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A ballast with higher income

To say that bonds have regained relevance in portfolios would be to state the obvious. As the chart on the right shows, current inflation-adjusted yield on the 10-Year US Treasury continues to hover within the highest range in over a decade, following an extended period of low or even negative real yields.

This steep climb can be traced back to the Federal Reserve’s rapid rate hike cycle in 2022-2023, aimed at quelling inflationary pressure. Three years on, nominal yields continue to offset expected inflation, with real yields firmly back in positive territory. As such, the asset class continues to maintain its relevance as an income-generating ballast for portfolios. 

ballast_chart1
Source: Bloomberg, J.P. Morgan Asset Management. Data as of 30.09.2025.

Looking ahead, we believe the fixed income investing landscape remains constructive for several reasons.

1. Yields across multiple bond sectors continue to trade meaningfully above the past 15-year median, presenting attractive opportunities for income generation.

2. Global central banks have shifted into an easing mode, as inflation pressure recedes and growth momentum moderates. Falling rates may enhance the potential for capital gains.

3. Stock-bond correlations have turned negative, particularly as it relates to the shorter-end of the yield curve. This suggests that short duration1 bonds can fulfil its role as a potential ballast for portfolios should downside risks to growth intensify.

Nevertheless, staying active and flexible will be crucial to harness income opportunities across multiple sectors while dynamically managing credit and duration risks amid a fast changing and uncertain macro environment.

For over a decade, the JPMorgan Income Fund has successfully navigated multiple economic and political cycles, while recording robust returns, attractive income and lower volatility versus global investment grade bonds. Its long track record of actively managing duration exposure may prove valuable in navigating potential downside growth risks and inflation surprises in the current market environment.

ballast_chart2
Source: Bloomberg, FactSet, J.P. Morgan Economic Research, J.P. Morgan Asset Management. Data as of 30.09.2025. Based on: Cash (1-3 Month US Treasury Bills): Bloomberg US Treasury – Bills (1-3 months); US Treasury: Bloomberg Global US Treasury – Bills (3-5 years); US Mortgage Backed Securities (MBS): Bloomberg US Aggregate Securitised – MBS; US Investment Grade (IG): Bloomberg US Aggregate Credit – Corporate IG; USD Asian Bonds: J.P. Morgan Asia Credit Index (JACI); Developed Market Government

Source: Bloomberg, FactSet, J.P. Morgan Economic Research, J.P. Morgan Asset Management. Data as of 30.09.2025. Based on: Cash (1-3 Month US Treasury Bills): Bloomberg US Treasury – Bills (1-3 months); US Treasury: Bloomberg Global US Treasury – Bills (3-5 years); US Mortgage Backed Securities (MBS): Bloomberg US Aggregate Securitised – MBS; US Investment Grade (IG): Bloomberg US Aggregate Credit – Corporate IG; USD Asian Bonds: J.P. Morgan Asia Credit Index (JACI); Developed Market Government Bonds: J.P. Morgan Government Bond Index – Global Traded; US High Yield Bonds: Bloomberg US Aggregate Credit – Corporate High Yield Index; Asia High Yield Bonds: J.P. Morgan Asia Credit High Yield Index; USD Emerging Market Debt: J.P. Morgan Emerging Market Bond Index Global (EMBIG); Local Currency Emerging Market Debt: J.P. Morgan Government Bond Index – EM Global Diversified (GBI-EM Div). Returns are in US dollars. Past performance is not a reliable indicator of current and future results. Provided for information only to illustrate macro trends, information shown is based upon market conditions at the time of the analysis and is subject to change. Not to be construed as offer, research or investment advice.

ballast_chart3
Source: Bloomberg, FactSet, J.P. Morgan Credit Research, J.P. Morgan Asset Management. Data as of 30.09.2025. US Treasuries: Bloomberg US Treasury Index; US IG: Bloomberg US Corporate Index; US MBS: Bloomberg US Mortgage-Backed Securities (MBS) Index; US CMBS: Bloomberg US Investment Grade CMBS Index; US ABS: J.P. Morgan Asset-Backed Securities Index; Europe IG: Bloomberg Euro Aggregate Corporate Bond Index; USD EMD: J.P. Morgan Emerging Market Bond Index (EMBI) Global Diversified Index; Local

Source: Bloomberg, FactSet, J.P. Morgan Credit Research, J.P. Morgan Asset Management. Data as of 30.09.2025. US Treasuries: Bloomberg US Treasury Index;

