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    1. Fixed income revival

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    JPM53983_TheGreatFixedIncome_revival_darker_lens_2800Γ

     

    The fixed income revival

    Unconstrained bond investing for changing markets

     

    Overview
    Approach
    Funds
    Capabilities
    JP Morgan | Fixed Income Freeforms

    Bonds are back

    With the ultra-low interest rate environment at an end and bond valuations attractive for the first time in years, fixed income is resuming its traditional role in portfolios: providing income and portfolio diversification.

    Global government bond yields
    % of BofA/Merrill Lynch Global Government Bond Index
    Total return scenarios for US Treasuries
    %
    Source: (Left) Bloomberg, BofA/Merrill Lynch, J.P. Morgan Asset Management. Index shown is the BofA/Merrill Lynch Global Government Bond index. (Right) Bloomberg, J.P. Morgan Asset Management. Chart indicates the calculated total return achieved by purchasing US 10-year Treasuries at the current yield and selling at the end of 2023 given various changes in yield. For illustrative purposes only. Past performance is not a reliable indicator of current and future results. Guide to the Markets - Europe. Data as of 31 January 2023.
    1
    Fixed income has experienced a dramatic repricing and valuations now look compelling. Real government and corporate bond yields are at multi-decade highs, allowing investors to find the income they need.
    2
    Inflation is beginning to cool. Factoring in the lag with which monetary policy actions feed through into the economy, there are now hopes that central banks will slow the pace of interest rate hikes.
    3
    An environment of lower inflation and less aggressive central bank action will allow bonds to serve as a portfolio diversifier and risk hedge.

    Outsource your fixed income allocation

    To capitalise on the world of opportunities opening up as bond markets recover, while managing uncertainties such as the path of interest rates and inflation, it makes sense to choose a flexible, global approach.

    Unconstrained bond investing allows investors to explore all avenues to seek total return, income and volatility management, with expert managers dynamically adjusting asset allocation and duration as market conditions evolve.  

    No benchmarks, no bias, no borders

    At J.P. Morgan Asset Management, our cross-sector expertise and deep research resources enable us to invest across the global bond universe, building dynamic fixed income portfolios for a range of risk appetites and goals.

    Our disciplined investment process combines top-down and bottom-up analysis, with a common research framework to integrate ideas.

    1 Source: J.P. Morgan Asset Management, as of 31 December 2022.
    2
    In actively managed assets deemed by J.P. Morgan Asset Management to be ESG integrated under our governance process, we systematically assess financially material ESG factors amongst other factors in our investment decisions with the goals of managing risk and improving long-term returns. ESG integration does not change a strategy’s investment objective, exclude specific types of companies or constrain a strategy’s investable universe.

    Unconstrained fixed income funds for diverse objectives

    JP Morgan | UK Net Zero Freeforms

    JPMorgan Funds - Global Bond Opportunities Fund

    Aims to generate attractive total returns over time for investors with a higher risk tolerance.

    JPMorgan Funds - Global Strategic Bond Fund

    Seeks an attractive risk-adjusted return profile over time, with a focus on mitigating downside risk.

    JPMorgan Funds - Global Bond Opportunities Sustainable Fund

    Aims to generate attractive total returns over time, with an explicit focus on sustainability.

    JPMorgan Funds - Income Fund

    Seeks the highest income consistent with a prudent level of risk.

    JPMorgan Funds - Global Bond Opportunities Fund

    Investment objective

    To achieve a return in excess of the benchmark by investing opportunistically in an unconstrained portfolio of debt securities and currencies, using derivatives where appropriate.

    Discover the fund >

    ESG approach

    The fund promotes social and/or environmental characteristics, but does not have sustainable investing as a core objective (SFDR Article 8).

    Risk/return vs. key market indices (EUR, gross of fees, since fund inception)

    Past performance is not a reliable indicator of current and future results.

