Some Stock Picks Held OLGAX Back in YTD 2015

The JPMorgan Large Cap Growth Fund (OLGAX) emerged as the second best performer for November. However, it slipped a bit to the fourth spot in the YTD period.

David Ashworth - Author

Dec. 18 2015, Updated 2:06 p.m. ET

Performance evaluation

The JPMorgan Large Cap Growth Fund – Class A (OLGAX) rose 1.2% in November 2015 from the previous month. In the three-month and six-month periods ended November 30, the fund has risen 3.9% and 0.6%, respectively. In the one-year period, it has returned 8.0%. From the end of November until December 15, the fund is down 5.5%. In the YTD (year-to-date) period, the one that we will analyze, the fund is up by 8.4%.

The JPMorgan Large Cap Growth Fund (OLGAX) emerged as the second-best performer for November. However, it slipped a bit to the fourth spot in the YTD period. Let’s look at what contributed to this above-average performance by the fund.

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Portfolio composition and contribution to returns

OLGAX has witnessed several market cycles, having been launched in February 1994. The latest complete portfolio available for the fund is as of October 2015. We will use that portfolio as our base and consider valuation changes as they stand as of the end of November 2015 for our analysis. All portfolio percentages refer to their weights according to changes in valuation from October to November.

The information technology sector, which forms a little less than one-third of the fund’s assets, was the biggest contributor to the fund’s returns for the YTD period ended November 2015. It was boosted by Facebook (FB), Class C shares of Alphabet Inc. (GOOG) and Class A shares of Visa (V). However, Micron Technology (MU) and Baidu (BIDU) reduced the sector’s positive contribution.

The consumer discretionary sector was just slightly behind information technology in terms of the level of positive contribution for the period. (AMZN) was by far the highest contributor from the sector, with The Home Depot (HD) and Netflix (NFLX) contributing as well. The sector had its detractors also. Michael Kors Holdings Limited (KORS) and 21st Century Fox (FOXA) disallowed further positive contribution from the sector.

Even with all headwinds, stocks picks from the energy sector emerged as positive contributors, primarily driven by Marathon Oil Corporation (MRO) and Cabot Oil & Gas Corporation (COG).

Reasons for above-average performance

The fund’s top picks in sectors with the highest exposure have worked for the fund in YTD 2015 until November. Generally challenging sectors like energy and materials have also contributed due to informed stock picking.

However, a few stock picks from each sector dragged on the fund, which was the primary reason for subdued returns.

In the next article, we’ll look at the ClearBridge Aggressive Growth Fund – Class A (SHRAX).


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