How does JP Morgan’s Asset Management group make profit? The JP Morgan Asset Management group (“JP Morgan” or “the group”) earns profits by charging direct and indirect fees including commissions on the total assets under management (“AUM”) of $847 bn . The group offers a full range of financial products comprising U.S., non-U.S. and global mutual funds/investment management, across cash management, equity, fixed income segments as well as alternative asset classes, such as private equity and real estate. It has a worldwide client base of institutional and retail clients, including governments, corporations, endowments, foundations and individuals.
The equities segment accounts for $370 bn1 AUM spread over a mix of
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Yes, we agree with the philosophy of the JP Morgan Intrepid Funds. A lot of traditional funds are positioned on the efficient market hypothesis, i.e., investors are either rational or that sophisticated investors trade aggressively to force stocks to be accurately priced. However, in the last two and half decades, the efficient market hypothesis has not convincingly explained the anomalies of relatively large and often irrational stock price movements. These dislocations can only be explained due to the collective impact of other human biases at work in the markets. JP Morgan has drawn on the research in psychology and BF to understand these distortions and design products that are structured to capture some the resulting opportunities. These biases include overconfidence, loss aversion, anchoring and recency among other. In particular, the JP Morgan Intrepid Funds focus on two main biases: overconfidence and loss aversion. Overconfidence refers to an individual’s tendency to overestimate his or her own ability to pick winning stocks, while loss aversion is the tendency to seek pride and avoid regret by focusing on short term winning stocks. The former creates opportunities for the JP Morgan Intrepid Funds to purse value investing and momentum investing for the benefit of investors
What is Behavioral Investing? Behavioral Investing refers to making investments