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Undiscovered Managers Behavioral Val L UBVLX

Medalist Rating as of | See JPMorgan Investment Hub
  • NAV / 1-Day Return 79.56  /  +0.26 %
  • Total Assets 8.5 Bil
  • Adj. Expense Ratio
    0.900%
  • Expense Ratio 0.900%
  • Distribution Fee Level Above Average
  • Share Class Type Retirement, Large
  • Category Small Value
  • Investment Style Small Value
  • Min. Initial Investment 3.0 Mil
  • Status Limited
  • TTM Yield 1.65%
  • Turnover 39%

USD | NAV as of Feb 22, 2024 | 1-Day Return as of Feb 22, 2024, 11:53 PM GMT+0

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Morningstar’s Analysis UBVLX

Medalist rating as of .

A strong management team and sound investment process underpin Undiscovered Managers Behavioral Val L's Morningstar Medalist Rating of Gold.

Our research team assigns Gold ratings to strategies that they have the most conviction will outperform a relevant index, or most peers, over a market cycle on a risk-adjusted basis.

A strong management team and sound investment process underpin Undiscovered Managers Behavioral Val L's Morningstar Medalist Rating of Gold.

null Morningstar Manager Research

Morningstar Manager Research

Summary

The portfolio maintains a sizable cost advantage over competitors, priced within the second-lowest fee quintile among peers.

The strategy's managers invest alongside shareholders, which helps it earn a High People Pillar rating. The strategy's investment approach stands out and earns an Above Average Process Pillar rating. Low quality exposure is attributed to stocks with higher financial leverage and lower profitability. And a high yield exposure is rooted in holding high dividend-paying or buyback stocks. The strategy's parent organization earns the firm an Above Average Parent Pillar rating, and this rating is inherited from vehicles belonging to the same branding entity and is indirectly assigned by an analyst.

Rated on Published on

Morningstar's evaluation of this fund's process seeks to understand management's investment philosophy, and whether it has been applied consistently over time and can add value across the market cycle.

null Morningstar Manager Research

Morningstar Manager Research

Process

Above Average

Undiscovered Managers Behavioral Val Fd earns an Above Average Process Pillar rating.

The primary 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. The parent firm's five-year risk-adjusted success ratio of 57% also strengthens the process. The measure indicates the percentage of a firm's funds that survived and beat their respective category's median Morningstar Risk-Adjusted Return for the period. Their respectable success ratio suggests that the firm does well for investors and that this fund may benefit from that. Lastly, the process is limited by being an actively managed strategy. Historical data, such as Morningstar's Active/Passive Barometer, finds that actively managed funds have generally underperformed their passive counterparts, especially over longer time horizons.

This strategy prefers more value-oriented stocks compared with the average fund in its peer group, the Small Value Morningstar Category. But in terms of size exposure, it is similar to the average. Analyzing additional factors, this strategy has consistently favored low-quality stocks compared with Morningstar Category peers over the past few years. Lacking this ballast, the fund's prospects will rest on its ability to surpass peers during economic booms. In the latest month, the strategy was also less exposed to the Quality factor compared with Morningstar Category peers. This strategy has also displayed a tendency to hold more companies with high dividend or buyback yields than peers over recent years. Stocks with high yields can be more stable, mature companies, but at times extreme market pressure or fundamental deterioration may prompt them to cut their dividends, which tends to hurt stock performance. Compared with category peers, the strategy also had more exposure to the Yield factor in the most recent month. Moreover, this strategy has been underweighting momentum stocks during these years. Momentum tends to be a powerful force in asset markets, as stocks that have done well recently usually continue to do so in the short term. As top performers change, this can sometimes be hard to capture without higher trading costs. In recent months, the strategy also had less Momentum factor exposure 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 is overweight in financial services and utilities relative to the category average by 16.1 and 3.7 percentage points, respectively. The sectors with low exposure compared to category peers are technology and industrials, underweight the average by 6.8 and 4.2 percentage points of assets, respectively. The portfolio is positioned across 99 holdings and is relatively top-heavy. Of the strategy's assets, 30.4% are concentrated within the top 10 holdings, as opposed to the typical peer's 25.7%. And finally, in terms of portfolio turnover, this fund trades less frequently than the category’s average, potentially limiting costs to investors.

