HEAD-TO-HEAD: JP Morgan versus Neuberger Berman

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Performance

The JP Morgan US Value Fund’s three-year cumulative performance lags both its sector average and its benchmark Russell 1000 Value index. It has generated only 4.88%, compared with 28.35% by its peers and 5.94% by its benchmark, according to FE Fundinfo data.

It struggled in 2018’s down-market, yet also underperformed in 2017 when US equities were strong.

However, its longer-term relative returns are better, according to Poole, which gives him confidence about the fund’s future performance.

Nevertheless, an overweight in the utilities sector and a few unfortunate stock-picks in the materials and healthcare sectors have hurt relative recent performance too, and the fund was down 16.39% in the first six months of the year.

The Neuberger Berman fund has a better three-year cumulative return than the JP Morgan product, generating 14.04%, according to FE Fundinfo.

However, it has underperformed its peer average and has lagged its benchmark S&P 500 index – which is up 38.66% over three years — by a large margin.

Like the JP Morgan fund, its focus on value stocks when growth companies have been in vogue, has affected relative performance.

“Yet, the Neuberger Berman fund tends to do well in bull markets because its flexibility to buy small- and mid-cap stocks typically boost performance in cyclical upturns,” said Poole.

Unfortunately, over-exposure to the consumer sector and under-exposure to the technology and healthcare sectors have had a negative impact on the fund this year, according to Poole.

The fund fell 11.31% in the first six months of this year, which is less of a decline than the JP Morgan fund, but compares poorly with its S&P 500 benchmark (-3.08%) and its peers (-2.93%).

Discrete calendar year performance

Source: FE Fundinfo. Annual returns in US dollars. *1 Jan 2020 – 30 Jun 2020

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