Inside one fund house, J.P. Morgan charges 0.65% for a broad US equity fund and 1.50% for a value-tilted one. That 85-basis-point gap — that’s 0.85 percentage points a year — is an implicit claim that picking the cheaper parts of the US market adds enough to justify the extra cost. In IA North America, the official universe of UK-registered US-equity funds, active managers have spent most of the last decade failing to make exactly that case.
Three funds, two strategies, one catch
The data block here has a wrinkle worth naming upfront. All three funds are institutional share classes — the kind you’d typically access through a pension scheme, discretionary manager or large platform, not by opening an ISA on a Tuesday afternoon. The JPMorgan US Value Fund listed here is a CNH share class — denominated in offshore Chinese renminbi — which tells you it was designed primarily for Asian institutional buyers, not a retail investor in Birmingham. The fees are therefore not a direct guide to what a private investor in the UK would pay; retail equivalents typically sit higher. Keep that in mind as we compare.
Within those constraints, the comparison is still meaningful. JPMorgan US Value runs at 1.50% annually. The two versions of the JPMorgan America Equity Fund — available in USD and EUR share classes, both at 0.65% and together representing €8.2bn in assets — offer a broader US exposure for considerably less. Same house, same analy sts, same back-office infrastructure. One bets that cheap US stocks will outperform; the other simply buys the market.
Why IA North America makes this hard
The broader context matters here. IA North America — the UK universe of US-equity funds — is the category where passive investing has made the strongest case for itself. The S&P 500 is one of the most researched, most traded, most efficiently priced markets in the world. When thousands of analy sts are staring at the same 500 companies every day, finding genuine mispricing is hard. Finding it systematically, year after year, enough to cover a 1.50% annual fee, is harder still.
Value as a style has made this worse. From roughly 2010 to 2022, value investing — buying stocks that look cheap relative to earnings or book value — consistently underperformed growth in the US. The big cloud companies (Microsoft, Amazon, Alphabet) and the semiconductor giants weren’t cheap by traditional measures, and they drove the index. A fund tilted away from those names paid for it in relative returns.
The US value premium is theoretically real. Collecting it, net of fees, has been the hard part.
If you already hold a broad US tracker elsewhere in your portfolio, a value fund doesn’t just add US exposure — it adds a specific bet that cheaper-looking US stocks will outperform more expensive ones. That’s a genuine active view, and it’s one that had a reasonable run in 2022 when rate rises hit growth stocks hard. Whether the manager can time that rotation, or whether you’d rather just own both cheaply through the America Equity EUR share class at 0.65%, is the decision the fee gap forces you to make.
What to watch next
First, the interest-rate environment. Value stocks in the US tend to do better when rates are higher and the market stops paying a premium for distant growth. If the Federal Reserve holds rates at current levels or moves them higher, the case for a value tilt improves. Second, the retail fee picture: the institutional OCFs here don’t reflect what a private investor would actually pay, and the spread between value and blend strategies is likely different at the retail class level — worth checking on your platform before assuming the 85bp gap translates directly. And third, AUM momentum: the America Equity strategy holds €8.2bn, which is significant. How much flows into the value strategy over the next two quarters would signal whether the institutional market believes the cycle has turned. That number is the one worth watching most.
Funds Benchmark provides research and tooling for institutional and private investors. Nothing in this note is investment advice or a recommendation to buy or sell any specific fund. Past performance is not a reliable indicator of future results.