US IG: Bloomberg US Corporate Index; US MBS: Bloomberg US Mortgage-Backed Securities (MBS) Index; US CMBS: Bloomberg US Investment Grade CMBS Index; US ABS: J.P. Morgan Asset-Backed Securities Index; Europe IG: Bloomberg Euro Aggregate Corporate Bond Index; USD EMD: J.P. Morgan Emerging Market Bond Index (EMBI) Global Diversified Index; Local Emerging Market Debt (EMD): J.P. Morgan GBI-EM Global Diversified Index; EM Corporates (Corp): J.P. Morgan Corporate Emerging Market Bond Index (CEMBI) Broad Diversified Index; Europe HY: Bloomberg Pan European High Yield (HY) Index; US HY: Bloomberg US Corporate High Yield Bond Index. All sectors shown are yield-to-worst. Yield-to-worst is the lowest possible yield that can be received on a bond apart from the company defaulting. Past performance is not indicative of current or future results. Provided for information only to illustrate macro trends, information shown is based upon market conditions at the time of the analysis and is subject to change. Not to be construed as offer, research or investment advice.

ballast_chart4
Source: Bloomberg, J.P. Morgan Asset Management. Data as of 30.09.2025. Provided for information only to illustrate macro trends, information shown is based upon market conditions at the time of the analysis and is subject to change. Not to be construed as offer, research or investment advice.
ballast_chart5
Source: Bloomberg, SIFMA, ICE BofA US HY Index, CS Leveraged Loan Index, JPMorgan, J.P. Morgan Asset Management. Figures reflect the most recently available data as of 30.09.2024. Some components may be lagged. The Bloomberg US Aggregate Bond Index is a broad-based flagship benchmark that measures the investment grade, US dollar denominated, fixed-rate taxable bond market. The index includes Treasuries, government-related (govt) and corporate securities, fixed rate agency Mortgage-Backed Securit

Source: Bloomberg, SIFMA, ICE BofA US HY Index, CS Leveraged Loan Index, JPMorgan, J.P. Morgan Asset Management. Figures reflect the most recently available data as of 30.09.2024. Some components may be lagged. The Bloomberg US Aggregate Bond Index is a broad-based flagship benchmark that measures the investment grade, US dollar denominated, fixed-rate taxable bond market. The index includes Treasuries, government-related (govt) and corporate securities, fixed rate agency Mortgage-Backed Securities (MBS), Asset-Backed Securities (ABS) and Commercial Mortgage-Backed Securities (CMBS ) (agency and non-agency). Provided for information only to illustrate macro trends, information shown is based upon market conditions at the time of the analysis and is subject to change. Not to be construed as offer, research or investment advice.

ballast_chart6_au
Source: Bloomberg, J.P. Morgan Asset Management. Data as of 30.09.2025. Volatility is realised annualised volatility based on monthly data since the JPMorgan Income Fund’s inception on 02.06.2014. Volatility is calculated based on the A (acc) - USD share class. HY: High Yield; IG: Investment Grade; MBS: Mortgage-backed Securities. Indices used are Bloomberg Treasury Index (US Treasuries), Bloomberg Corporate Credit Index (Global IG Corporates), Bloomberg US HY Index (US Corporate High Yield), Bl

Source: Bloomberg, J.P. Morgan Asset Management. Data as of 30.09.2025. Volatility is realised annualised volatility based on monthly data since the JPMorgan Income Fund’s inception on 02.06.2014. Volatility is calculated based on the A (acc) - USD share class. HY: High Yield; IG: Investment Grade; MBS: Mortgage-backed Securities. Indices used are Bloomberg Treasury Index (US Treasuries), Bloomberg Corporate Credit Index (Global IG Corporates), Bloomberg US HY Index (US Corporate High Yield), Bloomberg US MBS Index (MBS), Bloomberg US Aggregate Index (US Aggregate). *US HY Corp is yield to worst, all else is yield to maturity. Yield is not guaranteed and may change over time. Positive yield does not imply positive return. Provided for information only to illustrate macro trends, information shown is based upon market conditions at the time of the analysis and is subject to change. Not to be construed as offer, research or investment advice.

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All investments contain risk and may lose value. This advertisement has been prepared and issued by JPMorgan Asset Management (Australia) Limited (ABN 55 143 832 080) (AFSL No. 376919) being the investment manager of the fund. It is for general information only, without taking into account your objectives, financial situation or needs and does not constitute personal financial advice. Before making any decision, it is important for investors to consider the appropriateness of the information and seek appropriate legal, tax, and other professional advice. For more detailed information relating to the risks of the Fund, the type of customer (target market) it has been designed for and any distribution conditions please refer to the relevant Product Disclosure Statement and Target Market Determination which have been issued by Perpetual Trust Services Limited, ABN 48 000 142 049, AFSL 236648, as the responsible entity of the fund available on https://am.jpmorgan.com/au.