HEAD-TO-HEAD: JP Morgan versus T Rowe Price

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The JP Morgan and T Rowe funds versus their benchmark and sector. Source: FE Fundinfo. In US dollars. Note: data of the JP Morgan fund’s benchmark index, the Russell 1000 Equal Weight Technology Index, is not available on FE.

Performance

The JP Morgan fund’s huge outperformance over the technology sector is driven by US stocks, which have outperformed during the last few years, according to McDermott.

“You’d expect the JP Morgan fund to outperform when the US stock market is doing well and especially when tech companies are driving gains as they have done recently,” he said.

Turning to the T Rowe fund, he said that the product is expected to outperform when other markets, such as China, have a technology rally.

McDermott noted that the T Rowe fund is quite young, having been incepted in 2015. However, it has performed well, returning 98% since inception versus the sector average of 68%. Meanwhile, the JP Morgan fund outperformed the T Rowe product during the same period, but only slightly – at 103%.

“As US tech has led markets for much of that time, it is expected that the JP Morgan would outperform – maybe even by a greater margin, which I think is a testament more to the T Rowe Price fund that has kept up so ably.”

He added that since both have a growth investment style, the products should outperform in growth markets.

Discreet annual performance (%)

Source: FE Analytics. In US dollars.

In terms of volatility, McDermott expects the JP Morgan fund to be more volatile given it is focused purely on the US.

“US stocks are also at particularly high valuations at present, which may have an impact on volatility,” he said.

Three-year annualised volatility

Source: FE Analytics. In US dollars.

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