The JPMorgan SmartRetirement mutual fund series boasts clear advantages with a well-resourced target-date team and thoughtful retirement research that impacts the series' glide path, such as the recent integration of its SmartSpending retirement-income approach. But an extended period of stumbles on the tactical allocation front amid market volatility tempers our confidence to a degree, driving a downgrade of some share classes' Morningstar Analyst Ratings. The two cheapest share classes earn Bronze ratings while the other six earn Neutrals.
Over the past year, J.P. Morgan has woven the methodology of its JPMorgan SmartSpending mutual fund series into post-retirement vintages of four target-date series under Morningstar coverage. The move cements J.P. Morgan's status as a research leader in the target-date space. The firm devised SmartSpending to help investors fund discretionary spending throughout retirement by dynamically orbiting around the long-term risk profile of a blended 40%/60% MSCI ACWI/Bloomberg Aggregate Index. It is geared for the investor to sell off shares of the investment annually. This approach requires active involvement from retirement plan participants to draw down their savings--no given in the set-it-and-forget-it world of target-date funds--but the team cut its teeth researching the behavior of plan participants, and we remain confident that it can execute.
Veterans such as lead manager Dan Oldroyd head this effort. He served as deputy to former lead skipper Anne Lester from 2010 through May 2020. He's still backed by experienced personnel in the primary areas of focus--retirement research, tactical allocation, and manager selection. That said, Lester’s departure was a significant blow, and there has been other turnover as well.
The team also had a previous history of making savvy tactical allocation calls. However, the team's calls detracted value in the market volatility of 2018, 2019, 2021, and the first half of 2022. At times the series has missed out on equity rebounds by being too conservative. But it was also overweight stocks coming into 2022, which hurt in the early stages of this year's bear market. The team hasn’t necessarily lost its ability to make correct calls--it added value in 2020's up-and-down market—but these issues bear watching.