Because JPMorgan’s portfolio managers tend not to take dramatic risks, their funds are consistent performers and are less volatile than those of other firms, which makes them easier to sell to retail investors, Lallos says.

One unit under Erdoes’s command that has underperformed is institutional money management, which caters to big pension funds, governments and central banks. Assets under management declined 1.9 percent to $723 billion in June from $737 billion in September 2009.

Institutional money management’s fixed-income holdings lagged their benchmarks from 2005 to 2007, Erdoes says. In 2008 most fixed-income managers were replaced, and it has been Erdoes’s job to rebuild, an especially difficult job in the middle of the worst U.S. economy since the Great Depression.

“We had a lot of assets that had us on probation, and we wanted to make sure we knew what we were doing,” Erdoes says. “We persevered, and we now have a really strong three-year, almost-four-year track record.”

Fixed Income Fix

More than 80 percent of JPMorgan’s fixed-income mutual funds now rank in the top 25th percentile among investments tracked by Morningstar for five-year performance.

Erdoes is in the middle of a tricky transition as Glenn Dubin, 56, the longtime head of Highbridge Capital Management LLC, gives up daily oversight of the hedge-fund company he founded in 1992 and in which JPMorgan took a controlling stake in 2004. Highbridge, with about $30 billion in assets, is part of a suite of JPMorgan Asset Management alternative offerings that include funds of hedge funds, funds of private-equity funds and real estate.

Wealthy clients had invested $147 billion in alternatives as of the end of the second quarter, up 56.4 percent from late 2009. The bank doesn’t disclose performance figures for alternative assets.

‘Lo and Behold’

The new head of Highbridge, Scott Kapnick, whom Dubin hired in 2007 from Goldman Sachs Group Inc., was named on July 12. Dubin remains Highbridge chairman. Erdoes says her worry was that when Dubin stopped running Highbridge, longtime clients loyal to him would take their money elsewhere.