JPMorgan Strategic Income Opportunities Fund - I - J.P. Morgan Asset Management


Complement your core.

Using an absolute-return-oriented approach, the Strategic Income Opportunities Fund invests flexibly across traditional, alternative and private fixed income which seeks to provide uncorrelated, low volatility returns regardless of market environment.

Fund Story   Commentary  

Key Points

  • Lead portfolio manager Bill Eigen maximizes the insights of his proven team of absolute return investors with niche market expertise.
  • With its ability to provide uncorrelated, low volatility returns, this benchmark-agnostic portfolio may act as a diversifier to traditional fixed income, a hedged credit option or an alternative strategy.
  • Historically provided strong uncorrelated returns when interest rates have been volatile and has delivered a top-decile sharpe ratio since inception.1
  • A true portfolio diversifier that complements traditional fixed income.

Chart source: J.P. Morgan Asset Management. Data as of 6/30/17. Past performance is no guarantee of future results.

1Source: Morningstar as of 6/30/17. Nontraditional Bond category. I Shares. Sharpe ratio measures a manager’s excess return over risk-free rate of return (normally cash return), divided by the standard deviation; Ranked: 1 yr. (105/351), 3-yrs. (77/278), 5-yrs. (16/190) and 10-yrs. n/a. Past performance does not guarantee future results.


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As of September 30, 2017

Month in review
  • The Federal Reserve (Fed) decision helped to reverse U.S. dollar weakness. Elsewhere, the Bank of England’s Monetary Policy Committee signaled to the market a less accommodative stance. This coordinated central bank activity reversed recent traditional fixed income gains. After August was one of the strongest months of the year fixed income, September saw a reversal as the worst month for bonds in 2017.
  • Geopolitical tensions involving North Korea remain, while in the United States, health-care reform appears to have been defeated – which may be a positive for risk assets due to a pivot in focus towards corporate and individual tax reform.
  • Commodity prices firmed due to a better outlook for global growth in addition to the impact of natural disasters disrupting operations. This will be something to monitor moving forward due to the importance of energy prices for global risk markets – including inflation expectations.
  • While volatility did pick up in the third quarter, it is still near historically low levels across all markets. In fixed income, the 10-year U.S. Treasury rate varied between 2.01% and 2.63% through September – this 62 basis point difference is the smallest since 1965, exemplifying the trading environment in the nine months. Heading into the fourth quarter, volatility remains historically low across asset classes – and as such, the Fund has moved throughout the year from an aggressive stance to a defensive posture.
Looking ahead
  • Fed officials have recently guided markets towards an additional rate hike in 2017, and the market has responded, pricing in a 70% chance of a hike in December. We also will be closely monitoring the wind-down of the Fed’s massive balance sheet, as we believe this could have impact technicals and liquidity across markets.
  • We believe the impending defeat of health-care reform in the United States may actually be a positive for risk markets, as the Trump Administration shifts to tax reform. A reduction in the corporate tax rate may continue to strengthen corporate credit fundamentals as well, while a reduction in the individual tax rate may help consumer spending, the key factor driving U.S. economic growth.
  • The recent run-up in global energy prices may have knock-on effects on consumer spending habits and importantly, inflation.
  • While the European Central Bank has yet to back off its extraordinary accommodative policy, it will be interesting to see if their stance alters in the fourth quarter. The Bank of England and the Federal Reserve have recently turned less accommodative, while growth and inflation firm in the Eurozone. A departure from their recent policy may cause global interest rates to move towards their year-to-date highs.

Fees and Minimums

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Fund Managers



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 1.00% for A Shares, 1.50% for C Shares, 0.75% for I Shares and 0.55% for R5 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 and 6/30/2018 for R5 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. Universal Index represents the U.S. Aggregate Index, the U.S. High-Yield Corporate Index, the 144A Index, the Eurodollar Index, the Emerging Markets Index, and the non-ERISA portion of the CMBS Index.

The BofA Merrill Lynch US 3-Month Treasury Bill Index is comprised of a single issue purchased at the beginning of the month and held for a full month. The index is rebalanced monthly and the issue selected is the outstanding Treasury Bill that matures closest to, but not beyond 3 months from the rebalancing date.

The performance of the Lipper Alternative Credit Focus 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.

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.

International investing bears greater risk due to social, economic, regulatory and political instability in countries in "emerging markets." This makes emerging market securities more volatile and less liquid developed market securities. Changes in exchange rates and differences in accounting and taxation policies outside the U.S. can also affect returns.

The Credit RV book is a long/short credit book which combines both traditional and derivative credit positions. This book may contain traditional IG, HY and EM cash bonds, in addition to Credit Default Swaps (both CDS and CDX), total return swaps, and other synthetic exposure. The quality breakdown will show overall exposure to various credit qualities across the fund.
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.