JPMorgan Equity Income’s talented leader and proven approach merit a Morningstar Analyst Rating of Gold for its cheapest share classes and Silver for its most expensive one.
Lead manager Clare Hart has masterfully steered this strategy since August 2004. That she skillfully did so alone on a day-to-day basis for the better part of 15 years didn’t stop her from reinforcing her investment team along the way. In 2019, Hart added then-analyst Andrew Brandon and J.P. Morgan’s corporate governance expert David Silberman as comanagers here--and on sibling strategy JPMorgan U.S. Value VGIIX--to help shepherd the sizable asset bases her success had garnered ($83 billion here and $10 billion on that strategy as of March 2022). In both cases, the three managers work closely with two dedicated analysts trained in Hart’s time-tested investment process and draw upon broader firmwide analytical support.
Hart’s well-rounded approach balances equity income and total return. She and the team focus on competitively advantaged dividend payers with fortified balance sheets, steady cash flows, and capable managements trading at attractive prices. While prospective stocks must offer at least a 2% yield at purchase, the managers try to steer clear of firms straining to pay their dividends by closely monitoring payouts in relation to earnings. They heavily scrutinized ExxonMobil’s XOM profitability, capital allocation, and valuation before adding it to the portfolio in January 2022, for example, despite that company’s longstanding, generous dividend.
Hart’s quality-first, yield-second approach means the 85- to 110-stock portfolio tends to have outstanding quality characteristics and a decent income orientation. As of March 2022, the portfolio kept more of its assets in companies carrying a wide Morningstar Economic Moat Rating than nearly nine tenths of its large-value Morningstar Category peers. Meanwhile, its projected one-year yield of 2.7% (before fees) ranked moderately higher than the typical rival.
Hart’s deft execution has offered reliable downside protection and sparkling long-term returns that have consistently beaten the Russell 1000 Value Index on a total and risk-adjusted basis during her tenure. Closed to new investors since September 2021, this strategy’s winning formula continues to impress.