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JPMorgan Investor Balanced C OGBCX

Medalist Rating as of | See JPMorgan Investment Hub
  • NAV / 1-Day Return 15.78  /  −0.69 %
  • Total Assets 5.5 Bil
  • Adj. Expense Ratio
    1.460%
  • Expense Ratio 1.460%
  • Distribution Fee Level Below Average
  • Share Class Type Level Load
  • Category Moderate Allocation
  • Investment Style Large Blend
  • Credit Quality / Interest Rate Sensitivity Medium/Moderate
  • Status Open
  • TTM Yield 1.83%
  • Turnover 8%

USD | NAV as of Jul 17, 2024 | 1-Day Return as of Jul 17, 2024, 10:16 PM GMT+0

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Morningstar’s Analysis OGBCX

Medalist rating as of .

Increased conviction in this team leads to a People Pillar upgrade.

Our research team assigns Neutral ratings to strategies they’re not confident will outperform a relevant index, or most peers, over a market cycle on a risk-adjusted basis.

Increased conviction in this team leads to a People Pillar upgrade.

Analyst Stephen Margaria

Stephen Margaria

Analyst

Summary

The JPMorgan Investor funds target-risk series benefits from the firm’s deep resources, a stable and experienced management team, and solid underlying funds, supporting a People Pillar upgrade to Above Average from Average.

Ove Fladberg leads this series and the nine-person Asset Management Solutions team based in Columbus, Ohio. Fladberg has worked on these funds since 2010, taking over as lead in 2014. Joining him are four portfolio managers who average nearly a decade managing this strategy. The managers, and four supporting analysts, each have clearly defined roles around asset allocation, manager selection, and implementation.

The AMS team leverages experts from around the firm who specialize in quantitative research, qualitative research, and manager research. The team uses insights from these specialists and conducts its own research before making asset-allocation and manager selection decisions. The portfolios tap exclusively JPMorgan funds that management deems to have attractive risk/reward profiles and diversifying characteristics. The underlying funds are a highlight; each portfolio has between 50% and 78% of its assets in funds earning Bronze to Gold Morningstar Medalist Ratings as of June 2023.

The firm’s long-term capital market assumptions coupled with three- to five-year asset-class and business cycle forecasts produced by the AMS team inform the series’ strategic allocations. The long-term assumptions are updated annually, while the team revisits its own forecasts more frequently to determine any portfolio adjustments. The managers stick closely to the funds’ strategic allocations and prefer to make small, gradual updates to the portfolios.

The four funds in this series are built for investors seeking to build and preserve wealth with a focus on downside risks. And the team emphasizes risk-adjusted results (measured by Sharpe ratio) and low volatility over other metrics as a result. Over Fladberg’s tenure as lead manager through June 2023, all four funds produced Sharpe ratios that topped their respective allocation Morningstar Category averages and category index benchmarks. The Growth, Growth & Income, and Conservative Growth portfolios each landed in the best quartile of their peer groups.

Rated on Published on

This team executes a straightforward approach that provides a steady ride for investors, but there is no discernable edge compared with peers.

Analyst Stephen Margaria

Stephen Margaria

Analyst

Process

Average

It retains its Average Process Pillar rating.

The AMS team uses three forecasts to guide funds. It starts with JPMorgan’s well-regarded 10- to 15-year capital market assumptions created by its experts in New York. Then, the AMS team builds its own asset-class and business cycle forecasts with a three- to five-year time horizon. The firm’s long-term assumptions are published annually and the team meets in January to determine strategic allocations for the year. The team will update its unique forecasts more frequently throughout the year and meets monthly to determine any adjustments to the portfolios. The managers tend to stay close to the strategic allocations and make small, gradual tactical tilts.

To fill the portfolios with JPMorgan funds, the AMS team leverages firm leader Robert White’s multi-asset manager research team. White’s group provides detailed reports on JPMorgan strategies that examine philosophy, process, people, and performance. The AMS team takes this work and applies its own analysis to pick underlying managers. It looks for funds with attractive risk/reward characteristics and diversifying qualities. The team prefers to allocate smaller exposures to new funds and gain conviction before building the position further.

On the surface, this series’ allocations have historically looked more cautious than peers in their respective categories owing to their lower equity and higher fixed-income weights. The Conservative Growth, Balanced, and Growth funds all held between 4 and 9 percentage points more fixed-income exposure than the average peer as of the May 2023 portfolio. Within fixed income, the high-yield bond weights range from a careful, below-peer average of 12.7% for Conservative Growth to a pronounced above-peer average of 16.4% for Growth & Income. After historic interest-rate hikes in 2022, the team started to modestly extend duration in late 2022 and early 2023. For example, duration in the Balanced fund rose by half a year between June 2022 and June 2023.

Throughout 2023, management has maintained underweights to equity ranging from 1-percentage-point in Conservative Growth and Balanced to 6-percentage-points in Growth & Income and Growth. They pulled back on the exposure in early-2023 in response to the regional bank volatility and remain cautious on equities, focusing on companies with strong fundamentals. The team views international stocks, particularly from developed countries, as being more attractively valued than U.S. stocks. However, each portfolio’s non-U.S. stock exposure remains in line with their strategic allocations.

