JPMorgan Income Fund harvests high conviction ideas across the bond universe, covering both traditional and extended sectors, and aims to deliver a wider source of income.
WHAT ARE YOUR TOP 3 CONCERNS?Q1
WHAT MACRO SIGNALS ARE YOU ON THE LOOKOUT FOR1?
- Risk sentiment continued to improve in May 2020 despite weak economic data. Markets were supported by rounds of central bank actions. Signs of lower infection rates – particularly in Europe – and a gradual loosening of mobility restrictions across the globe also helped. Nonetheless, we are mindful of the possible threat of a second wave of infections.
- Dislocations in bond sectors after the March 2020 sell-off has opened up buying opportunities for active managers. Quality and business resilience are key to picking the right bonds to invest in during an uncertain environment.
- Focusing on sectors that central banks are investing to seek quality yield. For example, US Treasury and investment-grade corporate bonds are included in central banks’ expanded bond purchase programmes.
HOW ARE YOU TACKLING RISING CONCERNS ON DEFAULT RISK IN HIGH-YIELD CREDIT2?
- We are focused on non-cyclical sectors that are expected to hold up well in a stressed environment such as media, telecoms, healthcare and consumer goods.
- It has become more important ever to be highly selective, especially in cyclical sectors and those with structural weaknesses such as retail and energy.
- As we look ahead, it’s important for investors to maintain a keen focus on fundamentals. Although we continue to have selective exposure to high yield in the Strategy, we remain defensive on the sector.
HOW ARE YOU HEDGING YOUR SECURITISED3 EXPOSURE AS US RECESSION RISK RISES1?
- We currently have exposure to a broad mixture of US securitised assets which provide important diversification4 to our portfolio.
- Within our portfolio, about 40%5 are securitised exposure, half of that are in sectors that are directly or indirectly supported by the US Federal Reserve, e.g. agency mortgage-backed securities (MBS) and agency commercial mortgage backed securities.
- The other 20%5 is split across non-agency residential MBS, commercial MBS and asset-backed securities.
WHY INVEST IN JPMORGAN INCOME FUND^Healthy Yield
The global bond market has grown to about US$110 trillion# and offers a wider range of income sources. With flexibility across sectors and geographies, the Fund endeavours to generate consistent yield under different market conditions.
Healthy yield with lower volatility than individual sectors+
Striving to make portfolio income a viable outcome, the Fund seeks high conviction ideas dynamically across both traditional and extended sectors to navigate changing market conditions.
A wide spectrum of fixed income sectors##
There are various types of bonds globally and they react differently to market changes such as interest rate movement. Diversification* by investing across multiple fixed income sectors could enable the Fund to stay resilient under different market conditions.
In times of uncertainty, the Fund had performed better compared with pure equities or pure high-yield bonds.
Genuine diversification* to achieve resilience amid volatility**
Our Fixed Income Capabilities
assets under management (AUM)2
ALL YOU NEED TO KNOW ABOUT JPMORGAN INCOME FUND
BACK TO BASICS
Understand basic investing principles and fixed income sectors that are relevant to JPMorgan Income Fund.
Find out our latest thinking on the fixed income market and how that will change our positioning.
Deep-dive into longer-term macro trends and how that could impact JPMorgan Income Fund.