Success as an asset manager begins with two characteristics: longevity and consistency. Clients want to know that you are committed to the business for the long term, and they expect a proven track record for outperformance.
At J.P. Morgan Asset Management, we have been building a client-first, fiduciary culture for more than 180 years, working with an increasingly diverse group of institutions and individuals in more than 130 countries to help them manage their money.
Our longevity has helped us earn a level of client trust and a depth of investment experience and expertise that are difficult to replicate. Our advisors have stood side by side with clients during their most promising and most trying times. That’s why the relationships we have built endure. In fact, in 2016, we have 260 families celebrating their 75th or greater anniversary of working with us.
In addition to long-standing clients, we have many long-tenured employees: More than 3,300 of our Asset Management colleagues have been with the firm for at least 15 years, including nearly 1,000 who have been with the firm for 25 years or more. We also have had tremendous consistency among our top senior portfolio management talent, with a retention rate greater than 95%.
These portfolio managers have managed through market peaks and valleys – and all the volatility that comes in between. They understand what it means to invest for the long term and are able to look past market noise to make smart investment decisions that are grounded in deep research and local insights and that generate alpha for our clients.
Superior investment performance driving strong financial results
A global team with a proven track record and commitment to innovation
Our more than 600 portfolio managers work closely with our 250 research analysts and 30 market strategists in Global Investment Management (GIM) to form the foundation of our investments platform. Each of them wakes up every day thinking about how to capitalize on market opportunities for our clients – a group that includes 60% of the world’s largest pension funds, sovereign wealth funds and central banks.
At the end of 2015, 84% of our 10-year, long-term mutual fund assets under management (AUM) ranked in the top two quartiles. That collective performance is complemented by equally strong asset class performance in Equity (87%), Fixed Income (77%) and Multi-Asset Solutions (84%), resulting in a record 231 of our mutual funds earning a four- or five-star rating and positive client asset flows every year since 2004.
In addition to our existing suite of mutual funds, we remain focused on product innovation. In 2015, we introduced 40 new funds. At the same time, we closed down or merged 37 to help ensure that we are offering an optimized portfolio of products to our clients and that they are benefiting from our best performance.
Strong financial performance
Our consistently strong investment performance is one of the primary reasons we have been able to continue to produce strong financial results for shareholders. In 2015, Asset Management generated record revenue of $12.1 billion in a challenging environment.
It also is the reason we have been able to grow our AUM and client assets consistently. Since 2010, our assets under management have increased by an annual rate of 6% to $1.7 trillion, and our client assets have grown 5% annually to $2.4 trillion.
The credit side of our business continues to be an important driver of our growth, with both loan balances (excluding mortgages) and mortgage balances reaching record levels of $84 billion and $27 billion, respectively, in 2015.
Investing in talent and technology
Talent and technology continue to be at the center of our success, both today and in the future. We need to have the best people on the ground and ready to work with clients wherever they need our solutions and expertise. And those people need to be armed with technology tools that enable them to serve clients efficiently and effectively.
Training top advisors
As a business, we are constantly educating our advisors to ensure that they are at the forefront of industry trends and important compliance and controls issues. Last year, over 850,000 hours of training were completed across more than 750 Asset Management programs. This comprehensive curriculum covers topics ranging from markets and economy to product innovation to understanding cybersecurity to regulatory changes and additional advisory skills.
Improving the client experience
Technology is playing a critical role in improving the client experience. For example, Global Wealth Management (GWM) is developing a digital strategy that will enable clients to engage with us how and when they want, using the channels they want. Our goal is to complement the advice and solutions our people offer with tools for clients that want to interact or consume our thought leadership in new ways.
Technology also enables us to be more efficient across our business, from sales support to controls. In GIM, we continue to enhance our application toolset for our sales teams, which helps our advisors access information and materials on our entire product range, investment capabilities and market insights and more quickly respond to client requests. On the controls side, we continue to introduce new technology tools that automate previously manual processes, such as our client onboarding processes, which creates a more seamless client experience and improves the integrity of our data and how we capture the information.
Big data is one of the tools that is dramatically improving our analytics. Using big data and our innovative visualization tools, our portfolio managers can take historical data and combine it with predictive analytics to inform how to model their next moves. Big data also helps us identify areas where we can collaborate across the firm to serve clients that would benefit from Asset Management’s offerings and vice versa.
Value of being part of JPMorgan Chase
The ability to partner across the broader 235,000-person JPMorgan Chase global franchise is one of our business’s truly unique characteristics. It gives us the opportunity to help clients with more of their financial needs and enables us to benefit from a world-class global platform and infrastructure.
Working together across businesses
Asset Management is uniquely positioned as a hub that connects the different businesses of JPMorgan Chase. Consumer & Community Banking intersects with GWM on credit cards, banking and mortgages. GWM provides the solutions for Chase Wealth Management’s investments offering. And the Corporate & Investment Bank works with both GIM and GWM on custody services, as well as when clients have transition events and need cash management or individual wealth management.
Benefiting from shared infrastructure
The JPMorgan Chase platform offers a significant competitive advantage for us. We are able to leverage many core infrastructure capabilities – from cybersecurity to digital capabilities to shared real estate – rather than having to build our own from scratch. Consider this: Forty percent of our GWM clients also use Chase retail branches on a monthly basis. We both benefit from and contribute to the strength of the JPMorgan Chase brand.
Well-positioned for the future
We are proud of the performance we have delivered to our clients and shareholders and are excited about the opportunities that are in front of us. And we know that if we remain focused on doing first-class business in a first-class way and continue to deliver strong investment performance and product innovation, supported by robust controls, our success will follow.
Mary Callahan Erdoes
CEO, Asset Management
2015 Highlights and Accomplishments
- Fiduciary mindset ingrained since mid-1800s
- Positive client asset flows every year since 2004
- $2.4 trillion in client assets
- Record revenue of $12.1 billion
- Record loan balances of $84 billion
- Record mortgage balances of $27 billion
- #1 cumulative long-term active mutual fund flows (2010—2015)
- #3 cumulative long-term active + passive mutual fund/ETF flows (2010—2015)
- Retention rate of over 95% for top senior portfolio management talent
- 250 research analysts, 30+ market strategists, 5,000+ annual company visits
- #2 global money market fund
- #1 Institutional Money Market Fund Manager Worldwide (iMoneyNet, September 2015)
- #1 Private Bank in the World (Global Finance, October 2015)
- #1 Private Bank Overall in North America (Euromoney, February 2016)
- #1 Private Bank Overall in Latin America (Euromoney, February 2016)
- #1 U.S. Private Equity Money Manager (Pensions & Investments, May 2015)
- Top Pan-European Fund Management Firm (Thomson Reuters Extel, June 2015)
- Best Asset Management Company for Asia (The Asset, May 2015)
- #2 Hedge Fund Manager (Absolute Return, September 2015)