In September 2021, J.P. Morgan announced plans to weave the methodology of its JPMorgan SmartSpending mutual fund series into post-retirement vintages of four target-date series under Morningstar coverage, including JPMorgan SmartRetirement Blend, by March 18, 2022. The move cements J. P. Morgan’s status as a trailblazer in the target-date space, and we reaffirm a Morningstar Analyst Rating of Gold on the cheapest R6 share class and Silver through Neutral on pricier share classes.
J.P. Morgan 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 managed by the same team as SmartRetirement, but unlike the current Income strategy, SmartSpending 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 target-date team cut its teeth researching the behavior of plan participants, and we remain confident that it can execute.
Our conviction stems in part from this team’s experience. Lead manager Dan Oldroyd’s history with SmartRetirement dates back to 2006, and he served as deputy to former lead skipper Anne Lester from this series’ 2012 inception through May 2020. Despite that, it was still a blow when Lester retired. Her innovative research raised the bar for target-date managers, and the SmartSpending series was her brainchild. The integration of SmartSpending demonstrates that Oldroyd will not shy away from fresh ideas, but it remains to be seen whether he can stomach the additional responsibilities he has picked up in recent years. His second-in-command, Silvia Trillo, has held her role only since 2019; she has proved capable, but the pair has not worked together for long.
Simultaneously—but independently—J.P. Morgan also shared that it will lift the stock allocation along the glide path by up to 7.5 percentage points, following the robust, team-based investing process in place here since inception. J.P. Morgan’s glide path will still target a steady equity/bond split past the retirement date.