JPMorgan Active Growth JGRO merges two compelling growth strategies into a single exchange-traded fund.
Launched in August 2022, this strategy combines JPMorgan Growth Advantage VHIAX and JPMorgan Large Cap Growth OLGAX. This ETF is a 50/50 split of those two strategies but the team trades and rebalances the portfolio every two weeks.
The ETF benefits from the experience and expertise of managers Giri Devulapally and Felise Agranoff. Devulapally has successfully led JPMorgan Large Cap Growth since mid-2005 and has more than three decades of industry experience. Agranoff is set to become the lead manager of JPMorgan Growth Advantage, taking over the reins as longtime manager Tim Parton prepares for his retirement in March 2024. Agranoff, who joined the firm in 2004, is supported by a strong team of growth investors at J.P. Morgan. Given that this ETF simply combines the portfolios of Devulapally and Agranoff, each manager focuses on their respective strategies, and the communication between the two remained unchanged following the ETF’s launch.
The underlying approaches of this strategy are related, though one stands out more than the other. Devulapally and Agranoff base their stock selection on sound fundamental research, but they differ slightly in their approaches to portfolio construction. Devulapally places a greater emphasis on price momentum, often waiting for market validation of his fundamental analysis before making significant adjustments to a stock’s weighting. While reasonable, its reactive nature can stumble in choppier markets. Agranoff has a more balanced approach with a smaller emphasis on momentum. Her portfolio benefits from market-cap flexibility and leads this ETF to hold slightly more mid-caps relative to its Russell 1000 Growth Index Morningstar Category benchmark. Considering the critical role of timing when it comes to trading around price momentum, this ETF might face a slight disadvantage because of its biweekly trading schedule. The mutual funds of Devulapally and Agranoff have no such restriction.
Still, this strategy has posted impressive results since its August 2022 inception. Through January 2024, its 17.6% annualized gain edged out the challenging Russell 1000 Growth Index’s 17.5% and handily beat the typical large-growth category peer’s 14.6%. The longer-term performance of the underlying mutual funds is also impressive, as a preference for momentum-driven trading and strong stock selection has aided results.