Emory Zink: JPMorgan Core Bond is an intermediate-term core bond fund with a differentiated profile. While the portfolio holds U.S. Treasuries, corporate credit, and asset-backed securities, the team has a penchant for mortgages--agency and nonagency flavors as either collateralized mortgage obligations or traditional pass-throughs. This makes sense given that the modus operandi for its team is fundamental valuation of cash flows. A combination of proprietary models and the insight of seasoned sector specialists inform bottom-up analysis of each holding. The three comanagers--Barb Miller, Rick Figuly, and Justin Rucker--then sift through these recommendations and assemble a portfolio that considers relative value amongst sectors and attractively priced investment-grade bonds that the team expects to hold until maturity. Duration calls are modest, and ultimately, the fund’s high-quality low-turnover profile is structured with a risk-adjusted experience as its aim over longer periods of observation.
The team’s shrewd selection of bonds, coupled with defensive positioning, has generated an edge. The fund’s 4.4% annualized 15-year return ended April 2019 outstepped its Bloomberg Barclays U.S. Aggregate Bond Index and the median of a cohort of distinct intermediate-term core bond Morningstar Category peers.
With its broad resources, low fees, and compelling risk-adjusted return profile, JPMorgan Core Bond receives a Morningstar Analyst Rating of Silver.