JPMorgan International Unconstrained Equity Fund - R6 - J.P. Morgan Asset Management
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JPMorgan International Unconstrained Equity Fund
(IUENX)

JPMORGAN INTERNATIONAL UNCONSTRAINED EQUITY FUND

Harness a world of opportunity.

The International Unconstrained Equity Fund focuses on maximizing return potential by flexibly pursuing our best investment ideas across all regions and sectors of the international markets.

Fund Story  

Key Points

Expertise
  • Leverages the deep local knowledge of approximately 200 “feet on the ground” investment professionals in our regional teams, combined with the insights of our experienced global sector specialists.
Portfolio
  • High conviction portfolio, harnessing the best ideas of our research platform across the full range of international investment opportunities.
Success
  • Top-decile performance over the three-year period and top-quintile performance since inception.1
  • Top-decile batting average over three- and five-years.1
  • Outperformed its benchmark 100% of the time over rolling three-year period for the past five years.
EXCESS GROWTH OF $100,000 SINCE INCEPTION

Compared to benchmark and category average, in thousands (difference vs. benchmark)

1Source: Morningstar as of 9/30/17. I Shares. Ranked: 1 yr. (367/736), 3-yrs. (36/598), 5-yrs. (131/533), since inception 70/595 and 10-yrs. n/a. Consistency is measured by batting average — calculated by dividing the number of quarters/months where the manager beats/matches the index by the total number of quarters/months in the period: 1-yr. (74/767), 3-yrs. (2/667), 5-yrs. (25/631) and 10-yrs. n/a. Past performance does not guarantee future results. "

Chart source: Morningstar, J.P. Morgan Asset Management; as of 9/30/17. Foreign Large Blend category. Shown for the I Share class. Other share classes may have higher expenses, which would result in lower returns. Since inception (11/30/11) with dividend and capital gains reinvested. There is no direct correlation between a hypothetical investment and the anticipated performance of the Fund. The $0 value for benchmark growth is the baseline for the over and under comparison.

Performance

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Commentary

As of September 30, 2017

Quarter in review
  • The JPMorgan International Unconstrained Equity Fund (I Class Shares) outperformed the benchmark, the MSCI All Country World Index, ex-U.S. (net of foreign withholding taxes), for the quarter ended September 30, 2017.
  • ASML Holding NV (2.5% portfolio weighting), the Dutch semiconductor equipment manufacturer, contributed during the quarter. Revenues were up by 21% year on year, driven by sales to the makers of memory chips and by services sales. Semiconductor equipment makers are currently thriving as global demand for chips from cloud and data centers continues to grow.
  • NN Group NV (2.3% portfolio weighting), the Dutch insurance group that was spun off from ING, outperformed for the quarter, due to its solid capitalization, good dividend growth prospects and high dividend yield. The company also finalized the acquisition of Delta Lloyd, which helps with consolidation and provide greater stability within the insurance sector.
  • Standard Chartered, the U.K.-based banking group with operations in Asia, the Middle East and Africa, detracted from relative performance this quarter. The stock came under pressure after reporting earnings in the middle of the quarter that were in line with expectations, but flat revenue growth, disappointing loan growth, and lack of clarity about the future of U.K. banking regulations weighed on the stock throughout the quarter. We no longer hold the position.
  • British American Tobacco plc (2.7% portfolio weighting), the British multinational tobacco company headquartered in London, detracted from performance. Shares came under pressure on news related to the FDA’s intentions for increased scrutiny on nicotine levels. The FDA’s initiatives are certainly weighing on near-term sentiment but our growth assumptions outside the U.S. remained unchanged, and we continue to hold the stock.
Looking ahead
  • This environment is very positive for equity investing, particularly outside the U.S., where valuations seem a lot more reasonable and high operational leverage, particularly in Europe and Japan, will see companies benefit from better nominal growth.
  • A key question for the rest of the year will be the extent to which bond and equity markets can withstand a gradual reduction in monetary stimulus, which has helped to support markets in recent years. In addition, investors will be keeping a close eye on geopolitics, particularly for any escalation in the tensions within North Korea.
  • While this uncertainty could lead to an increase in volatility, a healthy global economy should keep driving equity markets forward.

Fees and Minimums

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Portfolio

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Management

Fund Managers

Documents

Disclaimer

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 1.00% for A Shares, 1.50% for C Shares, 0.75% for I Shares, 1.30% for R2 Shares, 0.65% for R5 Shares and 0.55% 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 10/31/2019 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.

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

The MSCI All Country World Index, ex-U.S. (net of foreign withholding taxes) is a free float-adjusted market capitalization weighted index measuring equity market performance of developed and emerging markets, excluding the United States.

The performance of the Lipper International Large-Cap Growth 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.

International investing has a greater degree of risk and increased volatility due to political and economic instability of some overseas markets. Changes in currency exchange rates and different accounting and taxation policies outside the U.S. can affect returns.
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.

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