JPMorgan Large Cap Value Fund - C - J.P. Morgan Asset Management

Designed To

Designed to provide capital appreciation primarily through a portfolio of U.S. large cap value stocks.


  • Analyzes company prospects for as long as five years, to gain insight into a company's real growth potential
  • Research-driven approach focuses on identifying the most undervalued securities in each sector
  • Looks for attractive valuations as well as catalysts for stock price increases, higher potential reward versus risk, and temporary mispricing caused by market overreactions


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As of September 30, 2017

Quarter in review
  • The JPMorgan Large Cap Value (I Class Shares) outperformed its benchmark, the Russell 1000 Value Index, for the quarter ended September 30, 2017.
  • An overweight position to General Motors Co. (GM) (3.6% portfolio weighting) was the top contributor in the quarter after the company posted strong earnings, topping consensus estimates by a wide margin. GM has been operating at a high level – monthly sales have continued to track higher throughout the quarter, and management has taken steps to materially improve inventory levels. We like GM as the company’s strong management team, attractive valuation, healthy free cash flow, and commitment to capital return present a compelling risk/reward opportunity.
  • An overweight position to DR Horton, Inc. (1.6% portfolio weighting) contributed to performance as investors reacted positively to the company’s announcement that it would maintain preliminary fiscal year 2018 guidance in the wake of damage caused by Hurricanes Harvey and Irma. The company significantly reduced fiscal year 2017 revenue guidance due to delays caused by the hurricanes. We like DR Horton long-term as improving consumer confidence, wage growth, low unemployment and continued household formation should help to offset the impact of rising interest rates on home demand.
  • An overweight position in Allergan plc (1.9% portfolio weighting) detracted from results. One of Allergan’s key competitors, Teva, reported topline weakness which served to depress share prices within the specialty pharmaceutical segment broadly. Despite the negative read-through from Teva, we were encouraged by Allergan’s increased earnings per share and revenue guidance and strong new product cycle.
  • An overweight position in United Continental Holdings, Inc. (1.1% portfolio weighting) pressured returns. The combination of concerns about heightened competition in the airline industry and disappointing PRASM (Passenger Revenue per Available Seat Mile) guidance weighed on the share price. We remain positive on United Continental due to our belief that improved expense discipline and operational execution should allow the company to meaningfully close the margin gap versus its peers.
Looking ahead
  • Our approach leads us to invest in companies with compelling valuations, combined with contrarian sentiment and risk control. We remain overweight the more cyclical areas of the market and underweight bond proxies
  • We continue to think that higher rates will be a tailwind to financials. While we are most overweight money center banks, looking ahead we acknowledge that regionals should also benefit from some combination of corporate tax reform and decent loan growth. Our real estate investment trust (REIT) exposure remains limited; however, we currently own shopping center REITs, where the underperformance seems overdone. We continue to be underweight energy, yet we prefer to have exposure to Permian producers where economic fundamentals continue to improve.
  • The portfolio continues to have large exposures to stocks that are identified as cheap within our dividend discount model, exhibit good free cash flow and strong cash flow return-on-investment.

Fees and Minimums

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Fund Managers



1Please refer to the prospectus for additional information about cut-off times.

Total return assumes reinvestment of income.

The Fund's adviser and/or its affiliates have contractually agreed to waive fees and/or reimburse expenses to the extent Total Annual Fund Operating Expenses (excluding acquired fund fees and expenses, dividend and interest expenses related to short sales, interest, taxes, expenses related to litigation and potential litigation and extraordinary expenses) exceed 0.93% for A Shares, 1.44% for C Shares, 0.69% for I Shares, 1.19% for R2 Shares, 0.54% for R5 Shares and 0.44% for R6 Shares of the average daily net assets. The Fund may invest in one or more money market funds advised by the adviser or its affiliates (affiliated money market funds). The Fund's adviser has contractually agreed to waive fees and/or reimburse expenses in an amount sufficient to offset the fees and expenses of the affiliated money market funds incurred by the Fund because of the Fund's investment in such money market funds. This waiver is in effect through 10/31/2018 for A Shares, 10/31/2019 for C Shares, 10/31/2019 for I Shares, 10/31/2019 for R2 Shares, 10/31/2019 for R5 Shares and 10/31/2019 for R6 Shares, at which time the adviser and/or its affiliates will determine whether to renew or revise it. The difference between net and gross fees includes all applicable fee waivers and expense reimbursements.