Rated on Published on

Increased conviction in this stable and experienced team combined with robust firm resources and a solid lineup of underlying managers lead to a People Pillar rating of Above Average upgrades from Average.

Analyst Stephen Margaria

Stephen Margaria

Analyst

People

Above Average

JPMorgan’s nine-person Asset Management Solutions team oversees these funds. Lead portfolio manager Ove Fladberg heads the group. He first became a listed manager in November 2010 and took the reins as lead in 2014. Fladberg and his four comanagers average nearly a decade on these funds. The newest manager, Luying Wei, was added in November 2022 and has worked on this team since 2003. Managers Mike Loeffler and Nick D’Eramo focus on portfolio implementation while Fladberg, Wei, and Anshul Mohan handle asset allocation and manager selection.

Management leverages the firm’s vast resources, namely, Katherine Santiago’s quantitative research team, John Bilton’s qualitative research team, and Robert White’s manager research team. Output from Santiago and Bilton’s teams helps fuel the asset-class and business cycle forecasts produced by AMS. White’s team provides valuable insights into JPMorgan’s in-house strategies so the managers can make informed lineup decisions. Mohan is responsible for fixed-income manager selection, and Wei leads equity manager selection.

This series benefits from a strong stable of underlying funds. Depending on the portfolio, between 50% and 78% of assets are invested in funds earning a Medalist Rating of Bronze, Silver, or Gold based on full analyst coverage.

Rated on Published on

Building on a solid foundation, J.P. Morgan Asset Management maintains an Above Average Parent rating.

Associate Director Alyssa Stankiewicz

Alyssa Stankiewicz

Associate Director

Parent

Above Average

J.P. Morgan is a well-resourced, diligent, and responsible steward of client assets. Investment teams are seasoned and stalwart, especially in equity and fixed income, the latter of which has successfully undergone substantial transformation in recent years. The firm offers competitive compensation that is aligned with fundholders and shows strong retention at senior levels of the organization. It demonstrates a culture of constant innovation and willingness to evolve. For example, J.P. Morgan recently expanded its investment committee process through which senior leaders review various teams and strategies, and it continues to develop proprietary portfolio management and risk oversight tools. Some funds still face high fee hurdles, but the firm has generally lowered expenses as it has grown.

The firm isn't without its complications. J.P. Morgan's product offering is extensive, and some areas need improvement. For instance, its multi-asset business has faced some challenges as a result of complex investment processes. The firm continues to build out its footprint in China, but its efforts there remain unproven. Although not every strategy is the best in its class, J.P. Morgan remains earnest in the pursuit of excellence, and investors are well-served.

Rated on Published on

These funds have generally performed well over Fladberg’s tenure as a lead manager, from January 2014 through June 2023.

Analyst Stephen Margaria

Stephen Margaria

Analyst

Performance

Annualized returns for the Balanced, Growth& Income, and Growth funds were in line or beat their respective allocation category benchmarks and average peers over that period. The Conservative Growth fund topped its moderately conservative category average by 22 basis points but slightly trailed the Morningstar Moderately Conservative Target Risk Index category benchmark. Conservative Growth and Balanced typically have lower equity exposures compared with category peers, making their relative outperformance even more impressive.

The funds showed their downside resilience in 2022’s broad market decline. The Growth, Balanced, and Conservative Growth funds all had shallower losses than their typical peers and bogies for the year. The Growth & Income fund historically holds more equity than moderate allocation category peers, so it lagged the average but outperformed its Morningstar Moderate Target Risk Index benchmark.

The AMS team prioritizes risk-adjusted results (as measured by Sharpe ratio) for investors. Three of the four funds have generated Sharpe ratios in the best quartile of their respective categories over Fladberg’s tenure as lead manager. Apart from the Growth & Income fund, a tough category fit, the Conservative Growth, Balanced, and Conservative Growth funds have managed to capture at least 10 percentage points less of the downside than peers in their respective categories over that period.

Published on

It’s critical to evaluate expenses, as they come directly out of returns.

Analyst Stephen Margaria

Stephen Margaria

Analyst

Price

Based on our assessment of the fund’s People, Process, and Parent Pillars in the context of these expenses, we don’t think this share class will be able to deliver positive alpha relative to the category benchmark index, explaining its Morningstar Medalist Rating of Neutral.

Published on

Portfolio Holdings OGBCX

  • Current Portfolio Date
  • Equity Holdings
  • Bond Holdings
  • Other Holdings
  • % Assets in Top 10 Holdings 75.1
Top 10 Holdings
% Portfolio Weight
Market Value USD
Sector

JPMorgan Core Bond R6

23.34 1.3 Bil

JPMorgan Core Plus Bond R6

11.53 619.1 Mil

JPMorgan US Equity R6

8.94 480.1 Mil

JPMorgan Large Cap Growth R6

5.60 300.5 Mil

JPMorgan International Rsrch Enh Eq ETF

5.52 296.3 Mil

JPMorgan Income R6

5.19 278.9 Mil

JPMorgan US Research Enhanced Equity R6

5.07 272.6 Mil

JPMorgan U.S. GARP Equity R6

3.57 191.7 Mil

JPMorgan Large Cap Value R6

3.22 173.1 Mil

JPMorgan Equity Income R6

3.14 168.5 Mil