JPMorgan Equity Income Fund Class A OIEIX

JPMorgan Equity Income (including the JPMorgan Equity Income mutual fund, the JPM US Equity Income separate account, and various UK-domiciled subaccounts) features a prudent, proven approach and a seasoned team that knows it well. Morningstar has enhanced the way we assess alpha opportunity for funds, which is a key component in our ratings calculation. More of this strategy's Medalist ratings than usual may therefore change with this update, even in the absence of changes to pillar ratings or fund costs.

This strategy changed leaders in fall 2024 but remains in good hands. Longtime lead manager Clare Hart retired on Sept. 5, 2024, after a 20-year tenure using her highly successful, sensible approach. Andrew Brandon and David Silberman were first her teammates and then her chosen successors. They’ve been portfolio managers here since 2019, and Brandon has been on this team since 2012. Both have decades of experience, mostly at J.P. Morgan Asset Management.

The comanagers have solid backing, starting with three dedicated analysts. Tony Lee and Lerone Vincent joined this value team in 2018 and 2022, respectively. In January 2024, the managers, including Hart, recruited Laura Huang from the firm’s central analyst team to cover financials here—Hart’s area of expertise. And this core team of five works with the central pool of 20 seasoned, high-caliber analysts.

The approach here remains first-rate. Its simple but potent philosophy contends that a well-diversified collection of robust but underappreciated businesses will tend to outperform long term. In its efficient large-value area, the team usually knows ownership candidates well but vets downtrodden companies’ earnings quality, historical allocation, and valuation to ensure a good fit here. A decent dividend is a requirement to enter the portfolio as proof of financial discipline and continuity. This process is neither dazzling nor intricate: Sound judgment and continual discipline are what make the strategy effective.

The strategy has underperformed the typical peer and Russell 1000 Value benchmark on the new skippers’ watch. The recent shortfall isn’t a significant concern; over its nearly 200 rolling five-year periods, while using its current process, it has topped the bogy more than 80% of the time. It also has a sterling record of relatively buoyant behavior in bear markets.

Those seeking a deliberate, sensible value approach have a very good option here.

The well-established, deliberate approach earns a High Process Pillar rating. In the dense and familiar large-value world, screening for new ideas is usually unnecessary for these experienced managers. They watch for solid companies with consistent earnings, high returns on invested capital, and conservative financials to go out of favor. New purchases must have solid dividend yields that are modest portions of profits to ensure the funding of future business growth. Finally, management teams must have a track record of solid capital discipline.

After meeting these financial strength thresholds, the portfolio managers focus on firms that are trading at a discount to their intrinsic values. The team employs different metrics for various industries, but most begin with free cash flow yield as well as price- and enterprise-value multiples.

The resulting portfolio usually holds 85-110 stocks. The skippers limit new purchases to 5% of assets but will allow positions to appreciate beyond that level. The portfolio maintains exposure to all the sectors in the Russell 1000 Value Index, but weightings can vary by up to 10 percentage points from that bogy’s. Large-value managers are generally a patient group, but this crew is more so. Since Andy Brandon and David Silberman became managers, the strategy’s annual portfolio turnover has averaged just 17%, lower than nearly 90.0% of active large-value category peers.

On a sector basis, the managers tend to stick close to the benchmark, but they’ll stand out where they see opportunity. In the June 2025 portfolio, five of the 11 sectors of the portfolio’s allocation essentially matched those of the Russell 1000 Value benchmark. The largest underweighting, by just more than 5 percentage points, was in communications. Almost half of the benchmark’s communication exposure was in recently added Alphabet and Meta Platforms, whose nominal dividends don’t meet this strategy’s standard, thus driving an organic underweighting. The portfolio included Comcast and Verizon, whose largely ignored businesses paid 4% and 6% dividends over the previous 12 months, respectively.

The managers’ highest overweighting was in financials, the most heavily weighted sector in the large-value universe. The index had 22.7% in financials; this strategy devoted slightly more, 27.3%, to the area. Indeed, in June 2025, its top three holdings were Wells Fargo, Bank of America, and Charles Schwab. The managers continue to think that banks are a sweet spot, given solid capital returns, the prospects of a friendlier regulatory regime, and historically significant valuation discounts. Alongside those old-school franchises, the managers devoted 2% of assets to thriving alternative asset managers Ares and Blackstone—recent additions to the portfolio, courtesy of new dedicated analyst Laura Huang.

The managing pair and their analysts earn an Above Average People Pillar rating. Comanagers Andy Brandon and David Silberman have only run the strategy as a duo since September 2024, but that understates their experience with the portfolio and each other. They became named managers here in November 2019, working with longtime lead manager Clare Hart. Brandon started on this team in 2012 as an analyst. Silberman, a 36-year veteran with the firm, headed the firm’s equity investment director and corporate governance teams after managing private clients’ portfolios. The pair has complementary expertise: Brandon oversees energy, materials, and industrial holdings, while Silberman handles the utilities, healthcare, telecom, and technology areas. While the managers defer to each other’s expertise in their core areas, every material buy or sell demands the approval of both.

The managers have a solid supporting crew, starting with three dedicated analysts. Tony Lee joined the value team in 2018; he covers healthcare, insurance, and REITs. Lerone Vincent joined this team in 2022, covering technology and basic materials. In January 2024, Laura Huang joined and took over the financials that the retired manager Hart had long covered. All three analysts came from the firm’s central analyst group. And this five-person team also has access to the 20 central analysts, who average 23 years of industry experience.

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 total returns have been subpar, but it’s not a cause for concern.

In the first year that portfolio managers Andy Brandon and David Silberman ran the strategy as a duo, it lagged the typical large-value Morningstar Category peer and the Russell 1000 Value Index. That’s not due to changes they made: From June 2024, when former manager Clare Hart was in place, to June 2025, about 90% of the assets were invested the same way. They still use her approach, which drove a 9.4% annualized gain for the institutional shares from August 2004 through August 2024, topping the 8.5% return for the Russell 1000 Value Index and 7.9% rise for the typical large-value category peer.

Overall returns don’t tell the whole story here, however, because holding up well in bear markets is a key trait. The Russell 1000 Value has had five bear market drops of 20% or more since 2004, wherein it has lost an annualized average of 33%. The typical large-value fund dropped 31.7% on average, but this fund’s institutional shares only slipped 27.5%.

This approach includes a dividend requirement and produces reasonable income, but below the Russell 1000 Value Index’s and most equity income peers. Over the decade ended August 2025, its institutional shares have averaged a 1.9% 12-month yield. There are extremely cheap passive options that have averaged roughly 3% over that period for those desiring a high equity income level.

JPMorgan Equity Income A's Prospectus Adjusted Expense Ratio is 0.95% per year. It places it in the second-most-expensive quintile of the Morningstar US Fund Large Value Category, where the median fee is 0.75% per year. This cost positioning translates into a Medalist Rating Price Score of -0.81, 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.