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.