JPMorgan Mid Cap Growth will have a new lead manager in early 2024, but there is enough continuity and research support to make the offering worthwhile at the right price.
J.P. Morgan gave investors and this strategy’s investment team plenty of notice when it announced lead manager Tim Parton’s retirement in 2022. Parton will step off his charges on multiple strategies in early 2024, making way for his longtime partner Felise Agranoff. Agranoff has comanaged this fund since year-end 2015 and has over a decade of experience as an analyst prior to that promotion. She’ll be the sole decision-maker but will get help from Daniel Bloomgarden, who was an analyst for seven years on the strategy before being named comanager in July 2022.
A long lead time and deep familiarity with the strategy’s style, holdings, and personnel should ensure a smooth transition, though it remains to be seen whether the investment process will evolve at all. Indications are that Agranoff and Parton have many commonalities in terms of their view on markets and style of analysis, but it is possible that some changes will emerge. The strategy’s existing process has deftly balanced risk management with alpha opportunities. It has one of the lowest active share marks within the mid-growth Morningstar Category, meaning that its portfolio is less differentiated from the benchmark than peers. Agranoff cites that the team has been cautious when it comes to bet sizes versus the Russell Midcap Growth Index because they’d like to avoid big stakes in fast-growing stocks with volatile share prices. However, the portfolio’s performance has still stood out from the benchmark, as evidenced by a tracking error of around 3%-4%, a reasonable figure for an active strategy. It remains to be seen how the investment process will evolve under new leadership, and whether it can be as effective using a somewhat unorthodox approach.
The fund’s I shares are holding their own through the first seven months of 2023, landing in the second quartile of peers. Long-term performance remains quite strong. While there are some doubts about its future, this fund should still offer a decent shot to outperform.