JPMorgan Large Cap Value Fund earns an Above Average Process Pillar rating.
The largest contributor to the rating is the fund's strong long-term risk-adjusted performance. This can be seen in its five-year alpha calculated relative to the category index, which suggests that the managers have shown skill in their allocation of risk. Management team experience, which averages 26 years at this fund, also strengthens the process. Lastly, the process is limited by the small size of its portfolio management team of one.
This strategy prefers smaller market-cap companies compared with the average fund in its peer group, the Large Value Morningstar Category. But in terms of style (value/growth) exposure, it is similar. Examining additional factor exposure, this fund has constantly tilted toward stocks with higher trading volumes than its Morningstar Category Peers over the past few years. This gives the managers more flexibility during bear markets to sell without adversely affecting prices. In recent months, the strategy was more exposed to the Liquidity factor compared with its Morningstar Category peers as well. This strategy has also exhibited a tilt toward high-volatility stocks over these years, meaning it has invested in companies that have a higher historical standard deviation of returns. Such stocks tend to rise faster and fall harder than the broad market. High-volatility exposure contributes to stronger performance during bull markets, but often at the cost of losing more during downturns. Compared with category peers, the strategy also had more exposure to the Volatility factor in the most recent month. In addition, this strategy has exhibited a tendency to hold fewer stocks with high dividend or buyback yields over peers in recent years. Returning capital to shareholders often is not the highest priority of such businesses. The shares of such companies can deliver strong returns if they fulfill their growth projections, but they also carry more risk. In this month, however, the strategy had more exposure to the Yield factor than 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 has allocations in its top two sectors, financial services and industrials, that are similar to the category. The sectors with low exposure compared to category peers are technology and consumer cyclical, with technology underweighting the average portfolio by 3.5 percentage points of assets and consumer cyclical similar to the average. The portfolio is composed of 92 holdings and is about as top-heavy as the category average, with 27.2% of assets in the top 10 holdings.