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JPMorgan International Equity I VSIEX

Quantitative rating as of | See JPMorgan Investment Hub
  • NAV / 1-Day Return 17.79  /  0.78 %
  • Total Assets 4.5 Bil
  • Adj. Expense Ratio
    0.700%
  • Expense Ratio 0.700%
  • Distribution Fee Level Below Average
  • Share Class Type Institutional
  • Category Foreign Large Blend
  • Investment Style Large Blend
  • Min. Initial Investment 1,000,000
  • Status Open
  • TTM Yield 2.45%
  • Turnover 31%
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Morningstar’s Analysis VSIEX

Quantitative rating as of .

The Morningstar Quantitative Rating for funds is analogous to the rating our analyst might assign to the fund if they covered it.

Our analysts assign Bronze ratings to strategies they’re confident will outperform a relevant index, or most peers, over a market cycle.

Summary

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JPMorgan International Equity I’s strong process and parent firm underpin this strategy's Morningstar Quantitative Rating of Bronze. The portfolio maintains a cost advantage over competitors, priced within the second-lowest fee quintile among peers.

The strategy's sensible investment philosophy merits an Above Average Process Pillar rating. Independent of the rating, analysis of the strategy's portfolio shows it has maintained a significant overweight position in quality exposure and an underweight in yield exposure compared with category peers. High quality exposure is attributed to stocks with low financial leverage and strong returns on equity. And a low yield exposure is rooted in holding fewer stocks with high dividend or buyback yields -- instead, typically holding stocks in an early stage of development. The strategy belongs to a strong asset-management firm that earns an Above Average Parent Pillar rating. The firm, for example, has had a favorable lineup success ratio and overall affordable fees. Finally, the strategy's longest-tenured manager is experienced, but still gets an Average People Pillar rating.

Process

| Above Average |

Morningstar's evaluation of this fund's process aims to determine how repeatable, consistent, and reliable execution is, and whether management maintains competitive advantage. JPMorgan International Equity Fund earns an Above Average Process Pillar rating.

This strategy skews toward larger, more growth-oriented companies compared with its average peer in the Foreign Large Blend Morningstar Category. Looking at additional factor exposure, this strategy has a defensive tilt owing to its exposure to high-quality stocks. This means the fund holds consistently profitable, growing companies with solid balance sheets that may help it weather downturns better than Morningstar Category peers. The strategy is also historically more exposed compared with Morningstar Category peers. The managers have not exhibited a preference for or aversion to yield; the current portfolio has about average exposure. High-yield stocks tend to be more mature and less volatile, unless they cut their dividends. But when compared with category peers, the strategy historically has had less exposure. Additionally, the managers do not tilt in favor of or against bearing liquidity risk, the current portfolio bears about average exposure compared with other equity strategies. Although there is some evidence to indicate investors earn a premium for shouldering this risk, in the case of a bear market, less-liquid assets are more difficult to sell without adversely affecting prices. 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 by 3.3 percentage points in terms of assets compared with the average portfolio in the category, and its energy allocation is similar to the category. The sectors with low exposure compared to their category peers are consumer cyclical and real estate, with consumer cyclical underweighting the average portfolio by 3.4 percentage points of assets and real estate similar to the average. The portfolio is composed of 76 holdings and is rather concentrated at the top, relatively. Specifically, 28.7% of the fund’s assets are housed within the top 10 holdings, as opposed to the typical peer's 14.7%. And in closing, in terms of portfolio turnover, this portfolio turns over its holdings less quickly than peers, potentially leading to lower costs for investors and eliminating a drag on performance.

People

| Average |

The team at JPMorgan International Equity Fund has benefited from its longest-tenured manager and minimal team turnover, but it still does not stand out as one of the industry's best, warranting an Average People Pillar rating. Thomas Murray, the longest-tenured manager on the strategy, boasts over 25 years of portfolio management experience. The average Morningstar Rating of the strategies they currently manage is 2.7 stars, demonstrating disappointing risk-adjusted performance. The team boasts an experienced corps of listed portfolio managers, with three others supporting Thomas Murray. Together they average 21 years of portfolio management experience. As a team, they manage two investment vehicles together, with a Bronze asset-weighted average combined Morningstar Analyst and Quantitative Rating, demonstrating their potential to deliver positive alpha in aggregate. The management team has provided the fund with commendable continuity. There have been no documented departures within the past three years.

Parent

| Above Average |

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

As of 2022, this investment stalwart manages more than USD 2.5 trillion in AUM. Composed of various cohorts globally and a diverse set of 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.

Performance

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This strategy's Institutional share class has held up nicely, holding even with its peers and outlasting the category benchmark. Over a 10-year period, this share class' 3.9% gain mirrored the category's average return. And it beat the category index's, MSCI ACWI ex USA Index's, gain by an annualized 15 basis points over the same period.

The risk-adjusted performance only continues to make a case for this fund. The share class had a higher Sharpe ratio, a measure of risk-adjusted return, than the index 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. Finally, the share class proved itself effective by generating positive alpha, over the same 10-year period, against the category group index: a benchmark that encapsulates the performance of the broader asset class.

Price

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It is important to pay attention to fees, as lower-cost investments maximize investors' returns. This share class is within the second-cheapest quintile of its Morningstar Category. Its attractive expense ratio, in conjunction with the fund’s People, Process, and Parent Pillars, results in a judgment that this share class should be able to deliver positive alpha compared with its category benchmark, leading to its Morningstar Quantitative Rating of Bronze.