HEAD-TO-HEAD: JP Morgan versus Jupiter

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Source: FE. Fund NAVs and indices in euros. The three-year performance of the JP Morgan and Jupiter funds versus their benchmark indices.

Performance

Since the JP Morgan fund aims to outperform any market environment, Kandlur describes the product as an “all-weather fund”.

“It’s expected to outperform in most market environments. But what tends to happen is that since there is a focus on momentum, if there’s a sharp sell-off, it won’t work well,” she said, pointing to 2018 performance.

In addition, given the value and quality factors that are in the quant model, the fund is expected to lag the index when the market favours the more expensive and lower quality stocks.

However, the fund tends to outperform its benchmark when the market is trending upwards, according to Kandlur.

Annual discrete calendar performance (%)

Source: FE Analytics

Turning to the Jupiter fund, because of its strong growth bias, the fund is expected to underperform its benchmark index when value stocks are the trend, such as in 2016, Kandlur said.

However, the opposite is true during growth markets. In 2017, the market favoured growth stocks and the fund beat its benchmark.

In terms of volatility, Kandlur expects the Jupiter fund to be more volatile because it is highly concentrated.

Volatility (three-year annualised)*

Source: FE Analytics

*21 Nov 2015 – 16 Nov 2018

“But what is interesting is that the Jupiter fund has actually shown historically that in down markets, it tends to protect better despite having a concentrated portfolio, such as in 2008 and this year,” she said.

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