JPMorgan Developed International Value A JFEAX

Fees are a weakness here. The strategy's lofty fees are a high hurdle to clear, as it is priced within the second-highest quintile among peers.

The strategy's effective investment philosophy supports a High Process Pillar rating. Independent of the rating, analysis of the strategy's portfolio shows it has maintained a significant underweight position in quality exposure and an overweight in volatility exposure compared with category peers. Low quality exposure is attributed to stocks with higher financial leverage and lower profitability. And high volatility exposure is rooted in stocks that have a higher standard deviation of returns. The management team's large personal investment in the strategy helps it earn an Above Average People Pillar rating. 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.

JPMorgan Developed International Val Fd earns a High Process Pillar rating.

The main driver of the rating is its parent firm's excellent long-term risk-adjusted performance, as shown by the firm's average 10-year Morningstar Rating of 3.3 stars. Respectable risk-adjusted performance also bolsters the rating. This can be seen in the fund's 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 54% supports the process. The measure indicates the percentage of a firm's funds that survived and surpassed their respective category's median Morningstar Risk-Adjusted Return for the period. Their impressive success ratio suggests that this firm does well for investors and that this fund may benefit from that.

This strategy leans toward smaller, deeper value companies than its average peer in the Foreign Large Value Morningstar Category. Analyzing additional factors, this strategy tilts consistently toward stocks with lower quality or the shares of companies with more financial leverage and lower profitability, compared with Morningstar Category peers over the past few years. Such positions do not tend to provide much ballast for a portfolio. In the latest month, the strategy was also less exposed to the Quality factor compared with Morningstar Category peers. 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. Additionally, the managers have tended to overweight yield, shown by the portfolio's high exposure to stocks paying dividends or buying back shares. 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. In this month, the strategy also had more exposure to the Yield factor over 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 energy relative to the category average by 12.2 and 2.5 percentage points, respectively. The sectors with low exposure compared to category peers are technology and consumer defensive, underweight the average by 7.3 and 5.5 percentage points of assets, respectively. The strategy owns 242 securities and is relatively concentrated. Specifically, 19.4% of the strategy's assets are housed within the top 10 holdings, as opposed to the category’s 14.7% average. And in closing, in terms of portfolio turnover, this fund trades less frequently than the category’s average, potentially limiting costs to investors.

The most significant contributor to the rating is its parent firm's impressive long-term risk-adjusted performance, as shown by the firm's average ten-year Morningstar Rating of 3.3 stars. The combined average five-year excess return of each manager also contributes to the rating. It suggests that the funds they manage have outperformed the average manager.

Michael Barakos, the longest-tenured manager on the strategy, provides strong guidance, offering over 25 years of listed portfolio management experience. The team boasts an experienced corps of listed portfolio managers, with three other managers supporting Michael Barakos. Together, they average 18 years of listed portfolio management experience. The management team has provided the fund with commendable continuity. There have been no documented departures within the past five years.

J.P. Morgan is a well-resourced, diligent, and responsible steward of client assets. Investment teams are seasoned and stalwart, especially in equity and fixed income, the latter of which has successfully undergone substantial transformation in recent years. The firm offers competitive compensation that is aligned with fundholders and shows strong retention at senior levels of the organization. It demonstrates a culture of constant innovation and willingness to evolve. For example, J.P. Morgan recently expanded its investment committee process through which senior leaders review various teams and strategies, and it continues to develop proprietary portfolio management and risk oversight tools. Some funds still face high fee hurdles, but the firm has generally lowered expenses as it has grown.

The firm isn't without its complications. J.P. Morgan's product offering is extensive, and some areas need improvement. For instance, its multi-asset business has faced some challenges as a result of complex investment processes. The firm continues to build out its footprint in China, but its efforts there remain unproven. Although not every strategy is the best in its class, J.P. Morgan remains earnest in the pursuit of excellence, and investors are well-served.

It has provided similar returns compared with peers, but better returns compared with the category benchmark. Over an eight-year period, this share class' outperformed the category’s average by an annualized 56 basis points. But when expanded to a 10-year period, it matched the average's 6.2% return. However, it was able to clear the hurdle of outperforming the category index, MSCI ACWI ex USA Value Index, where it led by an annualized 55 basis points over the same 10-year period. Although the overall rating does not hinge on one-year performance figures, it is notable that this share class returned 17.7%, an impressive 6.9-percentage-point lead over its average peer, placing it within the top 10% of its category.

When adjusting for risk, this fund is competitive. The share class had a higher Sharpe ratio, a measure of risk-adjusted return, than the index over the trailing 10-year period. However, these returns were accompanied by additional risk, with a standard deviation of 17.5% compared to the benchmark's 16.0%. 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.

It is good practice to weigh them heavily in any investment evaluation. This share class imposes a fee that places it in its Morningstar Category's second-costliest quintile. Despite this fee, the fund’s People, Process, and Parent Pillars suggest this share class can deliver positive alpha relative to its category benchmark, earning it a Morningstar Medalist Rating of Silver.