JPMorgan Core Plus Bond Fund Class I HLIPX

JPMorgan Core Plus Bond’s managers effectively leverage the firm’s well-resourced global fixed-income platform to drive consistently strong decisions. Increased conviction in their inputs supporting portfolio decisions earns a Process upgrade to High from Above Average.

This review covers three vehicles, including a mutual fund (the oldest version to which this report applies), JPMorgan Core Plus ETF JCPB, and a collective investment trust.

A robust, proven investment process expertly combines top-down views with meticulous security selection, driving the strategy’s Process upgrade. The approach focuses on fundamental, quantitative, and technical factors and starts with JPMorgan's quarterly investment meeting, which establishes strategic macro themes. while weekly sector meetings concentrate on relative value and tactical positioning. Through robust debate, the lead managers effectively synthesize these insights to guide overall risk, duration, and curve positioning, and sector allocation. They collaborate closely with sector-focused comanagers who execute bottom-up security selection.

The managers skillfully balance characteristics of an intermediate core-bond fund with measured risk-taking in off-benchmark stakes. Various securitized debt types feature prominently, comprising 35% to 50% of assets. Instead of plain-vanilla mortgage pass-throughs, the portfolio features mortgage-backed securities pools and collateralized mortgage obligations, which meet stringent standards that protect against prepayment risk and limit duration extension. High-yield credit represents the largest non-investment-grade allocation, and the team adjusts these stakes based on its risk outlook. For example, a cautious macro view and rich valuations led the managers to trim high-yield exposure while adding to investment-grade corporates. Duration (a measure of interest rate sensitivity) normally stays within 10% of that of its benchmark.

JPMorgan’s US Fixed-Income Chief Investment Officer Key Herr leads this effort alongside multisector fixed-income veteran Andrew Norelli and relative newcomer Priya Misra. This lead trio is surrounded by proven investment talent, which includes four other comanagers with extensive experience across its vast investment platform. Rick Figuly manages the portfolio’s securitized sleeve, while Lisa Coleman and Tom Hauser oversee the investment-grade and high-yield credit sleeves, respectively. In April 2025, Coleman announced her retirement effective early 2026; in response, JPMorgan added Vikas Pathani, a high-grade corporate-bond manager who joined the firm in 2004, to the fund. The firm’s well-resourced global fixed-income platform and its network of specialists help guide macro positioning and contribute to bottom-up ideas.

The strategy touts compelling long-term results. Since Norelli's March 2014 start (as the longest-tenured nonsleeve manager), the mutual fund’s R6 shares’ 2.6% annualized return through August 2025 beat the Bloomberg US Aggregate Bond Index's 1.9% and the intermediate core-plus Morningstar Category peer median's 2.4%. The fund's yield advantage and solid security selection fueled its trailing 12-month 4.1% return through August 2025, better than nearly three-quarters of rivals.

The strategy’s proven approach relies on effective collaboration across JPMorgan’s well-resourced global fixed-income platform; higher conviction in the inputs supporting portfolio selection decisions merit a Process upgrade to High from Above Average.

The three risk allocators, Kay Herr, Andrew Norelli, and Priya Misra, take their broad cues from JPMorgan’s quarterly investment meeting, which sets macro themes for the subsequent three to six months, while weekly sector meetings focus on relative value and tactical portfolio positioning. The trio synthesizes these inputs, which focuses on fundamental, quantitative, and technical factors, to inform the portfolio’s overall risk, duration, and curve positioning, and sector allocation. Sector-focused comanagers across investment-grade credit, high-yield, and securitized debt are responsible for bottom-up security selection. These sleeve managers, who are measured against their respective internal benchmarks, have some flexibility to go off-script to reflect prevailing views and relative value opportunities; for example, attractive BBB rated corporate bonds spreads led the mangers to increase this stake to 15% in 2021 from 8% in 2020, despite the investment-grade corporate sleeve’s higher-quality internal benchmark, the Bloomberg US Corporate A3 or Better Index.

