JPMorgan US Research Enhanced Equity's analyst team has seen some turnover, and its benchmark-sensitive approach doesn't stand out in a competitive space. The strategy receives a Morningstar Analyst Rating of Neutral across all share classes.
An experienced lead manager is at the helm, but J.P. Morgan's central analyst team drives this fund’s picks. Longtime comanager Raffaele Zingone became the lead here in late 2016. He's spent his entire three-decade career at J.P. Morgan. Zingone is responsible for portfolio construction and leverages views from the firm's equity research group. The approximately 25-person team averages 20 years of industry experience, but continued analyst turnover is worth watching. Over the trailing 12 months through August, the team had three analyst departures, including two consumer analysts. Listed manager Timothy Snyder does not play an active role in the strategy. The same was true for former comanager Steven Lee, who left the strategy in November 2020 but remains on his other charges at the firm.
Zingone's approach is tightly constrained. He uses a model that considers analysts' valuations, firm-specific growth catalysts, and confidence in long-term trends to highlight the most attractive firms. With the goal of offering fundholders market exposure similar to the S&P 500, Zingone then sticks to tight constraints to build the portfolio. He keeps the strategy's tracking-error target to 1.5% versus the benchmark and the portfolio's super sectors within 0.2 percentage points of the bogy. Individual positions cannot deviate more than 1 percentage point. These narrow constraints mean that stock-picking drives returns, but it can also limit the portfolio's distinctiveness; as of July 2021, the portfolio's active share (a measure of differentiation in names and weightings from a benchmark) was just 36%.
Fees here are attractive versus actively managed peers, but they're pricey next to the passive alternatives that this strategy's structure resembles.