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. JPMorgan Mid Cap Equity Fund earns an Above Average Process Pillar rating.
This strategy tends to hold larger, growthier companies than its average peer in the Mid-Cap Blend Morningstar Category. Analyzing additional factors, there is no consistent pattern in the differences between the factors of the fund's portfolio and its Morningstar Category peers over the past few years, according to our research, while the strategy had less exposure to momentum stocks or companies compared with Morningstar Category peers in the most recent month. Momentum strategies typically bet that stocks that have recently outperformed will continue to do so, and those that have recently underperformed will keep lagging. Avoiding the former and buying the latter could indicate that managers are averse to chasing momentum. The strategy also had similar exposure to high-volatility stocks compared with Morningstar Category peers in the most recent month. These low-risk stocks are typically at their best when markets are not. Low volatility exposure contributes to limited loss on the downside at the cost of a lag in bull markets. In addition, the strategy had more exposure to high-yield stocks compared with Morningstar Category peers in recent months. High-yield stocks tend to be associated with more mature, profitable businesses that can grow as well as provide a stream of income. Such stocks could suffer, however, if setbacks force them to cut their dividends. 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 healthcare relative to the average peer in its category by 3.9 and 3.8 percentage points in terms of assets, respectively. The sectors with low exposure compared to their category peers are basic materials and industrials, with basic materials underweighting the average portfolio by 3.3 percentage points of assets and industrials similar to the average. The portfolio is composed of 209 holdings and is diversified among those holdings. In its most recent portfolio, 11.0% of the fund’s assets were concentrated in the top 10 fund holdings, compared to the category average's 16.6%. And finally, in terms of portfolio turnover, looking at year-over-year movements, 33% of the fund's holdings have turned over, whether through increasing, decreasing, or changing a position.