HEAD-TO-HEAD: BNY Mellon vs JP Morgan

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Source: FE Fundinfo. Three-year cumulative returns in US dollars

Performance

The three-year cumulative returns of the two funds are similar, with the JP Morgan product slightly outperforming with 38.44% return compared with 35.09% by the BNY Mellon product, according to FE Fundinfo data.

Neither fund has managed to outperform their index over the period, but given the more defensive nature of equity income funds and the fact that two out of the last three years have enjoyed bull markets, their results are good, according to McDermott.

However, the JP Morgan fund’s annualised volatility (10.91%) over the period is higher than volatility of the BNY Mellon fund (9.82%), according to FE Fundinfo.

The JP Morgan fund did especially well during market upturns in the 2019 and 2017 calendar years, while the BNY Mellon fund was especially resilient during downturns in 2018 and, most impressively in 2015, when the average of funds in its sector posted a negative return.

“You would expect the BNY Mellon fund to underperform in strongly rising markets, or when the US leads — as it did in 2019,” McDermott.

“In markets where investors are worried about fundamentals – that is, in falling markets – it should do better than the JP Morgan product,” he added.

The JP Morgan Global Dividend fund had a change in management team within the last two years, and it has outperformed the sector average during that period.Both funds generated similar annualised income yields of around 2.8% last year. Although far less than the 4%-plus yields promised by some fixed maturity products which were prepared to move down the credit curve, the dividend fund yields were satisfactory compared with investment grade bonds. 

Discrete annual performance

 Source:  FE Fundinfo. Annual returns in US dollars.

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