JPMorgan Core Bond Fund - A - J.P. Morgan Asset Management
CLOSE

JPMORGAN CORE BOND FUND

Quality at the Core.

A value-driven approach that emphasizes intermediate bonds of the highest quality, the Core Bond Fund serves as a foundation for investors seeking a well-diversified portfolio.

Fund Story  

Key Points

Expertise
  • Managed by a well-seasoned team of investors with an average of over 20 years industry experience.
Portfolio
  • Uses bottom-up security selection to construct a portfolio of high-quality U.S. investment grade bonds.
Success
  • Fund’s negative correlation to equities is lower than 97% of peers, making it an effective diversifier
  • Portfolio has provided stability with a track record of consistent returns in challenging markets (+4% in ‘08)
10-YEAR RISK-ADJUSTED RETURNS AND VOLATILITY

Chart source: Morningstar as of 9/30/17. Benchmark: Bloomberg Barclays U.S. Aggregate Index. Sharpe ratio is a measurement of a fund’s returns relative to its risks. Higher numbers for risk-adjusted returns are better.

Performance

Performance widget loading ...

Commentary

As of September 30, 2017

Quarter in review
  • The JPMorgan Core Bond Fund (I Class Shares) underperformed the benchmark, the Bloomberg Barclays Capital U.S. Aggregate Index, for the quarter ended September 30, 2017.
  • The Fund’s underweight to Treasuries was positive as spreads compressed and spread product outperformed. Benchmark Treasuries underperformed other broad U.S. investment-grade sectors, according to Bloomberg/Barclays.
  • A small overweight to corporate bonds helped performance as the sector’s higher spread duration propelled performance upward. Security selection within the sector was also positive.
  • A lower duration benefited the portfolio at the margin. Two-, five-, and 10-year bellwether Treasury yields rose 10, 5, and 2 basis points in the third quarter.
  • On overweight to asset-backed securities was a headwind. The sector was among the worst performers on an absolute basis along with U.S. Treasury and Agency securities. Positive security selection in the sector was an offsetting factor.
  • An underweight to investment-grade dollar-denominated Sovereigns was negative for the portfolio. Sovereigns make up only 1.0% of benchmark securities but were the best-performing sub-sector in the benchmark.
  • A small cash position was negative in a quarter when longer-term bonds had better-than-cash returns. The team uses cash as a source of liquidity and to help manage duration.
Looking ahead
  • Reasonable economic growth paired with an active Federal Open Market Committee may push rates higher.
  • We expect to maintain a slightly shorter duration than the benchmark with a marginal overweight to the belly of the curve.
  • Within the structured markets we seek to add securities with stable cash flows and attractive convexity profiles. We find value in longer-duration agency commercial mortgage-backed securities as well as in shorter-duration consumer credit securities.
  • In the credit market we plan to take advantage of new issue concessions when opportunities present themselves. Financials is among the sectors where we are finding value given the new economic and monetary backdrop.

Fees and Minimums

Fees widget loading ...

Portfolio

Portfolio widget loading ...

Management

Fund Managers

Documents

Disclaimer

1Please refer to the prospectus for additional information about cut-off times.

Total return assumes reinvestment of income.

The Fund's adviser and/or its affiliates have contractually agreed to waive fees and/or reimburse expenses to the extent Total Annual Fund Operating Expenses (excluding acquired fund fees and expenses, dividend and interest expenses related to short sales, interest, taxes, expenses related to litigation and potential litigation and extraordinary expenses) exceed 0.75% for A Shares, 1.40% for C Shares, 0.50% for I Shares, 1.10% for R2 Shares, 0.85% for R3 Shares, 0.60% for R4 Shares, 0.45% for R5 Shares and 0.35% for R6 Shares of the average daily net assets. The Fund may invest in one or more money market funds advised by the adviser or its affiliates (affiliated money market funds). The Fund's adviser has contractually agreed to waive fees and/or reimburse expenses in an amount sufficient to offset the fees and expenses of the affiliated money market funds incurred by the Fund because of the Fund's investment in such money market funds. This waiver is in effect through 10/31/2018 for A Shares, 10/31/2018 for C Shares, 10/31/2018 for I Shares, 10/31/2018 for R2 Shares, 10/31/2018 for R3 Shares, 10/31/2018 for R4 Shares, 10/31/2018 for R5 Shares and 10/31/2018 for R6 Shares, at which time the adviser and/or its affiliates will determine whether to renew or revise it. The difference between net and gross fees includes all applicable fee waivers and expense reimbursements.

