Fund in Focus: JPM Global Macro Opportunities

Morningstar analyst Randal Goldsmith reveals a new rating for the JP Morgan Global Macro Opportunities fund

Randal Goldsmith 8 February, 2018 | 1:32PM

 

 

Randal Goldsmith: We've just given a positive rating to the JP Morgan Global Macro Opportunities Fund. I think one of the reasons why this has done so much better than other multi strategy offerings is that the managers have been more nimble in repositioning the portfolio as market conditions have changed.

That seems to be because they sit next to each other, make a lot of decisions across the desk rather than having to wait for investment committees. As with other multi strategy approaches, the JP Morgan one begins with broad themes which the managers then implement by way of a mix of physical securities and derivative strategies using a little bit more of the former and tending to have fewer positions than the competitors.

So, for example, they have about 200 positions in the portfolio currently compared with around 2,000, is more typical and there's concentration in the top 10. The top 10 stocks account for 30% of the portfolio. So, it's important to get each stock right. And the managers have done a good job there. Last year, nine of them made money and three of the positions doubled.

Of course, when you have concentrated stock selection and you make aggressive repositioning of the portfolio, that can bring higher risk. But we take comfort from a couple of things here. One of the portfolio managers, James Elliot, has a background as a senior stock picker within JP Morgan, leading the European and Japan teams. So, the macro team can draw on a lot of support.

Additionally, the risk systems were developed by the team's senior risk manager and rolled out across the group. That means that the approach is well integrated with the rest of the business with a lot of understanding and oversight.

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Securities Mentioned in Article
Security NamePriceChange (%)Morningstar
Rating
JPM Global Macro Opportunities C Net Acc1.45 GBP0.00-
About Author

Randal Goldsmith  is a Manager Research Analyst with Morningstar.