JPMorgan Total Return’s contrarian leader, Bill Eigen, and his small Boston-based team aim to apply an unconstrained framework to this core-plus bond offering. Despite the strategy’s large toolbox, Eigen’s portfolio calls have not separated it from the pack. It receives a Morningstar Analyst Rating of Neutral across its cheapest share classes and Negative for its most expensive share class.
Bill Eigen and his team typically operate independently of the firm’s broader fixed-income complex despite the vast resources that it offers. Eigen has led his small team in the management of unconstrained mandates at JP Morgan since 2008. JPMorgan Total Return adopts the characteristics of a core bond strategy through the lens of an unconstrained manager and aims to manage risk exposures based on the macro views of Eigen. While the team has not experienced turnover over the past couple of years, prior roster churn and its thinly resourced cohort (seven members as of December 2021) remain a concern given the strategy’s wide-ranging, flexible mandate, which has featured allocations to high-yield bonds, non-agency mortgage-backed securities, credit default swaps and other forms of esoteric instruments.
Eigen’s goal here is to stick close to the Bloomberg U.S. Aggregate Bond Index during risk-off periods and diversify from (and outperform) it during risk-on periods, but also play the role of liquidity provider during volatile periods. In its early years, the strategy often leaned farther away from its index and into opportunistic, credit-intensive bonds, giving it an adventurous credit profile relative to its intermediate core-plus bond Morningstar Category peers. It has dialed back these investments in recent years in favor of more core-oriented securities, including investment-grade corporates and agency mortgages. Historically, Eigen has sought to limit interest-rate exposure by keeping duration shorter than that of the benchmark.
This approach has produced mixed results over the long term. The 3.2% annualized return of its Institutional share class over the trailing 10 years ended January 2022 beat its bogy’s 2.6% result but fell short of its typical rival.