Mutual funds have fees that reduce their performance: indexes do not. You cannot invest directly in an index.

The Bloomberg Barclays U.S. Aggregate Index is an unmanaged index representing SEC-registered taxable and dollar denominated securities. It covers the U.S. investment grade fixed rate bond market, with index components for government and corporate securities, mortgage pass-through, and asset-backed securities.

The performance of the Lipper Core Bond Funds Index includes expenses associated with a mutual fund, such as investment management fees. These expenses are not identical to the expenses charged by the Fund.

Total return figures (for the fund and any index quoted) assume payment of fees and reinvestment of dividends (after the highest applicable foreign withholding tax) and distributions. Without fee waivers, fund returns would have been lower. Due to rounding, some values may not total 100%.

©2017, American Bankers Association, CUSIP Database provided by the Standard & Poor's CUSIP Service Bureau, a division of The McGraw-Hill Companies, Inc. All rights reserved.
The Morningstar RatingTM for funds, or "star rating", is calculated for managed products (including mutual funds, variable annuity and variable life subaccounts, exchange-traded funds, closed-end funds, and separate accounts) with at least a three-year history. Exchange traded funds and open-ended mutual funds are considered a single population for comparative purposes. It is calculated based on a Morningstar Risk-Adjusted Return measure that accounts for variation in a managed product's monthly excess performance, placing more emphasis on downward variations and rewarding consistent performance. The top 10% of products in each product category receive 5 stars, the next 22.5% receive 4 stars, the next 35% receive 3 stars, the next 22.5% receive 2 stars, and the bottom 10% receive 1 star. The Overall Morningstar Rating for a managed product is derived from a weighted average of the performance figures associated with its three-, five-, and 10-year (if applicable) Morningstar Rating metrics. The weights are: 100% three-year rating for 36-59 months of total returns, 60% five-year rating/40% three-year rating for 60-119 months of total returns, and 50% 10- year rating/30% five-year rating/20% three-year rating for 120 or more months of total returns. While the 10-year overall star rating formula seems to give the most weight to the 10-year period, the most recent three-year period actually has the greatest impact because it is included in all three rating periods.Rankings do not take sales loads into account.
The following risks could cause the fund to lose money or perform more poorly than other investments. For more complete risk information, see the prospectus.

Investments in bonds and other debt securities will change in value based on changes in interest rates. If rates rise, the value of these investments generally drops.

Investments in derivatives may be riskier than other types of investments. They may be more sensitive to changes in economic or market conditions than other types of investments. Many derivatives create leverage, which could lead to greater volatility and losses that significantly exceed the original investment.

The value of investments in mortgage-related and asset-backed securities will be influenced by the factors affecting the housing market and the assets underlying such securities. The securities may decline in value, face valuation difficulties, become more volatile and/or become illiquid. They are also subject to prepayment risk, which occurs when mortgage holders refinance or otherwise repay their loans sooner than expected, creating an early return of principal to holders of the loans.

The Fund could experience a loss and its liquidity may be negatively impacted when selling securities to meet redemption requests by shareholders. The risk of loss increases if the redemption requests are unusually large or frequent or occur in times of overall market turmoil or declining prices. Similarly, large purchases of Fund shares may adversely affect the Fund's performance to the extent that the Fund is delayed in investing new cash and is required to maintain a larger cash position than it ordinarily would.
Total return assumes reinvestment of income.

The top 10 holdings listed reflect only the Fund's long-term investments. Short-term investments are excluded. Holdings are subject to change. The holdings listed should not be considered recommendations to purchase or sell a particular security. Each individual security is calculated as a percentage of the aggregate market value of the securities held in the Fund and does not include the use of derivative positions, where applicable.

Duration: Measures price sensitivity of fixed income securities to interest rate changes.

Average Life: The length of time the principal of a debt issue is expected to be outstanding.