JPMorgan Emerging Markets Debt Fund earns an Above Average Process Pillar rating.
The most important driver of the rating is its parent firm's excellent long-term risk-adjusted performance, as shown by the firm's average 10-year Morningstar Rating of 3.3 stars. The parent firm's five-year risk-adjusted success ratio of 55% also supports the rating. 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. Their respectable success ratio suggests that the firm does well for investors and that this fund may benefit from that.
Compared with other funds in the Emerging Markets Bond Morningstar Category, this fund, historically, hews closely to peers' credit and interest-rate sensitivity 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 significantly 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 overallocation to debt with 20- to 30-year maturities over the past few years. Compared with category peers, the strategy had more exposure to debt with 20- to 30-year maturities in the most recent month. Finally, during the past few years, the fund leaned away from corporate debt. In recent months, the strategy also had less exposure to corporate bonds compared to its peers.
This strategy's 12-month yield is 5.9%, lower than its average peers' 6.1%. Plus, its 30-day SEC yield (a standardized, point-in-time estimate of the fund’s future income return) sits at 6.5%. While a lower yield may deliver less income, it also tends to indicate lower credit risk. But that isn't always the case. Over the past 12 months, the average yield of the fund has been lower than the average yield of its Morningstar Category peers. The portfolio has a lower average surveyed credit quality of B, compared with the typical peers' BB and 64% of the fund's assets are rated non-investment-grade, compared to its peers' 50%. Strategies with more credit risk may have a higher return, but they are riskier.