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This Fund Uses Options to Tamp Down Equity Risk

Investors seeking a smoother ride from the stock market, but leery of bonds as ballast, should consider Bronze-rated JP Morgan Hedged Equity.


Tayfun Icten: Bronze-rated JP Morgan Hedged Equity fund provides a smoother ride for equity investors by combining a long equity exposure with an option overlay. 

The fund gives up some of the equity upside, but also mitigates the downside risk. On a three-year basis, it produced a 7% annualized return with 6% standard deviation. In that stretch, it generated better risk-adjusted returns than the S&P 500 index, and ranked among the top three funds in its Option Writing category in terms of absolute performance.

Tayfun Icten does not own (actual or beneficial) shares in any of the securities mentioned above. Find out about Morningstar’s editorial policies.