JPMorgan Mid Cap Growth's proven managers give this strategy a chance to stand out, earning six share classes a Morningstar Analyst of Bronze, while the two most expensive ones receive Neutral.
This strategy casts a wide net but has skilled and experienced managers who can steer it to success. J.P. Morgan veterans Tim Parton and Felise Agranoff pilot this typically more volatile mid-growth strategy. They and their seven-member analyst team look for stocks with strong growth potential benefitting from expanding addressable markets and some form of competitive edge. Those criteria are broadly applied, ranging from steadier growers like industrial/healthcare supplier Mettler-Toledo International MTD to more volatile biotechnology stocks such as Exelixis EXEL. Despite its variety, the portfolio has historically skewed deeper into the growth section of the Morningstar Style Box than its Russell Midcap Growth benchmark. It usually displays greater exposure to the momentum factor, too, which has been a boon since 2017. However, to the team's credit, many of its best ideas were purchased long before their stock prices soared. It first purchased shares of electric auto manufacturer Tesla TSLA in 2011 and software company ServiceNow NOW in 2013, both of which returned multiples of their initial investment.
The strategy can get hurt when the market becomes concerned about future economic growth as in 2016 when fears of a weaker Chinese economy sent high-growth stocks sharply lower. With that year in mind and the fund coming off a stellar 48% return in 2020, Parton and Agranoff have switched to defense, paring back some of their bets that performed well, particularly in the fast-growing technology sector. They used that capital to add exposure to other areas of the market such as consumer, financials, and industrials. The portfolio held 120 stocks as of June 2021, up from around 100 at the end of 2019. A greater number of holdings combined with smaller stock bets rendered the portfolio more similar to the category benchmark than nearly all peers as of June. That may lead to less pronounced swings in performance so long as that dynamic holds.