JPMorgan Global Allocation's experienced roster of portfolio managers benefit from the firm's broad resources and sharp analytical tools to shrewdly navigate markets and nimbly implement views. The strategy's institutional, R4, R5, and R6 share classes receive Morningstar Analyst Ratings of Silver, while its A, C, R2, and R3 share classes receive Bronze ratings.
This strategy exercises flexibility across currencies, regions, asset classes, and credit qualities. Duration is unconstrained, and the team may hold up to 80% of the portfolio in cash. Jeff Geller, who has been the lead portfolio manager here since the strategy's inception, and his four comanagers begin by considering the firm's capital market assumptions combined with the output of their proprietary models. The portfolio managers then determine the appropriate asset exposures that reflect their views on relative value and implement those by allocating to underlying sleeves (15 as of April 2022) resourced from across the firm’s specialist teams (global equities, high-yield bonds, and so forth). Derivatives are often used to curate portfolio characteristics at a macro level.
As of April 2022, the portfolio held 59% in equity, with over half in U.S. large-capitalization equities and most of the remainder in international or emerging-markets equities. Tighter monetary policies as well as geopolitical uncertainties have shaped the broad fixed-income exposure, which represented 20% of the portfolio and included allocations to crossover credit, high yield, and income-focused debt. Over the prior year, the team chose to cut dedicated alternatives exposure, continued to use derivatives to manage broad market moves, and limited duration when possible.
Since the strategy's first full month of performance in June 2011 through May 2022, the institutional shares generated a 5.8% annualized return that outpaced the 5.6% return of its Morningstar Global Allocation TR USD category benchmark, the 5.3% of its custom bogy (a 60% MSCI ACWI/40% Bloomberg Global Aggregate combination), as well as the 3.7% of its global allocation Morningstar Category. A more aggressive risk posture and non-U.S. exposures weighed on year-to-date performance through May 2022, but since inception, this strategy has a history of navigating rough markets more often better than not.