JPMorgan Global Allocation's experienced roster of portfolio managers benefit from the firm's broad resources and sharp analytical tools to shrewdly navigate markets and nimbly implement views. The strategy's institutional, R4, R5, and R6 share classes receive Morningstar Medalist Ratings of Silver, while its A, C, R2, and R3 share classes are rated Bronze.
This strategy exercises flexibility across currencies, regions, asset classes, and credit qualities. Duration is unconstrained, and the team may hold up to 80% of the portfolio in cash. Jeff Geller, who has been the lead portfolio manager here since the strategy's 2011 inception, and his four comanagers begin by considering the firm's capital market assumptions combined with the output of their proprietary models. The portfolio managers then determine the appropriate asset exposures that reflect their views on relative value and implement those by allocating to underlying sleeves (11 as of May 2023) resourced from across the firm’s specialist teams. Derivatives are often used to curate portfolio characteristics at a macro level.
As of April 2023, the portfolio held 61% of its assets in equity, with more than half in U.S. large-cap stocks and most of the remainder in international or emerging-markets equities. Tighter monetary policies as well as geopolitical uncertainties have shaped the broad fixed-income exposure, which represented the remainder of the portfolio and included allocations to corporate credit, global developed government bonds, and income-focused debt. Over the prior year, the team implemented more cautious positioning—exchanging high-yield and crossover credit exposures for investment-grade bonds—while adding duration back into the portfolio following an aggressive series of interest-rate hikes by central banks.
Since the strategy's first full month of performance in June 2011 through May 2023, the institutional shares generated a 5.1% annualized return that outpaced the 4.7% of its custom bogy (a 60% MSCI ACWI/40% Bloomberg Global Aggregate combination), the 3.0% of its global allocation Morningstar Category, and matched the return of its Morningstar Global Allocation TR USD Index category benchmark. Despite misreading market sentiment in 2021 and 2022, over the longer term this strategy has a history of navigating rough markets more often better than not.