JPMorgan Core Plus brings to bear the best of the firm's global fixed-income resources with its seasoned portfolio managers and collaborative process; its cheapest share class earns a Morningstar Analyst Rating of Silver, while its more expensive shares are rated Bronze and Neutral.
This strategy has long benefited from the thorough, bottom-up work of well-resourced and seasoned fundamental research analysts. Its management team also boasts considerable depth and experience. Lead managers Steve Lear (JPMorgan’s U.S. fixed-income CIO) and Andrew Norelli joined the strategy in 2013 and 2014, respectively, and make broad asset-allocation decisions based on the firm’s macroeconomic forecasts and input from three veteran sector-focused comanagers, each of whom represent specialist teams from the firm’s global fixed-income platform. Rick Figuly, named to the fund’s roster in 2006, manages the securitized sleeve, while Lisa Coleman and Tom Hauser each joined in July 2020 and oversee the investment-grade and high-yield credit sleeves, respectively. All five of these managers each bring over two decades of investing experience and long careers at the firm.
This strategy, which sits in the intermediate core-plus bond Morningstar Category, relies on off-benchmark stakes in high-yield credit and securitized sectors to differentiate it from the Bloomberg U.S. Aggregate Bond Index. The fund typically holds between 5% and 20% of assets in junk-rated corporates (the index features none, and many peers keep that exposure under 10%). Nonagency securitized debt makes up less than 2% of the index, but this team can invest up to 15% in commercial mortgage-backed securities, and up to 10% each in nonagency MBS and asset-backed securities; as of August 2022, the fund held 8% in high-yield and 25% in nonagency securitized bonds.
This combination of top-down and bottom-up sensibilities has paid off for investors. Since Norelli took the co-lead on the strategy in March 2014 through September 2022, its R6 share class’ 1.6% annualized return outpaced the benchmark’s 1.2% and its distinct intermediate core-plus peer median’s 1.3%. This top-quartile showing was even better on a risk-adjusted basis, as measured by Sharpe ratio, outpacing 84% of its rivals.