JPMorgan Emerging Markets Equity has a highly experienced management team, extensive resources, and a notable investment process in its favor. The U.S. mutual fund earns a Morningstar Analyst Rating of Silver across all share classes.
Leon Eidelman was formally recognized as this strategy's lead manager in July 2016, though he has been the primary decision-maker since January 2015, when he was promoted to comanager alongside well-regarded former lead manager Austin Forey. Forey is head of the fundamental emerging markets team at JPM and remains a comanager here.
There have been three new additions (Weiying Dong, Sarah Dodson, and Komal Dhillon) to the fundamental emerging-markets team in 2021-22, bringing the overall number to seven. Dodson is the most relevant for this strategy as she will work directly with Eidelman, supporting him with analyst interaction and marketing.
Management is further supported by the 92-member emerging-markets and Asia-Pacific equities team. The team’s research analysts provide ample research support based on a well-structured and repeatable framework, ensuring the breadth and quality of coverage.
The process follows the same quality/growth bias we have come to expect from strategies managed by the EMAP team. The vast majority of assets are allocated to premium and quality names (92% as of March 2023), which operate in attractive industries with limited external risks, possessing strong balance sheets and solid cash-flow generation. Given the focus on quality growth here, we would expect the strategy to perform well in markets driven by earnings and fundamentals.
The three-year (through 28 Feb 2023) underperformance against the MSCI Emerging Markets Index is mainly attributable to the strategy's growth bias being out of favour, as well as structural underweightings in cyclical areas such as materials and energy. There have also been some stock-selection issues, such as Sea Ltd, which the manager exited after reevaluating its growth prospects. Nonetheless, the strategy’s long-term track record remains strong over Eidelman’s tenure, comfortably outperforming both the index and peers.
The strategy’s total AUM has declined to $32 billion at January 2023, from $40 billion a year prior, although it remains sold-closed.