    Source: J.P. Morgan, Barclays Live, J.P. Morgan Asset Management; as of 31 December 2022. Fund return shown gross of fees for JPMorgan Funds – Global Bond Opportunities Fund (EUR). Based on the official Net Asset Value (NAV) of share class A (acc) in EUR. Since inception: February 2013. Sector returns proxied by the following indices all hedged to EUR where applicable: JPMorgan EMBI Global Diversified (EMD Sovereign), J.P. Morgan CEMBI Broad Diversified (EM Corporate), Bloomberg Global High Yield (Global High Yield), Bloomberg Global Aggregate Corporate (Global Corporate), Bloomberg Global Aggregate Government (Global Government), Bloomberg Global Aggregate (Global Aggregate), Bloomberg Global Multiverse (Global Multiverse). Shown for illustrative purposes only. IG: Investment Grade; EM: Emerging Markets.

    JPMorgan Funds – Global Strategic Bond Fund

    Investment objective

    To achieve a return in excess of its benchmark by exploiting investment opportunities in, amongst others, the debt and currency markets, using derivatives where appropriate.

    Discover the fund >

    ESG approach

    The fund promotes social and/or environmental characteristics, but does not have sustainable investing as a core objective (SFDR Article 8).

    Rolling 1 year performance (EUR, gross of fees)

    Past performance is not a reliable indicator of current and future results.

    Source: J.P. Morgan Asset Management. Inception date: 3 June 2010. Data from 30 June 2011 to 31 January 2023. Gross fund returns are calculated from net returns of the A share class by applying the fund total expense ratio (TER) which includes operating and administrative expenses (O&A) but excludes performance fees. The O&A fees are accrued at the maximum rate, according to what is stated in the fund prospectus. Where the O&A fees incurred are actually lower than the accrual, this would lead to a minor overstatement of gross returns. Performance includes the impact from swing pricing. Please refer to the fund’s prospectus for a description of the other available classes of shares, the performance of which will differ from that shown above.

    JPMorgan Funds – Global Bond Opportunities Sustainable Fund

    Investment objective

    To achieve a return in excess of the benchmark by investing opportunistically in an unconstrained portfolio of debt securities (positively positioned towards Debt Securities with positive E/S characteristics and debt securities issued by companies and countries that demonstrate improving E/S characteristics) and currencies, using derivatives where appropriate. Debt Securities with positive E/S characteristics are those that the Investment Manager believes have been issued by companies and countries that demonstrate effective governance and superior management of environmental and social issues (sustainable characteristics).

    Discover the fund >

    ESG approach

    The fund promotes social and/or environmental characteristics, but does not have sustainable investing as a core objective (SFDR Article 8).

    Seeking to maintain sustainability above the fixed income universe

    Sector ESG scores vs. relative fixed income universe

    Market value % of portfolio with MSCI ESG score
    Above 5
    67%
    Below 5
    20%

    Source: J.P. Morgan Asset Management, Data as at 31 January 2023. For those securities within the portfolio without an MSCI ESG score, a majority will be deemed sustainable or demonstrate improving sustainable characteristics as determined by the Investment Manager. ESG score developed by the Sustainable Investing team to support the investment groups’ quantitative ESG analysis and also to help inform qualitative assessments of individual companies. The purpose of the score is to provide portfolio managers and research analysts with useful ESG information they might not otherwise have access to, to facilitate ESG integration and investment stewardship. The score provides another reference point to enhance the consideration of material ESG risks and opportunities in active investment processes.

    JPMorgan Funds – Income Fund

    Investment objective

    To provide income by investing primarily in debt securities.

    Discover the fund >

    ESG approach

    The fund promotes social and/or environmental characteristics, but does not have sustainable investing as a core objective (SFDR Article 8).

    Seeks to provide attractive yield with lower volatility than individual sectors

    Past performance is not necessarily a reliable indicator for current and future performance. Yield is not guaranteed and may change over time.

    Source: Bloomberg, J.P. Morgan Asset Management. Volatility is realized annualized volatility based on monthly data since Income Fund Inception. Indexes used are: Bloomberg Treasury Index, Bloomberg Corporate Credit Index, Bloomberg US HY Index, Bloomberg US MBS Index. The manager seeks to achieve the stated objectives. Past performance is not necessarily a reliable indicator for current and future performance. Distributions shown for A (div) EUR (hedged) share class.

    *US HY Corp is YTW, all else is YTM.

    As at 31 December 2022. 1EUR-hedge adjustment approximated at -2.60%, subject to change through time. Yields would be higher if stated in USD terms.

