JPMorgan California Tax Free Bond Fund earns an Above Average Process Pillar rating.
The primary contributor to the rating is the parent firm's five-year risk-adjusted success ratio of 57%. The measure indicates the percentage of a firm's funds that survived and outperformed their respective category's median Morningstar Risk-Adjusted Return for the period. The parent firm's impressive risk-adjusted performance, as shown by its average 10-year Morningstar Rating of 3.3 stars, also influences the rating. Lastly, the process is limited by the fund's weak long-term risk-adjusted performance. This can be seen in its five-year information ratio calculated relative to the category index, which suggests that the process has struggled over that period.
Compared with other funds in the Muni California Intermediate Morningstar Category, this fund takes on lower credit risk. But in terms of long-term interest-rate sensitivity, it hews closely to its average peer over the past few years. Opening the analysis to additional factors, the portfolio has displayed biases over time, whether towards or away from certain fixed-income instruments. Relative to the average strategy in the category, the managers have been underweight A rated bonds in recent years. In the latest month, the strategy has also relatively underweighted A rated bonds compared with Morningstar Category peers. Additionally, there's been a notable bias towards debt with 10- to 15-year maturities over the past few years. Compared with category peers, the strategy had more exposure to debt with 10- to 15-year maturities in the most recent month. Finally, during the past few years, the fund leaned away from corporate bonds. Nevertheless, the fund's corporate bonds exposure was in line with peers in the latest month.
This strategy has a modest 1.9% 12-month yield, lower than its average peers' 2.6%. Plus, its 30-day SEC yield (a measure similar to yield-to-maturity) sits at 2.1%. A lower yield tends to indicate lower credit risk. The portfolio has a higher average surveyed credit quality of AA, compared with the typical peers' A, and it holds no non-investment-grade assets, similar to its peers' average. Strategies that take on less credit risk can often shoulder more-adverse market conditions.