JPMorgan Value Advantage remains a decent option at the right price thanks to an experienced manager and the backing of a strong firm.
Longtime manager Jonathan Simon has piloted this flexible value offering for nearly 20 years and brings 40 years of experience, making him one of the most tenured managers in the large-value Morningstar Category. While he likely isn’t far from retirement, he hasn't given an indication that it is imminent. Comanager Graham Spence is Simon's protégé and is a potential successor. Simon's roots in mid-cap investing loom large for this all-cap strategy, which typically keeps 20% to 40% of assets in the cohort. Simon comanages JPMorgan Mid Cap Value FLMVX and can pull ideas from that fund, which has a dedicated analyst team. Simon also leans on J.P. Morgan's deep core analyst group, which has helped power strong performance across most of the firm's large-cap lineup.
At his core, Simon is a quality-oriented investor who anchors to companies with stronger financials than peers and better competitive positions. However, he has made exceptions on occasion to pursue companies undergoing distress or with higher debt loads. He's had mixed success with such ventures, and they contributed to a volatility spike from 2018-20. Simon has limited such trades in recent years, though.
Simon's sector preferences are a notable feature of the strategy. For instance, he has long favored financials stocks because of their relatively cheap valuations since the financial crisis. Conversely, he tends to underweight tech stocks, which he partially attributes to lingering hesitancies stemming from the dot-com bubble, and a general aversion to paying up for growth far into the future.
Simon is a long-term investor but will take advantage of volatility if he sees an opportunity. For instance, he reallocated his financials exposure during March 2023's regional banking crisis. He picked up shares of banks he believed had durable deposit bases with relatively lower asset duration, such as Regions Financial RF, while trimming shares of those deemed to have greater risk.
This offering shouldn't stray too far from the composition of the Russell 3000 Value prospectus benchmark, but it has enough differentiation and research talent behind it to give it a shot at outperforming.