JPMorgan Core Plus Bond Fund - R6 - J.P. Morgan Asset Management
CLOSE

JPMORGAN CORE PLUS BOND FUND

Enhance your core.

The Core Plus Bond Fund expands opportunities for returns and income by combining a broad foundation of high quality core bonds with dynamic sector allocation and a macro overlay.

Fund Story  

Key Points

Expertise
  • Draws on the best ideas of the entirety of J.P. Morgan’s Fixed Income platform across a wide investable universe.
Portfolio
  • Integration of bottom-up security selection with top-down analysis improves potential for attractive risk-adjusted returns and increased income.
Success
  • Top-quintile performance and risk-adjusted returns for the three-, five- and 10-year periods, with a compelling SEC yield of 2.87%.1
COMPETITIVE RISK-ADJUSTED RETURNS AND YIELD

Chart source: Morningstar as of 9/30/17. Shown for illustrative purposes only. Past performance is no guarantee of future returns.

1I Shares:Morningstar as of 9/30/17. Ranked: 1-yr. (328/985), 3-yrs. (159/852), 5-yrs. (90/773) and 10-yrs. (80/546). Sharpe Ratio measures a manager’s excess return over the risk-free rate of return (normally the cash return), divided by the standard deviation; 1 yr. (339/1012), 3-yrs. (149/946), 5-yrs. (76/914) and 10-yrs. (80/790). Ratings reflect risk-adjusted performance. Different share classes may have different ratings and rankings. Yield: 2.67% SEC yield (unsubsidized) as of 9/30/17. Must be preceded or accompanied by a prospectus.

 

The advantages of a core plus diversifier

Andrew Norelli | February 23, 2016

Andrew Norelli, portfolio manager, says that if the riskier portions of a portfolio go down, a Core Plus Diversifier provides investors with ballast by using a thoughtful yield enhancement process.

Performance

Performance widget loading ...

Commentary

As of September 30, 2017

Quarter in review
  • The JPMorgan Core Plus Bond Fund (I Class Shares) outperformed the benchmark, the Bloomberg Barclays Capital U.S. Aggregate Index, for the quarter ended September 30, 2017.
  • An out-of-benchmark allocation to upper-tier high yield added to returns as below-investment-grade securities prevailed over investment grade.
  • The Fund’s underweight to Treasuries was positive as spread product outperformed. Benchmark Treasuries underperformed other broad U.S. investment-grade sectors according to Bloomberg/Barclays.
  • A slightly 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.
  • 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
  • An environment of reasonable growth, low inflation and continued central bank accommodation should be supportive for risk assets in the near term.
  • We continue to invest opportunistically in high-yield and emerging markets debt.
  • 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.
  • Duration and curve positioning will continue to be managed opportunistically. The portfolio typically stays within plus or minus 10% of benchmark duration.

Fees and Minimums

Fees widget loading ...

Portfolio

Portfolio widget loading ...

Management

Fund Managers

Documents

Disclaimer

Fund exposure may be more or less than 100%.

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, 0.46% for I Shares, 0.49% for L Shares, 1.15% for R2 Shares, 0.90% for R3 Shares, 0.65% for R4 Shares, 0.50% for R5 Shares, 0.40% for R6 Shares and 0.75% for T 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 6/30/2018 for A Shares, 6/30/2018 for C Shares, 6/30/2018 for I Shares, 6/30/2018 for L Shares, 6/30/2018 for R2 Shares, 6/30/2018 for R3 Shares, 6/30/2018 for R4 Shares, 6/30/2018 for R5 Shares, 6/30/2018 for R6 Shares and 6/30/2018 for T 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.

The quoted performance of the Fund includes performance of a predecessor fund/share class prior to the Fund's commencement of operations. Please refer to the current prospectus for further information.

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 Plus 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.

Effective November 22, 2017, the calendar year performance of the R3 and R6 share classes, prior to the inception of each share class, were recalculated to take into consideration the expenses of the respective share class.

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.

CMOs are collateralized mortgage obligations, which are issued in multiple classes, and each class may have its own interest rate and/or final payment date. A class with an earlier final payment date may have certain preferences in receiving principal payments or earning interest. As a result, the value of some classes may be more volatile and may be subject to higher risk of nonpayment.

Securities rated below investment grade are considered "high-yield," "non-investment grade," "below investment-grade," or "junk bonds." They generally are rated in the fifth or lower rating categories of Standard & Poor's and Moody's Investors Service. Although they can provide higher yields than higher rated securities, they can carry greater risk.

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.

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.
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.