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JPMorgan SmartRetirement® 2040 I SMTSX

Analyst rating as of
NAV / 1-Day Return
19.13  /  1.19 %
Total Assets
4.1 Bil
Adj. Expense Ratio
Expense Ratio
Fee Level
Longest Manager Tenure
14.41 years
Target-Date 2040
Investment Style
Large Blend
Credit Quality / Interest Rate Sensitivity
Medium / Moderate
TTM Yield

Morningstar’s Fund Analysis SMTSX

Analyst rating as of .

A solid series in many respects, but our confidence has taken a hit.

Our analysts assign Neutral ratings to strategies they’re not confident will outperform a relevant index, or most peers, over a market cycle.

A solid series in many respects, but our confidence has taken a hit.

Senior Analyst



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.


| Above Average |

J.P. Morgan's dive into retirement income is steeped in research that takes real participants into account. The series boasts a clear edge on this front. However, our confidence in the team’s tactical allocation approach has moderated to a degree, meriting a downgrade of the series’ Process rating from High to Above Average.

The incorporation of SmartSpending into the glide path marks the most significant adjustment to this series since its inception, but the team has a history of thoughtful changes. Such adjustments are rooted in the pioneering participant research the team has conducted all along. The team’s crucial partnerships with outside parties such as Chase retail bank have spurred insights into participant behavior, including its finding that retirees’ spending is most volatile during early years and tapers off later on. The target-date franchise recently adapted its post-retirement allocations to account for this insight, aiming to fund investors’ withdrawals until age 100.

The team also had a long 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 the 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.


| Above Average |

J.P. Morgan’s target-date team has shed some depth, but still boasts experienced personnel. It earns an Above Average People Pillar rating.

Dan Oldroyd took the reins of the team in mid-2020 when longtime lead manager Anne Lester retired. Lester drove much of the team’s research agenda, and SmartSpending was her creation. Oldroyd had served as Lester’s comanager nearly since the series’ 2006 launch and drove the integration of SmartSpending into the series’ glide path after her departure. And he has veterans to rely on in regard to retirement research, tactical allocation calls, and manager selection.

That said, the team has seen enough key departures to raise doubts as to whether it is still a top-tier group in an increasingly competitive industry. Two portfolio managers, Michael Schoenhaut and Eric Bernbaum, moved to the firm’s target risk group in 2019, and Katherine Roy, a key person within the retirement research group, left in 2022 to join another firm. That said, Ove Fladberg, a veteran of the firm’s target-risk group, was added as a portfolio manager in 2022 and Roy’s role should be filled soon.

Oldroyd and comanager Silvia Trillo also reap the benefits of J.P. Morgan’s standout multi-asset solutions group, numbering more than 100, and J.P. Morgan’s wide array of building blocks. (The team can choose from more than 100 mutual funds and exchange-traded funds.) Fairly strong funds fill the resulting lineup: The mutual fund series of SmartRetirement holds 43% of its assets in Morningstar Medalists as of June 2022.


| Above Average |

J.P. Morgan Asset Management’s strong investment culture, which shows through its long-tenured, well-aligned portfolio managers and deep analytical resources, supports a renewed Above Average Parent rating.

Across asset classes and regions, the firm's diverse lineup features many Morningstar Medalists, such as its highly regarded U.S. equity income strategy that’s available globally. There's been some turnover in the multi-asset team recently, but it remains deeply resourced and experienced. Manager retention and tenure rates, and degree of alignment for U.S. mutual funds compare favorably among the competition. Managers' compensation emphasizes fund ownership over stock ownership, which is distinctive for a public company.

The firm continues to streamline its lineup and integrate its resources further. For instance, in late 2019, the multi-asset solutions division combined with the passive capabilities. The firm hasn’t launched trendy offerings as it’s mostly expanded its passive business lately, but acquisition-related redundancies and more hazardous launches in the past weigh on its success ratio, which measures the percentage of funds that have both survived and outperformed peers. Fees are regularly reviewed downward globally; they're relatively cheaper in the U.S. than abroad. Also, the firm is building its ESG capabilities and supports distinctive initiatives on diversity.



It’s critical to evaluate expenses, as they come directly out of returns. The share class on this report levies a fee that ranks in its Morningstar category’s middle quintile. That’s not great, and based on our assessment of the fund’s People, Process and Parent pillars in the context of these fees, we don’t think this share class will be able to deliver positive alpha relative to the category benchmark index, explaining its Morningstar Analyst Rating of Neutral.



This series has hit an extended rough patch that has diminished its record, but it still has outperformed peers over the very long term. Over the 15-year period through August 2022, every vintage of the I share class ranks in the top half of its Morningstar Category on total return and Sharpe ratio (a measure of risk-adjusted return). However, just half of the vintages have bested their respective S&P Target Indexes on those measures during the period. And the series’ record is just average or worse versus peers over periods of 10 years or less.

Tactical calls are difficult to get right on a consistent basis, and even the sharpest allocators suffer bouts of underperformance. J.P. Morgan is no exception, and its tactical signals struggled throughout 2018, 2019, 2021, and the first half of 2022. Over the trailing five years, each vintage’s total returns trail more than 60% of each fund’s respective peer group on average.

Over longer periods, attribution from J.P. Morgan shows tactical decisions have delivered mixed results—they contributed 0.04-0.12 percentage points of return annually over the past decade through June 2022, but were neutral dating back to the series’ 2006 inception. Manager selection was roughly neutral over those periods.



In March 2022, J.P. Morgan merged SmartSpending 2020 JTQLX into JPMorgan SmartRetirement Blend 2020 JSSRX and started investing all four 2020 vintages across series according to the SmartSpending methodology. The team now calibrates allocations throughout the year, managing to a short-term volatility target that resets annually to fund investors’ spending in retirement. In the long run, the team expects volatility to land close to a 40% equity/60% bond custom index.

For investors who retired around 2015, JPMorgan SmartSpending 2015 JTQDX rebranded as JPMorgan SmartRetirement Blend 2015. The legacy Income strategies for all four series remains live, but participants have to opt in.

In 2021, lead manager Dan Oldroyd found that suppressed wage growth and increased spending rates have depressed retirement savings, which led him to boost equity exposure by 3 percentage points to 94% for young investors. The glide path’s landing point also rose by 7.5 percentage points to 40% in stocks, modestly flattening the glide path overall.

The team seeks to add additional value through careful manager selection and an established tactical-allocation process. With about $128 billion in assets, even after the market decline, the target-date franchise isn’t as nimble now, which could limit the team’s ability to implement its tactical views.