4 J.P. Morgan Mutual Funds to Navigate the Current Volatility
Wall Street has faced heightened volatility in September as oil prices climbed above $100 per barrel, the 10-year Treasury yield approached 5% and expectations for Federal Reserve policy shifted. These developments have increased uncertainty around inflation, economic growth and corporate earnings.
J.P. Morgan Asset Management provides an example of how a large fund house is navigating the changing environment. This global investment giant currently oversees $4.3 trillion in assets under management (AUM). Its investment teams have adjusted allocations as valuations, interest rates and macroeconomic risks evolved. In a September investor update, the firm said it had modestly reduced equity exposure and increased cash following the August market rebound, while retaining an overall equity overweight.
The firm's diversified platform spans equity, fixed-income and multi-asset strategies, giving investors different ways to manage exposure as market conditions change. However, its funds remain subject to the same pressures affecting the broader market. Rising yields can weigh on both stocks and bonds, while elevated energy prices can add to inflation concerns and complicate the Federal Reserve's policy outlook.
Mutual funds, in general, reduce transaction costs and diversify portfolios without an array of commission charges that are mostly associated with stock purchases (read more: Mutual Funds: Advantages, Disadvantages, and How They Make Investors Money).
We have thus selected four such mutual funds that boast a Zacks Mutual Fund Rank #1 (Strong Buy) or #2 (Buy), have positive three-year and five-year annualized returns, have minimum initial investments within $5000 and carry a low expense ratio.
JPMorgan US Research Enhanced Equity JDEAX primarily invests in common stocks of U.S. companies, particularly large- and mid-cap firms within the S&P 500 Index, while retaining flexibility to invest beyond the index.
Raffaele Zingone has been a lead manager of JDEAX since 2002. Three top holdings for JDEAX are Nvidia (7.8%), Apple (6.3%) and Microsoft (4.7%).
JDEAX’s 3-year and 5-year annualized returns are 19.5% and12.3%, respectively, and its net expense ratio is 0.60%. JDEAX has a Zacks Mutual Fund Rank #1. To see how this fund performed compared to its category, and other 1 and 2 Ranked Mutual Funds, please click here.
JPMorgan US Sustainable Leaders JICAX primarily invests in large- and mid-cap U.S. stocks that meet the adviser’s sustainability criteria, while using futures to manage index exposure, liquidity and transaction costs.
David Small has been the lead manager of JICAX since 2024. Three top holdings for JICAX are Nvidia (8.2%), Amazon (5.7%) and Microsoft (5.4%).
JICAX’s 3-year and 5-year annualized returns are 18.5% and 10.1%, respectively, and its net expense ratio is 0.65%. JICAX has a Zacks Mutual Fund Rank #2.
JPMorgan Emerging Markets Equity JHUKX primarily invests in equity securities and related instruments tied to emerging markets, with investments denominated in U.S. dollars, major reserve currencies and local currencies.
Austin Forey has been the lead manager of JHUKX since 2005. Three top holdings for JHUKX are Taiwan Semiconductor (12.2%), SK Hynix (8.5%) and Samsung Electronics (5.2%).
JHUKX’s 3-year and 5-year annualized returns are 24.4% and 5.8%, respectively, and its net expense ratio is 0.99%. JHUKX has a Zacks Mutual Fund Rank #2.
JPMorgan Small Cap Value JSVRX primarily invests in small-cap companies using a value-oriented approach, focusing on common stocks and REITs while targeting businesses within the Russell 2000 Value Index universe.
Robert A. Ippolito has been the lead manager of JSVRX since 2022. Three top holdings for JSVRX are New Jersey Resources (1.2%), Southwest Gas (0.8%) and Banc of California (0.7%).
JSVRX’s 3-year and 5-year annualized returns are 17.3% and 8.8%, respectively, and its net expense ratio is 0.84%. JSVRX has a Zacks Mutual Fund Rank #2.
Bottom Line
J.P. Morgan's experience underscores the challenges facing active fund managers in the current environment. Rather than being insulated from volatility, its portfolios must continually respond to shifting valuations, interest rates, geopolitical risks and changes in investor sentiment.
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This article originally published on Zacks Investment Research (zacks.com).
