Morningstar raised its rating on the J.P. Morgan SmartRetirement series to a “top” score from “above average” while starting its rating for the State Farm LifePath series with a “below average” rating, as part of the firm’s quarterly ranking of large target-date fund families, said Josh Charlson, senior mutual fund analyst at Morningstar.
“J.P. Morgan’s performance has been very strong and very consistent over the last few years,” Mr. Charlson said in an interview. The firm’s rating was raised after Morningstar performed a stewardship review that examined corporate culture, among other things, he said.
Morningstar’s rating system uses five broad categories — people, parent, performance, portfolio and price. The latter three focus on quantitative measurements such as investment quality and fees; the people and parent categories emphasize qualitative assessments of fund management.
There are five ratings — top, above average, average, below average and bottom.
State Farm is the newest and 22nd fund family to be analyzed by Morningstar. Its offerings mimic target-date products from BlackRock, which is subadviser to State Farm’s target-date series, Mr. Charlson said. BlackRock has an average rating; State Farm’s below-average rating is primarily due to higher fees, he said.
In addition to J.P. Morgan, top-rated target-fund families are Vanguard, T. Rowe Price and American Funds. Still at the bottom are AllianceBernstein and OppenheimerFunds.