager Scott Davis took full control of the strategy in February 2020. From March 2020 through September 2026, the strategy’s 16.1% annualized return lagged the index’s 17.3% but bested the category norm’s 14.7% gain.

Despite recent struggles, the strategy’s relative results have been relatively consistent under Davis. It outperformed the category average in 94% of rolling three-year periods through September 2026 and finished in the category’s top half in four of six calendar years.

The strategy fell into the category’s bottom half in 2025 as stock-specific issues weighed on returns. Key detractors included UnitedHealth Group and NXP Semiconductors, while the fund also missed gains from AI infrastructure leaders such as Micron and Sandisk. Although the team favored broader AI beneficiaries like Nvidia, those holdings lagged the strong performance of memory and hardware stocks. The managers added exposure to some of these names in early 2026, but not owning Intel and weak software picks, including Intuit, continued to weigh on performance through 2026’s first three quarters.

JPMorgan US Equity R3's Prospectus Adjusted Expense Ratio is 0.94% per year. It places it in the second-most-expensive quintile of the Morningstar US Fund Large Blend Category, where the median fee is 0.66% per year. This cost positioning translates into a Medalist Rating Price Score of -1.19, 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.