So, Why Has This Fund Stank So Bad?

Factual Questions
1

A friend has this fund as an option in their company’s 401K program.
JPMorgan SmartRetirement 2045 A (JSAAX)

I’m looking at the prospectus mailed out from her company.
The pertinent part for me is the Average Annual Return.
It is showing:
1 Year: 0.73%
5 Year: 1.87%

Here’s the actual question:
Why so bad?
Is this expected performance for a fund in this category?

Background:
The 401K has a 50% company match up to 6%. So, you put in 6%, they put in 3%.

2

I just pulled up a five-year chart comparing that fund against the S&P 500, and not surprisingly, they track very closely. My guess (without doing any research whatsoever) is that this fund is mostly invested in the S&P 500.

3

Okay. So, the market stank during that interval.
Thank you.
Anyone know if their load is figured into ‘Average Annual Return’?
Can anyone figure out their load from the site for the fund?
The fund: JSAAX
I can’t seem to.

4

Here are the holdings: JPMorgan SmartRetirement 2045 Fund (JSAAX) Holdings - Yahoo Finance
The challenge in analyzing it in any detail is that the top ten holdings are all mutual funds, which means you’d have to look at the composition of each one to see individual equities.

Some of the investments are in international stock - I see at least 15% of assets there, just in the top ten holdings. International stocks are down for now and that could be part of the problem. 5% of the holdings are in cash, which will return essentially nothing.

I would certainly look at more than the 1 yr and 5 yr numbers (which you can do at Yahoo or other sites). The 5 yr numbers are still reflecting the dip in 2007-2008

5

It was founded in 2007, so no 10 year stats for us…

6

Right… but, for example, the 2-year value (looking at the historical price charge) has gone from about 12.75 to 14.50, about 14%, and you should have had another 2-4% worth of dividends in the same period. So it’s had good runs within that the 5 year total.

You can also do comparisons. For example, here’s the 2-year return plotted against S&P 500 (using the ETF SPY for the S&P). You can see from this that the fund is substantially underperforming against the S&P 500. - a return of ~14% instead of ~28%.