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JPMorgan Global Allocation R6 GAOZX

Medalist Rating as of | See JPMorgan Investment Hub
  • NAV / 1-Day Return 20.08  /  +0.50 %
  • Total Assets 3.1 Bil
  • Adj. Expense Ratio
    0.650%
  • Expense Ratio 0.650%
  • Distribution Fee Level Below Average
  • Share Class Type Retirement, Large
  • Category Global Allocation
  • Investment Style Large Growth
  • Credit Quality / Interest Rate Sensitivity Medium/Moderate
  • Status Open
  • TTM Yield 0.55%
  • Turnover 136%

USD | NAV as of May 24, 2024 | 1-Day Return as of May 24, 2024, 10:12 PM GMT+0

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Morningstar’s Analysis GAOZX

Medalist rating as of .

A flexible approach to a diversified global portfolio.

Our research team assigns Silver ratings to strategies that they have a high conviction will outperform the relevant index, or most peers, over a market cycle on a risk-adjusted basis.

A flexible approach to a diversified global portfolio.

Associate Director Emory Zink

Emory Zink

Associate Director

Summary

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.

Rated on Published on

Jeff Geller and his team employ a broad toolkit, deep research, and asset-class expertise from across the firm to nimbly position this offering.

Associate Director Emory Zink

Emory Zink

Associate Director

Process

Above Average

It continues to merit an Above Average Process rating.

This strategy aims to outstep the returns of a 60% MSCI All Country World Index/40% Bloomberg Global Aggregate Bond Index custom benchmark with lower volatility. To do so, it exercises flexibility across currencies, regions (a minimum of 30% in non-U.S. exposures), asset classes (between 10% and 90% in either equities or bonds and a maximum of 60% in alternatives), and credit qualities (no more than 70% in junk bonds). Duration is unconstrained, and the team may hold up to 80% of the portfolio in cash.

As a starting point, the strategy’s quintet of portfolio managers consider the firm’s broad intermediate-term market views (six to 18 months) and negotiate the resulting themes with the output of the multi-asset group's proprietary models. From there, the decision-makers revisit the portfolio's broad contours and, depending on their perception of relative value across global markets, they may make adjustments to the underlying sleeves (there were 11 as of April 2023, and each represented a stylistic approach to a subasset class managed by one of the firm's well-resourced specialist groups). Depending on the overall desired profile, Geller and his colleagues will hold single securities or derivatives (futures, forwards, puts, calls, and total-return swaps) to curate the final portfolio’s characteristics.

This is a flexible portfolio with a global focus. Since its 2011 inception, the strategy's equity exposure has ranged from roughly 34% to 75%, and as of April 2023 (date of portfolio descriptions here) it sat at 61%. Within equities, U.S. large-cap strategies, U.S. small-cap strategies, international equities, and emerging-markets equities represented 34%, 1%, 19%, and 5% of assets, respectively. At the end of 2020, the team introduced a dedicated China A-shares sleeve to the portfolio, citing the country’s higher growth potential relative to other regions of the world; it most recently occupied 2% of the broader equity allocation.

Following a year of aggressive central bank interest-rate increases, the team implemented more-cautious positioning in the fixed-income portfolio. Notably, dedicated exposures to high-yield and crossover credit (bonds likely to experience an upgrade to investment-grade) were exchanged for global developed government bonds (an increase of roughly 10 percentage points over the prior year to 19%) and a dedicated U.S. investment-grade corporate credit sleeve (now 25% of the portfolio, but one that hadn’t held meaningful assets since 2020). In early 2022, the team introduced a flexible income-oriented bond sleeve (5%) to the portfolio, trusting its manager Andrew Norelli to ferret out opportunities across a volatile debt landscape. Even as Jeff Geller and the team have raised the credit quality of the portfolio, they’ve also thoughtfully increased duration.

Rated on Published on

A quintet of portfolio managers benefits from the breadth and depth of resources across the firm, resulting in an Above Average People rating.

