JPMorgan Global Allocation's go-anywhere approach isn't for the faint of heart, but it has rewarded investors' patience. Four cheaper share classes are worthy of a renewed Morningstar Analyst Rating of Silver, while the A, C, R2, and R3 share classes get Bronze.
Lead manager Jeff Geller, who also serves as CIO of J.P. Morgan's U.S. multi-asset group, tunes this fund's allocations to the firm's market views. Geller has the flexibility to take stock or bond exposure anywhere from 10% to 90% of the portfolio with one constraint: The fund must keep at least 40% of assets in foreign securities. Rapid-fire allocation shifts give this fund a volatile profile, but Geller keeps a lid on risk by managing volatility to a 60% MSCI World/40% Bloomberg Barclays Global Bond Index.
With few long-term strategic allocations, tactical allocation signals drive most of this fund's returns, and Geller won't hesitate to put his foot on the gas. Most dramatically, Geller has at different points ramped up international government bonds to 50% of the portfolio and sold them short by more than 10%. Derivatives allow the fund to stay nimble in rapidly changing market environments like the second quarter of 2020, when the fund dialed up equity risk by almost 10 percentage points.
Two new faces, Michael Feser and Philip Camporeale, joined Geller on the portfolio management roster in November 2020. Both have 20-plus years of experience with J.P. Morgan and bring significant fixed-income expertise to the table. Besides the other named managers, J.P. Morgan's seasoned multi-asset group supports Geller through an established tactical process that's been in use since 1999 and boasts an impressive record: Tactical signals have added value in 15 of the past 21 calendar years.
This fund has had rocky periods when tactical signals misfire, including 2018 and 2019, but delivers over the long haul. The fund's I share class boasts returns that outpaced the Morningstar Global Allocation Index and the world allocation Morningstar Category since inception through May 2021.