Equities for Tough Times
Funds for volatile markets should offer cushion
Consider three equity solutions designed to deliver upside participation with lower volatility on the downside.
Which equity funds can offer a smoother ride through volatile markets?Those that keep investors invested for the long run – participating in gains while the market rises, but cushioning losses when the market falls. Compare the up and down capture ratios for these three funds to find an appropriate fit.
View standardized performance and fees for:
Aiming to mitigate losses on the downside while participating in gains on the upside
Morningstar Rating | Option-based Category
Morningstar Rating | Large Blend category
Morningstar Rating | Large Value Category
Investing involves risk, including possible loss of principal. Investment returns and principal value of an investment will fluctuate so that an investor’s shares, when sold or redeemed, may be worth more or less than their original cost. There is no guarantee the Funds will meet their investment objectives. Diversification may not protect against market loss.
Hedged Equity Fund: Utilizing a strategy with a diversified equity portfolio and derivatives, with a Put/Spread Collar options overlay, may not provide greater market protection than other equity investments nor reduce volatility to the desired extent, as unusual market conditions or the lack of a ready option market could result in losses. Derivatives expose the Fund to risks of mispricing or improper valuation and the Fund may not realize intended benefits due to underperformance. When used for hedging, the change in value of a derivative may not correlate as expected with the risk being hedged.
JPMorgan Diversified Return U.S. Equity ETF (JPUS): ETF shares are bought and sold throughout the day on an exchange at market price (not NAV) through a brokerage account, and are not individually redeemed from the fund. Shares may only be redeemed directly from a fund by Authorized Participants, in very large creation/redemption units. For all products, brokerage commissions will reduce returns. The Fund uses derivatives, which may be riskier than other types of investments and may increase the volatility of a fund. The Fund may not track the return of its underlying index for a number of reasons, such as operating expenses incurred by a fund that are not applicable to an index, and the time difference between calculating the value of an index and the net asset value of a fund.
Equity Income Fund: The prices of equity securities are sensitive to a wide range of factors, from economic to company-specific news, and can fluctuate rapidly and unpredictably, causing an investment to decrease in value. There is no guarantee that companies will declare, continue to pay or increase dividends.
Index returns are for illustrative purposes only. Mutual funds and ETFs have fees that reduce their performance; indexes do not. You cannot invest directly in an index.
The Russell 1000 Index is an unmanaged index measuring the performance of the 1,000 largest companies (on the basis of capitalization) in the Russell 3000 Index.
The Russell 1000 Value Index is an unmanaged index measuring the performance of those Russell 1000 companies with lower price-to-book ratios and lower forecasted growth values.
The S&P 500 Index is an unmanaged index generally representative of the performance of large companies in the U.S. stock market. Index levels are in total return USD.
The ICE BofAML 3-Month US Treasury Bill Index is comprised of a single issue purchased at the beginning of the month and held for a full month. The index is rebalanced monthly and the issue selected is the outstanding Treasury Bill that matures closest to, but not beyond three months from the rebalancing date.
"Russell®" is a trade mark of Frank Russell Company ("FTSE Russell"). All rights in the JP Morgan Diversified Factor US Equity Index (the "Index") vest in J.P. Morgan or its licensors. Neither FTSE Russell nor its licensors accept any liability for any errors or omissions in the Index or underlying data and no party may rely on any Index or underlying data contained in this communication. No use or distribution of the Index is permitted without J.P. Morgan's express written consent. FTSE Russell does not promote, sponsor or endorse the content of this communication.
The Morningstar Rating™ for funds, or "star rating", is calculated for managed products (including mutual funds, variable annuity and variable life subaccounts, exchange-traded funds, closed-end funds, and separate accounts) with at least a three-year history. Exchange traded funds and open-ended mutual funds are considered a single population for comparative purposes. It is calculated based on a Morningstar Risk-Adjusted Return measure that accounts for variation in a managed product's monthly excess performance, placing more emphasis on downward variations and rewarding consistent performance. The top 10% of products in each product category receive 5 stars, the next 22.5% receive 4 stars, the next 35% receive 3 stars, the next 22.5% receive 2 stars, and the bottom 10% receive 1 star. The Overall Morningstar Rating for a managed product is derived from a weighted average of the performance figures associated with its three-, five-, and 10-year (if applicable) Morningstar Rating metrics. The weights are: 100% three-year rating for 36-59 months of total returns, 60% five-year rating/40% three-year rating for 60-119 months of total returns, and 50% 10- year rating/30% five-year rating/20% three-year rating for 120 or more months of total returns. While the 10-year overall star rating formula seems to give the most weight to the 10-year period, the most recent three-year period actually has the greatest impact because it is included in all three rating periods. Rankings do not take sales loads into account.
Lipper classification averages are calculated with all eligible share classes for each eligible classification. Lipper does not guarantee the accuracy or reliability of its data. Use this data at your own risk, without any warranty, condition, or guarantee from Lipper. This is not an offer to buy or sell securities. For details, go to lipperweb.com. The performance of the Lipper Indices includes expenses associated with a mutual fund, such as investment management fees. These expenses are not identical to the expenses charged by the Fund.