Select Stocks and Industrials Held Back OLGAX in 2015


Jan. 21 2016, Updated 7:18 p.m. ET

Performance evaluation

The JPMorgan Large Cap Growth Fund – Class A (OLGAX) fell 1.0% in December 2015 from a month ago. In the three-month and six-month periods ended December 31, the fund has risen 7.3% and 0.6%, respectively. In the one-year period, the fund is up 7.3%. Meanwhile, from the end of December until January 20, the fund is down 11.1%.

The fund has been an above-average performer in 2015, ranking fourth among the 11 funds in this review. Let’s look at what has contributed to the fund’s above-average performance.

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Portfolio composition and contribution to returns

OLGAX has witnessed several market cycles since its inception in February 1994. The latest complete portfolio available for the fund is as of November 2015. Thus, we will take that portfolio as our base and consider valuation changes as they stand at the end of December 2015 for our analysis. All portfolio percentages mentioned from here on refer to their weights as per changes in valuation from November to December.

With Facebook (FB) and Class C shares of Alphabet (GOOG) leading the way, the information technology sector, which forms a third of the fund’s assets, emerged as the biggest contributor to the fund’s returns in 2015. Class A shares of Visa (V) also contributed a good deal. However, Micron Technology (MU) and Baidu (BIDU) reduced the sector’s positive contribution a bit.

The consumer discretionary sector was a dash behind information technology in terms of positive contribution in 2015. Amazon (AMZN) was by far the highest contributor from the sector with The Home Depot (HD) and Netflix (NFLX) contributing a sizable amount as well. Meanwhile, stocks like Michael Kors Holdings Limited (KORS) and 21st Century Fox (FOXA) ensured that detractors had a representation.

An interesting thing to note about that fund has been its stock picks in the energy sector. Even with all the headwinds, the energy sector emerged as a positive contributor for 2015, primarily driven by Cabot Oil & Gas (COG).

Reasons for above-average performance

The fund navigated 2015 decently enough to qualify it as an above-average performer. However, industrials were the bane of the fund’s returns. Further, select stocks emerged as meaningful negative contributors, thus capping the fund’s returns.

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


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