The portfolio runs more credit risk than its Bloomberg US Aggregate Bond Index, holding up to 30% in non-investment-grade bonds. Below-investment-grade-rated corporates, typically between 5% and 25% of assets, commercial MBS (up to 15%), and nonagency MBS and asset-backed securities (each up to 10%) make up most of this allocation. The managers keep a tight band around duration, typically within 10% of the benchmark’s.

These off-benchmark sectors and the strategy’s value-driven approach help the team adjust risk and drive asset allocation.

Various securitized debt types feature prominently here. Agency MBS normally make up about half of the 35%-50% in securitized assets, while nonagency MBS, commercial MBS, and ABS round out the allocation. By comparison, the benchmark’s approximately 30% in securitized bonds is mostly plain-vanilla agency MBS pass-throughs. This team takes a different approach, focusing on specified MBS pools, call-protected CMBS, and ABS, which meet their stringent standards and helps protect against prepayment risk and duration extension.

Investment-grade bonds anchor the core of this portfolio, yet its off-benchmark stakes drive its risk profile and excess returns. High-yield credit still makes up the largest allocation to non-investment-grade bonds, but the fund’s 13% of assets in late 2021 fell steadily to about 8% ending June 2025, reflecting economic caution and rich valuations. However, better relative value in spread sectors like agency MBS, ABS, and investment-grade corporates has led to higher allocations in these areas.

The managers normally limit overall duration bets yet make modest yield curve adjustments. In 2022, when inflation concerns caused long-term yields to rise, the managers adjusted the portfolio’s duration to 0.3 years shorter than that of its index in September from 0.1 year short six months before, which drove outperformance during the calendar year. More recently, the strategy’s duration has remained elevated versus the benchmark, but more dynamic markets have seen more frequent adjustments. June 2025’s portfolio’s 6.1-year duration was slightly longer than the index, with a steepening bias, given the potential for future federal-funds rate cuts.

The comanagers effectively leverage the global fixed-income platform’s depth of talent and ability; the strategy’s Above Average People Pillar rating reflects the investment team’s experience, collaboration, and alignment with investors.

Kay Herr, the firm’s US fixed-income chief investment officer, leads the strategy’s seven named managers, three of whom make overall asset-allocation decisions while four manage three distinct sleeves. In April 2025, the firm announced that Lisa Coleman, the investment-grade corporate-bond sleeve manager, will retire in March 2026. At the same time, they named Vikas Pathani as comanager to replace Coleman; his more than two decades with the firm demonstrates JPMorgan’s depth of talent to facilitate a seamless transition.

Day-to-day management falls to Herr, Priya Misra, and Andrew Norelli, the longest-tenured nonsleeve manager. Both Herr and Misra bring considerable industry accomplishments to their respective roles, yet their management experience is limited. Herr’s ascension to chief investment officer in October 2023 reflects her success building JPMorgan’s fixed-income research teams and ability to lead a world-class bond shop. Misra has been in the industry for more than two decades and was head of global rates strategy at TD Securities before joining JPMorgan in 2023 and the fund’s roster in March 2024. Multisector bond veteran Norelli joined the strategy in 2014 and comanages JPMorgan Income.

The strategy’s sleeve comanagers are seasoned bond specialists who draw on a robust supporting cast. Rick Figuly manages the securitized sleeve (roughly 40% of assets) and has been on the fund since 2006. Coleman and Tom Hauser joined in July 2020 to oversee the investment-grade (20%) and high-yield credit sleeves (10%), respectively. This group doesn’t want for resources. Alongside the comanagers, the firm’s large global fixed-income, currency and commodities platform and its network of fixed-income specialists help guide macro positioning and contribute to bottom-up ideas.

Investor alignment with investors is strong. Herr and Norelli each invest at least USD 1 million in the strategy and Misra at least USD 200,000.

J.P. Morgan continues to build a track record of strong stewardship, supporting a Parent rating upgrade to High from Above Average.

