JPMorgan Total Return’s flexibility to differ from its benchmark and other intermediate core-plus bond Morningstar Category peers hasn’t stood out in recent years. It earns a Morningstar Analyst Rating of Neutral across most shares and Negative for its most expensive.
Bill Eigen leads the fund’s lean, albeit veteran, six-person Boston-based investment team. A manager on the fund since its mid-2008 inception, Eigen has had the sole reins for most of his tenure here, though he draws on longtime portfolio managers Jarred Sherman and Jeff Wheeler, who run the investment-grade credit and securitized sleeves, respectively. A macro strategist, assistant trader, and research analyst round out the team.
Eigen and his team operate outside of JPMorgan’s broader Global Fixed Income Currency & Commodities complex. They can, however, draw on those vast resources for idea generation and fundamental research and most often utilize the firm’s Indianapolis-based high yield team.
The process relies on multiple inputs and the macro assessment of Eigen, who brings a contrarian bent. He aims to maintain the foundational attributes of traditional core bonds with opportunistic allocations to riskier and less correlated sectors. This wide-ranging, flexible mandate can feature allocations to high-yield bonds, nonagency mortgage-backed securities, credit default swaps, and long-short relative value strategies. However, the team has avoided junk-rated credit risk more recently and continues to remain patient for more attractive opportunities.
The fund’s dialing back risk in recent years in favor of more core-oriented bonds has caused its long-term performance to lag most peers. Over the past 10 years ended January 2023, the I shares’ 1.6% annualized return trailed the distinct peer median’s 1.8% but was just ahead of its Bloomberg US Aggregate Bond Index. And while the fund exhibited lower volatility (as measured by standard deviation) than the peer norm, its volatility-adjusted performance (as measured by Sharpe ratio) was nonetheless near the bottom quartile of rivals.
The fund’s showing amid 2022’s heightened volatility did not differ much from its long-term performance pattern. Its 16.2% calendar-year loss was not any better than its typical rival’s result.