Bestinvest says
Briefly, they are still using their quant process with the human expert overlay – so it is not a pure quant fund. They have not changed their systems but have snapped up more staff in the recent market downturn. Their current view is: large caps are looking cheap; small caps have the better momentum; large cap technology companies are particularly attractive. Their style fits between index tracking and active management fund. Their strategy is most effective when the US market is very well researched and where active managers find it hard to add value. The current environment however favours more active managers, where we have several recommendations.
The fund's objective is to maximise long-term capital growth in a risk controlled manner. It invests primarily in US equities and its benchmark is the S&P 500. The process is disciplined and primarily quantitative and looks to capture market inefficiencies within growth and value stocks. It uses four factors to capture the relative attractiveness of Value and Momentum. The factors are: Forward Price/Earnings & Price/Free Cash Flow (value factors) and Price Momentum & Earnings Revisions (Momentum Factors). The value and momentum factors are then combined to create an overall value-momentum score. Stocks are then ranked with the highest scoring stocks entering the portfolio. This is effectively a "barbell approach" combining both growth and value strategies. JPMorgan have recently added more staff to this team and imposed a manual override so it is no longer a pure quant-driven process.