The quoted performance of the Fund includes performance of a predecessor fund/share class prior to the Fund's commencement of operations. Please refer to the current prospectus for further information.

Mutual funds have fees that reduce their performance: indexes do not. You cannot invest directly in an index.

The Russell 1000 Value Index is an unmanaged index measuring the performance of those Russell 1000 companies with lower price-to-book ratios and lower forecasted growth values.

The performance of the Lipper Large-Cap Value Funds Index includes expenses associated with a mutual fund, such as investment management fees. These expenses are not identical to the expenses charged by the Fund.

Total return figures (for the fund and any index quoted) assume payment of fees and reinvestment of dividends (after the highest applicable foreign withholding tax) and distributions. Without fee waivers, fund returns would have been lower. Due to rounding, some values may not total 100%.

©2017, American Bankers Association, CUSIP Database provided by the Standard & Poor's CUSIP Service Bureau, a division of The McGraw-Hill Companies, Inc. All rights reserved.
The Morningstar RatingTM for funds, or "star rating", is calculated for managed products (including mutual funds, variable annuity and variable life subaccounts, exchange-traded funds, closed-end funds, and separate accounts) with at least a three-year history. Exchange traded funds and open-ended mutual funds are considered a single population for comparative purposes. It is calculated based on a Morningstar Risk-Adjusted Return measure that accounts for variation in a managed product's monthly excess performance, placing more emphasis on downward variations and rewarding consistent performance. The top 10% of products in each product category receive 5 stars, the next 22.5% receive 4 stars, the next 35% receive 3 stars, the next 22.5% receive 2 stars, and the bottom 10% receive 1 star. The Overall Morningstar Rating for a managed product is derived from a weighted average of the performance figures associated with its three-, five-, and 10-year (if applicable) Morningstar Rating metrics. The weights are: 100% three-year rating for 36-59 months of total returns, 60% five-year rating/40% three-year rating for 60-119 months of total returns, and 50% 10- year rating/30% five-year rating/20% three-year rating for 120 or more months of total returns. While the 10-year overall star rating formula seems to give the most weight to the 10-year period, the most recent three-year period actually has the greatest impact because it is included in all three rating periods.Rankings do not take sales loads into account.
The following risks could cause the fund to lose money or perform more poorly than other investments. For more complete risk information, see the prospectus.

The prices of equity securities are sensitive to a wide range of factors, from economic to company-specific news, and can fluctuate rapidly and unpredictably, causing an investment to decrease in value.
Total return assumes reinvestment of income.

The top 10 holdings listed reflect only the Fund's long-term investments. Short-term investments are excluded. Holdings are subject to change. The holdings listed should not be considered recommendations to purchase or sell a particular security. Each individual security is calculated as a percentage of the aggregate market value of the securities held in the Fund and does not include the use of derivative positions, where applicable.

P/E ratio: the number by which earnings per share is multiplied to estimate a stock's value.

P/B ratio: the relationship between a stock's price and the book value of that stock.

Beta measures a fund's volatility in comparison to the market as a whole. A beta of 1.00 indicates a fund has been exactly as volatile as the market.

Sharpe ratio measures the fund's excess return compared to a risk-free investment. The higher the Sharpe ratio, the better the returns relative to the risk taken.

Tracking Error: The active risk of the portfolio, which determines the annualized standard deviation of the excess returns between the portfolio and the benchmark.

Alpha: The relationship between the performance of the Fund and its beta over a three-year period of time.

Standard deviation/Volatility: A statistical measure of the degree to which the Fund's returns have varied from its historical average. The higher the standard deviation, the wider the range of returns from its average and the greater the historical volatility. The standard deviation is calculated over a 36-month period based on Fund's monthly returns. The standard deviation shown is based on the Fund's Class A Shares or the oldest share class, where Class A Shares are not available.

R2: The percentage of a Fund's movements that result from movements in the index ranging from 0 to 100. A Fund with an R2 of 100 means that 100 percent of the Fund's movement can completely be explained by movements in the Fund's external index benchmark.

EPS: Total earnings divided by the number of shares outstanding.

Risk measures are calculated based upon the Funds' broad-based index as stated in the prospectus.