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JPMorgan Managed Income L JMGIX

Quantitative rating as of
NAV / 1-Day Return
9.97  /  0.01 %
Total Assets
9.3 Bil
Adj. Expense Ratio
Expense Ratio
0.250%
Distribution Fee Level
Below Average
Share Class Type
Retirement, Large
Category
Ultrashort Bond
Credit Quality / Interest Rate Sensitivity
Medium / Limited
Min. Initial Investment
3,000,000
Status
Open
TTM Yield
0.74%
Effective Duration
0.32 years
unlocked

Morningstar’s Analysis JMGIX

Quantitative rating as of .

The Morningstar Quantitative Rating for funds is analogous to the rating our analyst might assign to the fund if they covered it.

Our analysts assign Silver ratings to strategies that they have high conviction will outperform a relevant index, or most peers, over a market cycle.

Summary

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A strong management team and sound investment process underpin JPMorgan Managed Income L's Morningstar Quantitative Rating of Silver. The portfolio maintains a cost advantage over competitors, priced within the second-cheapest fee quintile among peers.

The strategy has been able to retain portfolio managers, which builds stability and continuity and results in an Above Average People Pillar rating. The strategy's effective investment approach earns an Above Average Process Pillar rating. The portfolio has underweighted government bonds and debt with 20- to 30-year maturities compared with category peers. The strategy belongs to a strong asset-management firm that earns an Above Average Parent Pillar rating. The firm, for example, has had a favorable lineup success ratio and overall attractive fees.

Process

| Above Average |

Morningstar's style-agnostic evaluation of this fund's process seeks to understand whether the strategy has a performance objective and sensible, clearly defined, repeatable execution. JPMorgan Managed Income Fund earns an Above Average Process Pillar rating.

Compared with other funds in the Ultrashort Bond Morningstar Category, this fund, historically, hews closely to peers' credit and interest-rate sensitivity. Opening the analysis to additional factors, the portfolio, over time, has displayed three biases whether toward or away from certain fixed-income instruments. First, the managers have displayed an underweight position on government bonds. Additionally, there's been a notable bias away from debt with 20- to 30-year maturities. And finally, the fund leans meaningfully toward A rated bonds.

This strategy's 12-month yield is 0.9%, lower than its average peer's 1.2%. It also has a 3.7% 30-day SEC yield (a measure similar to yield-to-maturity). A lower yield tends to indicate lower credit risk. The portfolio has a higher average surveyed credit quality, A, compared with the typical peer's BBB and it holds no non-investment grade assets, despite the average peers' 1%. Strategies with less credit risk may help to provide a reliable ballast during periods of equity market stress.

People

| Above Average |

Despite managers' lack of personal investments, JPMorgan Managed Income Fund benefits from portfolio management stability. As the latter outweighs the former, the strategy earns an Above Average People Pillar rating. David N. Martucci’s veteran status, with 22 years of portfolio management experience, imprints a positive mark on the strategy as it brings a wealth of experience to the table. The average Morningstar Rating of the strategies they currently manage is 4.3 stars, demonstrating strong risk-adjusted performance. David N. Martucci is supported by an experienced team, being able to draw on three additional listed managers, who average 11 years of portfolio management experience. As a team, they manage three investment vehicles together, with solid long-term prospects. The strategies average a Silver asset-weighted combined Morningstar Analyst and Quantitative Rating, indicating a position to deliver positive alpha in aggregate. There has been limited turnover among the portfolio-management ranks, which has provided stability for the investment strategy. Stability tends to go hand in hand with positive results. There have been no documented departures within the past five years. None of the portfolio managers here invests in this fund. This hurts the rating because it suggests the team has little confidence the fund can deliver for investors, and that the alignment of managers' interests with those of the strategy's investors could be far better than it is.

Parent

| Above Average |

J.P. Morgan Asset Management’s strong investment culture, which shows through its long-tenured, well-aligned portfolio managers and deep analytical resources, supports a renewed Above Average Parent rating.

Across asset classes and regions, the firm's diverse lineup features many Morningstar Medalists, such as its highly regarded U.S. equity income strategy that’s available globally. There's been some turnover in the multi-asset team recently, but it remains deeply resourced and experienced. Manager retention and tenure rates, and degree of alignment for U.S. mutual funds compare favorably among the competition. Managers' compensation emphasizes fund ownership over stock ownership, which is distinctive for a public company.

The firm continues to streamline its lineup and integrate its resources further. For instance, in late 2019, the multi-asset solutions division combined with the passive capabilities. The firm hasn’t launched trendy offerings as it’s mostly expanded its passive business lately, but acquisition-related redundancies and more hazardous launches in the past weigh on its success ratio, which measures the percentage of funds that have both survived and outperformed peers. Fees are regularly reviewed downward globally; they're relatively cheaper in the U.S. than abroad. Also, the firm is building its ESG capabilities and supports distinctive initiatives on diversity.

Performance

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This strategy’s Retirement share class has held up nicely, holding even with its peers and outlasting the category benchmark. Over a 10-year period, this share class' 1.0% gain mirrored the category's average return. And it beat the category index's, Bloomberg Barclays Government/Corporate 1 Year Duration Bond Index's, gain by an annualized 41 basis points over the same period.

The risk-adjusted performance only continues to make a case for this fund. The share class led the index with a higher Sharpe ratio, a measure of risk-adjusted return, over the trailing 10-year period. These strong risk-adjusted results have not come with a bumpier ride for investors. This strategy took on similar risk as the benchmark, as measured by standard deviation. Finally, the share class proved itself effective by generating positive alpha, over the same 10-year period, against the category group index: a benchmark that encapsulates the performance of the broader asset class.

Price

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Returns vary from period to period, but expenses are always deducted. It is good practice to weigh them heavily in any investment evaluation. This share class sits in the second-cheapest quintile of its Morningstar Category. Its attractive fee, paired with the fund’s People, Process, and Parent Pillars, indicates that this share class has the ability to deliver positive alpha against its category benchmark, explaining its Morningstar Quantitative Rating of Silver.