Morningstar Magazine - April/May 2018 - 80

Ten Questions

Anne Lester of J.P. Morgan on meeting
goals in a muted market.
Laura Lallos, Morningstar magazine's managing
editor, interviewed Lester in February.
1. What are your return expectations for the

next decade?

Our long-term capital market assumptions
continue to forecast relatively muted returns. This
year, the main drivers of return are positive from
a global growth perspective, but given current
valuations in both equity and fixed-income markets,
our starting point is relatively rich, certainly
compared to 10 years ago.
2. How can retirement investors succeed in

against rising rates, we don't think that the time
is quite right now. That being said, one
advantage of having a great set of underlying
fixed-income portfolio managers is that
their underlying duration views naturally filter
into our portfolio.
6. Where would you be working now, if not within
financial services?

Given how I spend my free time, I'd either be a
novelist or a professional musician. (I play viola
and piano.) That is assuming I didn't get back into
public policy in some way, which is where I started
working out of college.

this environment?

Plan sponsors can help by encouraging
greater savings through automatic enrollment
and contribution escalation, and by making
portfolio diversification easier through re-enrollment into qualified default investment
alternatives like target-date funds. They can also
employ active management. With a lower
outlook for market returns, we believe excess
returns are critical.
Anne Lester is a portfolio manager and
head of retirement solutions for J.P. Morgan
Asset Management's global investment
management solutions. She developed
the firm's defined-contribution asset-allocation
strategies, including the JPMorgan
SmartRetirement target-date series, which
has earned a Morningstar Analyst
Rating of Gold. Lester and her team won
the 2014 Morningstar Allocation Fund Manager
of the Year Award. They've been nominated
three times, most recently for 2017.

3. How can plan providers best guide individuals?

By not relying on averages-for retirement
age, life expectancy, investment returns. No one
is average. The strongest retirement plan
should be designed for the edges as well as the
middle. Employers and providers should
personalize data to the greatest extent possible.
4. Which equity markets offer the best values?

We think the best value is offered by broadly
diversified positions across risk assets,
especially overseas equity markets. This includes
both developed and emerging markets.
5. Are you positioning your portfolios against rising

interest rates?

While we will from time to time take advantage
of our tactical views to position the portfolio

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Morningstar April/May 2018

7. What prompted your shift from government

to investing?

I got frustrated working in politics by the relatively
slow pace of progress and lack of a bottom
line-the consistent, repeatable measure of
success was an election.
8. How are the two pursuits similar?

Now, over 30 years later, I do realize that progress
on systemic issues like retirement takes time,
and persistent effort. To be successful in any
endeavor, you have to have a plan and a process.
That is as true for politics as it is for investing,
and for performing music for that matter.
9. You worked for a member of parliament in Japan.
Do you return for visits?

I've been able to travel to Japan on business fairly
often, but not as often as I'd like!
10. Where was your last vacation?

We were able to take our two college students
(both boys) skiing the first week of January.
It was the first time we were able to liberate
ourselves from the K-12 school calendar, and it
was marvelous! I love being in the mountains,
and skiing is a wonderful way to spend time with
older teens and young adults.
Table of Contents for the Digital Edition of Morningstar Magazine - April/May 2018
