J.P. Morgan introduced an enhanced indexed mutual fund - the J.P. Morgan Institutional SmartIndex Fund. Designed for large institutional investors and defined contribution plans, the fund offers market-like risk with the potential for outperformance.
The fund's managers, led by Rick Nelson, managing director and head of J.P. Morgan's enhanced equity strategy, use fundamental research to develop relative value rankings within each market sector.
The fund will avoid stocks in the S&P 500 that are overvalued and redistribute the assets to stocks that are more undervalued or fairly valued. The strategy is designed to limit volatility, relative to the S&P 500 index, by staying close to the index weightings for each sector and keeping tight controls on the variance of any single stock from its benchmark weighting.
