Why We Upgraded Dodge & Cox Emerging Markets Stock

Increased conviction in the team’s effective mix of qualitative and quantitative techniques drove a Process Pillar upgrade to Above Average from Average for Dodge & Cox Emerging Market Stock DODEX, boosting its Morningstar Medalist Rating to Silver from Bronze.

This partially quantitative approach is atypical for the firm. It uses computer models to screen roughly 4,000 companies in about 60 emerging- and frontier-markets countries on their valuation, business quality, management effectiveness, and growth, with valuation getting the most weight. The model does not have the final say on buys and sells; rather, it guides analysts to good candidates for fundamental research. It is especially useful in helping the firm’s analysts identify smaller portfolio candidates that they don’t fully cover yet. The fund has performed well since its relatively recent May 2021 launch, beating about two thirds of peers and its index through April 21, 2025.

This is a more broadly diversified portfolio than most of the firm’s other offerings, with more than 200 holdings spanning mid- and small-cap territory. Typically, 15–25 holdings, including most of the fund’s top holdings, overlap with Dodge & Cox International Stock DODFX, suggesting they’ve gotten thorough scrutiny.

Key Morningstar Metrics for Dodge & Cox Emerging Markets Stock:

Morningstar Medalist Rating: Silver

Process Pillar: Above Average

People Pillar: Above Average

Parent Pillar: High

Analyst Appreciation

Increased conviction in J.P. Morgan’s deep central analyst team drove a People Pillar upgrade to Above Average from Average for JPMorgan US Research Enhanced Equity JDESX, boosting the I shares’ Morningstar Medalist Rating to Bronze from Neutral.

J.P. Morgan’s 19-person central research team is key to JPMorgan US Research Enhanced Equity’s success. It is one of the strongest research teams in the industry, consistently making strong stock picks in recent years. This group has not only helped this strategy and its lead manager Raffaele Zingone but also J.P. Morgan’s other large-cap strategies. Team members average 23 years of industry experience and 12 years with the firm. Although the squad has seen significant turnover in the past, it has been stable since late 2023. The analysts cover a manageable 600 companies for this strategy.

The fund’s sector and individual holdings don’t stray far from the S&P 500. Analyst’s security selection drives performance and has been consistently strong for the last decade.

Key Morningstar Metrics for JPMorgan US Research Enhanced Equity I:

Morningstar Medalist Rating: Bronze

Process Pillar: Average

People Pillar: Above Average

Parent Pillar: Above Average

Too Much Turnover

Morningstar downgraded Alger Small Cap Focus‘ AOFIX People and Process Pillars, pushing its Medalist Rating to Neutral from Bronze.

Since 2020, a total of seven analysts have left the fund’s team. Two, neither of whom had been with the firm for very long, left in 2024. The team currently consists of six members, with all but one having joined the team since 2020.

Manager Amy Zhang is very clear about the types of companies she likes and professes to take a long-term approach. Portfolio turnover, however, has been higher than expected, and performance has been lackluster since 2021, mostly owing to questionable stock-picking.

Key Morningstar Metrics for Alger Small Cap Focus:

Morningstar Medalist Rating: Neutral

Process Pillar: Average

People Pillar: Average

Parent Pillar: Average