Rated on Published on

Undiscovered Managers Behavioral Val Fd earns a High People Pillar rating.

null Morningstar Manager Research

Morningstar Manager Research

People

High

The primary contributor to the rating is its parent firm's five-year success ratio of 58%. The measure indicates the percentage of a firm's funds that survived and outperformed their respective category's median return for the period. The rating also gains because at least one manager has invested more than$ 1 million in the strategy. The portfolio managers' outperformance at the funds they run, as measured by their combined three-year manager excess returns, supports the rating as well.

David M. Potter, the longest-tenured manager on the strategy, provides strong guidance, bringing forward 19 years of listed portfolio management experience. The average Morningstar Rating of the strategies they currently manage is 3.8 stars, indicating that their risk-adjusted returns surpassed the category average. Despite having a small team, the two listed managers boast 12 years of listed portfolio management experience.

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A well-resourced, thoughtful, and disciplined steward of client assets, JPMorgan Asset Management maintains an Above Average Parent rating.

Associate Director Emory Zink

Emory Zink

Associate Director

Parent

Above Average

As of 2022, this investment stalwart manages more than USD 2.5 trillion in AUM. Composed of various global cohorts and diverse asset classes, the firm has more tightly integrated its capabilities in recent years, notably through the development of proprietary analytical and risk systems. Investment teams are robustly staffed and helmed by seasoned contributors. The firm’s strategies tend to produce reliable portfolios, and several flagship offerings are Morningstar Medalists. Manager incentives align with fundholders'; compensation reflects longer-term performance factors, and portfolio managers invest in the firm’s strategies as part of their compensation plans.

The firm’s funds tend to be well-priced, but they aren’t as competitive as many highly regarded peers of similar scale. Recent product launches include thematic and single-country strategies, both of which carry the potential for volatile performance and flows, along with misuse by investors. The firm remains intrepid when it comes to developing an environmental, social, and governance-focused framework and continues to move into other areas such as direct indexing through its 55iP acquisition and China through its joint venture, but these complicated initiatives take time to assess any real and lasting effect.

Rated on Published on

Outpacing both its peers and the category benchmark, this strategy’s Retirement share class, has had a noteworthy track record.

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Morningstar Manager Research

Performance

This share class led its average peer by an annualized excess return of 2.6 percentage points over a 10-year period. And it was also ahead of the category index, the Russell 2000 Value Index, by 2.7 percentage points over the same period.

The risk-adjusted performance only continues to make a case for this fund. The share class outstripped the index with a higher Sharpe ratio, a measure of risk-adjusted return, over the trailing 10-year period. Often, higher returns are associated with more risk. However, this strategy stayed in line with the benchmark's standard deviation. However, the share class proved itself ineffective as it was unable to generate alpha, over the same 10-year period, against the category group index: a benchmark that encapsulates the performance of the broader asset class.

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Fees are one of the most predictive factors of future performance.

null Morningstar Manager Research

Morningstar Manager Research

Price

This share class lands in the second-cheapest quintile of its Morningstar Category. Its affordable expense ratio, in conjunction with the fund’s People, Process, and Parent Pillars, indicates that this share class has high potential to deliver positive alpha compared with its category benchmark, leading to its Morningstar Medalist Rating of Gold.

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Portfolio Holdings UBVLX

  • Current Portfolio Date
  • Equity Holdings
  • Bond Holdings
  • Other Holdings
  • % Assets in Top 10 Holdings 30.1
Top 10 Holdings
% Portfolio Weight
Market Value USD
Sector

KeyCorp

3.89 314.9 Mil
Financial Services

Citizens Financial Group Inc

3.71 300.2 Mil
Financial Services

JPMorgan Prime Money Market Inst

3.44 278.2 Mil
Cash and Equivalents

Old National Bancorp

3.30 266.6 Mil
Financial Services

F N B Corp

3.20 259.0 Mil
Financial Services

Ensign Group Inc

2.85 230.9 Mil
Healthcare

Berry Global Group Inc

2.81 227.2 Mil
Consumer Cyclical

Devon Energy Corp

2.80 226.6 Mil
Energy

The Brink's Co

2.73 221.1 Mil
Industrials

Graphic Packaging Holding Co

2.43 196.4 Mil
Consumer Cyclical