Morningstar's evaluation of this fund's process aims to determine how repeatable, consistent, and reliable it is, and whether management maintains competitive advantage. JPMorgan Small Cap Growth Fund earns an Above Average Process Pillar rating.
This strategy does not differentiate itself from its Small Growth category peers in terms of size and style exposure. Analyzing additional factors, this strategy tilts toward low-quality stocks or the shares of companies with more financial leverage and lower profitability. These are not defensive holdings. The strategy is also historically less exposed to the factor compared with Morningstar Category peers. This strategy has also exhibited a tilt toward high-volatility stocks, meaning companies that have a higher historical standard deviation of returns. This factor's exposure tends to pay off most prominently when markets are hot. And compared with category peers, the strategy historically has had more exposure. Additionally, this strategy has exhibited a tilt toward liquid assets, evidenced by consistently holding companies with relatively higher trading volume. This lends the managers flexibility during bear markets to sell without adversely affecting prices. And the portfolio has more exposure than its Morningstar Category 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 healthcare and consumer cyclical relative to the average peer in its category by 4.5 and 3.1 percentage points in terms of assets, respectively. The sectors with low exposure compared to their category peers are financial services and basic materials, with financial services underweighting the average portfolio by 5.3 percentage points of assets and basic materials similar to the average. The portfolio is positioned across 126 holdings and is diversified among those holdings. In its most recent portfolio, 17.6% of the fund’s assets were concentrated in the top 10 fund holdings, compared to the category average's 25.6%. And finally, 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.