Associate Director Emory Zink

Emory Zink

Associate Director

People

Above Average

Jeff Geller, lead portfolio manager and CIO of the firm's multi-asset group, has helmed this strategy since its 2011 inception. His current comanagers include Grace Koo, who focuses on quantitative approaches to asset allocation, and Eric Bernbaum, who is in charge of portfolio construction and implementation; both joined this strategy in February and December, respectively, of 2014. That trio overlapped with James Elliot, who comanaged here beginning at inception and influenced tactical positioning within the portfolio before his March 2018 departure. Questions followed Elliot's exit around whether the team had the right mix of inputs to execute on its flexible mandate, and in November 2020, two new comanagers expanded the lineup. Michael Feser provides perspectives on risk management and capital market assumptions. Philip Camporeale brings insight around global monetary policies and fixed income to the group.

Geller and his four comanagers determine the asset allocations and curate the total portfolio characteristics, but the underlying subasset sleeves are managed by well-resourced specialist groups from across the firm. As of April 2023, this included a total of 11 distinct sleeves, each led by a reputable sector specialist or two with access to dozens of security analysts, risk specialists, and traders within his or her cohort.

Rated on Published on

A well-resourced, thoughtful, and disciplined steward of client assets, JPMorgan Asset Management maintains an Above Average Parent rating.

Associate Director Emory Zink

Emory Zink

Associate Director

Parent

Above Average

As of 2022, this investment stalwart manages more than USD 2.5 trillion in AUM. Composed of various global cohorts and diverse asset classes, the firm has more tightly integrated its capabilities in recent years, notably through the development of proprietary analytical and risk systems. Investment teams are robustly staffed and helmed by seasoned contributors. The firm’s strategies tend to produce reliable portfolios, and several flagship offerings are Morningstar Medalists. Manager incentives align with fundholders'; compensation reflects longer-term performance factors, and portfolio managers invest in the firm’s strategies as part of their compensation plans.

The firm’s funds tend to be well-priced, but they aren’t as competitive as many highly regarded peers of similar scale. Recent product launches include thematic and single-country strategies, both of which carry the potential for volatile performance and flows, along with misuse by investors. The firm remains intrepid when it comes to developing an environmental, social, and governance-focused framework and continues to move into other areas such as direct indexing through its 55iP acquisition and China through its joint venture, but these complicated initiatives take time to assess any real and lasting effect.

Rated on Published on

During the prior decade, shrewd tactical calls helped the fund’s institutional shares outperform its typical category peer in more calendar years than not.

Associate Director Emory Zink

Emory Zink

Associate Director

Performance

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% Global Aggregate combination) and the 3.0% of its global allocation category, and matched the return of its Morningstar Global Allocation TR USD Index category benchmark. The strategy's volatility was higher than all three of those comparators.

Recent periods have been a challenge. In 2021, this portfolio’s exposure to emerging-markets equities and global government bonds placed it at a disadvantage relative to many peers with higher allocations to the soaring returns of U.S. equity markets that year. An aggressive series of central bank interest-rate hikes pressured most asset classes in 2022, and this portfolio was not immune, with non-U.S. exposures a particular drag on performance relative to peers.

The strategy has navigated many tough investment periods well, though. In 2020, including the pandemic-driven selloff, the team deftly managed around shifting market conditions, resulting in a 15.6% return for the institutional shares that was nearly triple its category’s return and outpaced its benchmarks. During 2018's fourth-quarter high-yield selloff, those shares lost less than the category or either benchmark.

Published on

It’s critical to evaluate expenses, as they come directly out of returns.

Associate Director Emory Zink

Emory Zink

Associate Director

Price

Based on our assessment of the fund’s People, Process, and Parent Pillars in the context of these expenses, we think this share class will be able to deliver positive alpha relative to the category benchmark index, explaining its Morningstar Medalist Rating of Silver.

Published on

Portfolio Holdings GAOZX

  • Current Portfolio Date
  • Equity Holdings
  • Bond Holdings
  • Other Holdings
  • % Assets in Top 10 Holdings 17.7
Top 10 Holdings
% Portfolio Weight
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