With more than USD 4 trillion in assets under management (including USD 1.3 trillion in money market funds) and a broad reach, J.P. Morgan is among the largest active asset managers in the US, Europe, and Asia. Although some multi-asset offerings have struggled over the past five years, prompting new leadership to make changes to investment teams, its equity and fixed-income teams boast long-tenured portfolio managers who practice repeatable investment processes that have generally produced strong long-term results. Most of its funds are core building blocks with long lifetimes, though its lineup around the world also includes more-specialized options: Two options-based equity-income exchange-traded funds, launched in 2020 and 2022, are now among the firm’s largest. J.P. Morgan has been an early mover in offering active ETFs, having converted 12 of its open-end mutual funds to the structure and launching others. It isn’t always at the forefront of emerging trends. While it has filed registration statements with the Securities and Exchange Commission for an interval fund and an ETF investing in private markets, it hasn’t yet introduced such an option for all investors, whether on its own or in partnership with another asset manager, unlike some of its closest competitors.

To support the firm’s diverse investment offerings, J.P. Morgan has invested heavily in both portfolio management tools and its client organization. Over the past 10 years, the firm has developed robust proprietary technology with advanced analytics and broad buy-in from investment analysts, portfolio traders, and portfolio managers, all of whom have easy access to the platform. The firm also stands apart for its demonstrated commitment to clients. In the early 2000s, J.P. Morgan began pivoting its engagement with financial advisors to adopt a more consultative approach, supported by its sought-after Guide to the Markets research series that focuses on investor education, not product pitches. This perspective can help clients stay the course, supporting positive investor outcomes.

Incentives reinforce alignment with fundholders. Beginning more than 10 years ago, investment team compensation is tied to three-, five-, and 10-year performance, and portfolio managers must invest at least half of their deferred compensation in J.P. Morgan strategies. Many firms encourage portfolio managers to invest alongside fundholders, but J.P. Morgan goes a step further in requiring client-facing individuals to invest substantial portions of their incentive compensation in the funds.

Although some funds still face high cost hurdles, more than half of share classes charge competitive fees relative to peers.

The strategy’s resilience in down markets contributes to its compelling long-term performance. Manager Kay Herr’s two-year stint as the lead is too short to evaluate effectively. Since Andrew Norelli’s March 2014 start, making him the longest-tenured nonsleeve manager, the mutual fund’s R6 shares’ 2.6% annualized return through August 2025 beat the Bloomberg US Aggregate Bond Index’s 1.9% and its distinct intermediate core-plus category’s median 2.4%. This result was better than two-thirds of peers, while its Sharpe ratio, a measure of excess return relative to excess standard deviation, was even better.

In line with its strong risk-adjusted results, the strategy has held up better in stress markets than most peers. For example, during 2022’s first quarter and start of the Russia-Ukraine war, the fund’s 5.4% loss was less severe than its median peer’s 5.8% drop; at the beginning of 2020’s coronavirus-driven pandemic, its 2.8% loss was better than 70.0% of its rivals.

Amid inflation concerns and rising yields in 2022, the fund’s shorter-than-index duration profile helped its calendar-year 12.7% loss hold up better than about 70.0% of peers. However, the managers’ 2023 recessionary outlook and view that long-term yields would fall led them to increase interest rate risk, and the portfolio’s longer-than-index duration kept its 6.3% gain for the year slightly below its median peer. Over the trailing 12 months ended August 2025, though, strong security selection in securitized sectors helped fuel a 4.1% return, 35 basis points better than its peer median.

JPMorgan Core Plus Bond I's Prospectus Adjusted Expense Ratio is 0.46% per year. It places it in the second-cheapest quintile of the Morningstar US Fund Intermediate Core-Plus Bond Category, where the median fee is 0.62% per year. This cost positioning translates into a Medalist Rating Price Score of 0.93, which reflects its relative price positioning within the category. The Price Score ranges from -2.50 (most expensive) to +2.50 (cheapest), with higher scores indicating better cost competitiveness.