An improved view of JPMorgan Growth Advantage’s best-ideas framework leads to a Morningstar Analyst Rating upgrade for cheaper share classes to Silver from Bronze, while more expensive ones go to Bronze from Neutral.
This all-cap strategy compiles the highest-conviction ideas from J.P. Morgan's growth equity teams, giving it a better platform to stand out. Lead manager Tim Parton and comanager Felise Agranoff, who also run Bronze-rated JPMorgan Mid Cap Growth HLGEX together, oversee a group effort. They work closely with fellow managers Giri Devulapally of Bronze-rated JPMorgan Large Cap Growth SEEGX and Eytan Shapiro of JPMorgan Small Cap Growth OGGFX. Parton, Devulapally, and Shapiro have led their charges since 2004, posting strong results relative to benchmarks and peers. The strategies are made from the same cloth, typically displaying greater exposure to the growth and momentum factors than their respective benchmarks, along with higher performance volatility.
Parton typically invests in 80 to 90 of the combined teams’ most promising stocks--a more concentrated approach than the underlying strategies employ. The intuition behind the design has worked: The strategy has consistently outperformed the Russell 3000 Growth Index and a custom benchmark comprising the component strategies weighted by their representation in the portfolio.
The strategy has historically invested more heavily in small- and mid-cap stocks than most large-growth Morningstar Category peers. That flexibility allowed the strategy to capture some of its best ideas early on in their evolutions such as Tesla TSLA, ServiceNow NOW, and Generac GNRC. Now at $22 billion in assets, small caps play a lesser role given their shallower liquidity, though mid-caps remain a key area of differentiation. While capacity remains a watch point here, it's encouraging that JPMorgan Small Cap Growth closed to new investors in January 2021, which helps preserve this fund's ability to own some of the same stocks, even if at small weightings.
All told, this strategy has the framework to get the best of out J.P. Morgan's growth research teams.