Combining active and passive
Passive management has its advantages…
Passive management is often seen as an economical way to get market exposure. The clear advantage is that it presents the opportunity to enjoy diversification1 derived from investing in a pool of assets by resembling holdings of a benchmark. Nonetheless, indexing also inherently translates into an inability to deliver any return beyond the benchmark.
…combining active and passive could be even better
What if there was a way to potentially outperform the benchmark after fees, and to achieve this with a risk profile very similar to the benchmark?
Why an enhanced indexing approach?
The chart on the right compares efficient frontiers2 using solely index returns for both stocks and bonds (shown in blue) and the corresponding efficient frontiers when JPMorgan Global Research Enhanced Index Equity Fund (GREI) substituted for their respective index funds (shown in orange).
In each instance, the inclusion of GREI over the respective index funds raises the aggregate return with relatively smaller corresponding increase in the aggregate risk. We believe this presents an attractive risk-adjusted return opportunity.
Raising the efficient frontier with GREI versus passive equity indexes3
Why JPMorgan Global Research Enhanced Index Equity Fund?
The JPMorgan Global Research Enhanced Index Equity Fund (GREI) is a global equity solution with attractive fees, aiming to maximise risk-adjusted returns through active, bottom-up stock selection4.
The Fund strives4 to deliver positive alpha at low active risk by optimising the stock-specific ideas of our team of about 80 fundamental research analysts5. It is part of the global REI strategies J.P. Morgan Asset Management has been managing in the past 30-plus years by exploiting stock specific insights on a risk and transaction cost aware basis.
ACING YOUR PORTFOLIO
RESEARCH IS AT THE CORE OF EVERYTHING WE DO
Stock selection is one of the key drivers of excess returns. Leveraging fundamental insights of about 805 equity analysts globally, we translate this advantage into a robust valuation model, which further contributes to a portfolio that maximises our convictions.
Uncompensated risk is managed using a portfolio construction framework which limits stock-specific, sector, region, style and country risks as well as trading costs.
- About 80 fundamental research analysts5 globally
- 2,500+ securities names5 covered
- Analysts forecast normalised and sustainable earnings
- Proprietary earnings and cash flow estimates
- Stocks quintile ranking based on fundamentals
- Common language and valuation concept across sectors and analysts
- Experienced portfolio management team drives portfolio construction
- Maximise stock specific ideas within risk control bands
- Manage uncompensated risks (beta, sector, style)
MANAGED WITHIN AN ESG FRAMEWORK
Environmental, social and governance (ESG) factors are of growing importance to investors and can have significant implications for long-term performance. Systematic and explicit consideration of these factors is built into the strategy’s investment process.
Stewards of the Environment
Equitable approach to Social capital
Governance that fosters sustainability and long-term value creation
OUR GLOBAL EQUITIES CAPABILITIES10
Assets under management
Equity investment professionals with 13+ average years of experience
Equity research analysts with 10+ average years of experience
Global research budget