    JP Morgan | Fixed Income Freeforms

    Your partner for the bond recovery

    For investors re-evaluating portfolios in this new dawn for bond investing, J.P. Morgan Asset Management offers fixed income solutions that span the risk spectrum, underpinned by the deep resources and rigorous research of a truly global platform.

    Learn more >


    This is a marketing communication and as such the views contained herein do not form part of an offer, nor are they to be taken as advice or a recommendation, to buy or sell any investment or interest thereto. Reliance upon information in this material is at the sole discretion of the reader. Any research in this document has been obtained and may have been acted upon by J.P. Morgan Asset Management for its own purpose. The results of such research are being made available as additional information and do not necessarily reflect the views of J.P. Morgan Asset Management. Any forecasts, figures, opinions, statements of financial market trends or investment techniques and strategies expressed are, unless otherwise stated, J.P. Morgan Asset Management’s own at the date of this document. They are considered to be reliable at the time of writing, may not necessarily be all inclusive and are not guaranteed as to accuracy. They may be subject to change without reference or notification to you. It should be noted that the value of investments and the income from them may fluctuate in accordance with market conditions and taxation agreements and investors may not get back the full amount invested. Changes in exchange rates may have an adverse effect on the value, price or income of the products or underlying overseas investments. Past performance and yield are not a reliable indicator of current and future results. There is no guarantee that any forecast made will come to pass. Furthermore, whilst it is the intention to achieve the investment objective of the investment products, there can be no assurance that those objectives will be met. J.P. Morgan Asset Management is the brand name for the asset management business of JPMorgan Chase & Co. and its affiliates worldwide. To the extent permitted by applicable law, we may record telephone calls and monitor electronic communications to comply with our legal and regulatory obligations and internal policies. Personal data will be collected, stored and processed by J.P. Morgan Asset Management in accordance with our EMEA Privacy Policy www.jpmorgan.com/emea-privacy-policy. As the product may not be authorised or its offering may be restricted in your jurisdiction, it is the responsibility of every reader to satisfy himself as to the full observance of the laws and regulations of the relevant jurisdiction. Prior to any application investors are advised to take all necessary legal, regulatory and tax advice on the consequences of an investment in the products. Shares or other interests may not be offered to, or purchased, directly or indirectly by US persons. All transactions should be based on the latest available Prospectus, the Key Information Document (KID) and any applicable local offering document. These documents together with the annual report, semi-annual report, the articles of incorporation and sustainabilityrelated disclosures for the Luxembourg domiciled products are available in English upon request from JPMorgan Asset Management (Europe) S.à r.l., 6 route de Trèves, L-2633 Senningerberg, Grand Duchy of Luxembourg, your financial adviser, your J.P. Morgan Asset Management regional contact or at https://am.jpmorgan.com. A summary of investor rights is available in English at https://am.jpmorgan.com/lu/investor-rights. J.P. Morgan Asset Management may decide to terminate the arrangements made for the marketing of its collective investment undertakings. In Switzerland, JPMorgan Asset Management (Switzerland) LLC, Dreikönigstrasse 37, 8002 Zurich, acts as Swiss representative of the funds and J.P. Morgan (Suisse) SA, Rue du Rhône 35, 1204 Geneva, as paying agent of the funds. JPMorgan Asset Management (Switzerland) LLC herewith informs investors that with respect to its distribution activities in and from Switzerland it receives remuneration which is paid out of the management fee as defined in the respective fund documentation. Further information regarding this remuneration, including its calculation method, may be obtained upon written request from JPMorgan Asset Management (Switzerland) LLC. This communication is issued in Europe (excluding UK) by JPMorgan Asset Management (Europe) S.à r.l., 6 route de Trèves, L-2633 Senningerberg, Grand Duchy of Luxembourg, R.C.S. Luxembourg B27900, corporate capital EUR 10.000.000. This communication is issued in the UK by JPMorgan Asset Management (UK) Limited, which is authorised and regulated by the Financial Conduct Authority. Registered in England No. 01161446. Registered address: 25 Bank Street, Canary Wharf, London E14 5JP.

    Nexus: 099e222811153229
    Image sources: Shutterstock, Getty

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