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JPMorgan Income Builder A JNBAX

Medalist Rating as of | See JPMorgan Investment Hub
  • NAV / 1-Day Return 9.64  /  +0.21 %
  • Total Assets 8.9 Bil
  • Adj. Expense Ratio
    0.750%
  • Expense Ratio 0.750%
  • Distribution Fee Level Low
  • Share Class Type Front Load
  • Category Moderately Conservative Allocation
  • Investment Style Large Value
  • Credit Quality / Interest Rate Sensitivity
  • Status Open
  • TTM Yield 4.99%
  • Turnover 48%

USD | NAV as of Feb 23, 2024 | 1-Day Return as of Feb 23, 2024, 11:54 PM GMT+0

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Morningstar’s Analysis JNBAX

Medalist rating as of .

An income orientation shapes this flexible offering.

Our research team assigns Bronze ratings to strategies they’re confident will outperform a relevant index, or most peers, over a market cycle on a risk-adjusted basis.

An income orientation shapes this flexible offering.

Associate Director Emory Zink

Emory Zink

Associate Director

Summary

Veteran contributors with access to well-resourced research and risk cohorts shrewdly position JPMorgan Multi-Asset Income to do what the strategy’s name suggests. JPMorgan Income Builder (mutual fund) receives renewed Morningstar Analyst Ratings of Neutral, Bronze, and Silver for its C, A, and R6 share classes, respectively, and a downgrade of its institutional shares to Bronze from Silver, driven by category context. JPMorgan Multi Income (Hong Kong Unit Trust) receives renewed Neutrals and Bronzes across share classes. JPMorgan Global Income (SICAV) receives renewed ratings that range from Neutral to Silver. JPMorgan Multi-Asset Income (OEIC) receives renewed Bronzes and Silvers across share classes.

The portfolio managers are experienced and collaborative. Michael Schoenhaut (who has been with the strategy since its first vehicle, the mutual fund, debuted in mid-2007), Eric Bernbaum (appointed to the roster in 2014), and Gary Herbert (an early 2021 addition) serve as portfolio managers across all four vehicles. Jeff Geller and Leon Goldfeld serve as a fourth manager on the mutual fund and the Hong Kong Unit Trust, respectively. Though Schoenhaut and Bernbaum are responsible for the dynamic asset allocation, they delegate managing the underlying sleeves (22 as of February 2023) to seasoned experts from across the firm’s many specialized investment cohorts.

This is a highly flexible mandate. Up to 100% of the portfolio may be fixed income, though below-investment-grade debt won’t exceed 70%. Equities may reach 60%, and the team may hold up to 25% in a combination of convertible and preferred securities. There are no limits to regional exposures, though currency hedges differ depending on the regional vehicle. Mainstay sleeves include developed-markets equity (U.S. and international), U.S. high yield, and emerging-markets debt and equity.

Across all four strategy vehicles discussed, from their respective inceptions through 2022, each has kept pace or outperformed its typical Morningstar Category peer in more than half of its relevant calendar years. Still, this is an income-focused offering, and relative to peers, the portfolio can court more volatility in pursuit of that aim. But for a patient investor willing to endure rough patches, longer-term prospects remain compelling.

Rated on Published on

The approach to these portfolios is thoughtful, disciplined, and risk-aware within the context of their income-generating mandate and continues to merit an Above Average Process rating.

Associate Director Emory Zink

Emory Zink

Associate Director

Process

Above Average

Day-to-day co-leads Michael Schoenhaut and Eric Bernbaum collaborate closely with experts from across the firm’s well-resourced asset-focused teams to surface compelling investment ideas and combine them into a risk-aware portfolio that maintains capital and pays out income on a periodic schedule. Though the duo is responsible for the dynamic asset allocation, they delegate—with regular check-ins and guidance—managing the 22 underlying sleeves (as of February 2023) to sector experts at the firm.

The mandate is flexible. Up to 100% of the portfolio may be fixed income, though below-investment-grade debt won’t exceed 70%. Equities may reach 60%, and the team may hold up to 25% in a combination of convertible and preferred securities. There are no limits to regional exposures. Currency exposures vary depending on the structure. For the mutual fund, up to 25% of foreign equity exposure can be in non-U.S. dollar currencies. In the case of the Hong Kong Unit Trust, SICAV, and OEIC, all foreign currency exposures are hedged back to U.S. dollars, euros, and pounds, respectively, except for emerging-markets currency exposures. Over the prior decade ended February 2023, this flexibility has generated a 12-month yield on each of these offerings that averaged roughly 4%-5%.

Modest differences exist across portfolios given the structural specificities of regional vehicles. The following description references the mutual fund, which has the longest record of the portfolios discussed here.

U.S. high yield bonds are one of the fund’s largest dedicated allocations, and as of January 2023 (portfolio date unless otherwise noted) these accounted for 23% of assets, on the lower end of its historical range since the vehicle’s 2007 inception. But the team has been nimble, generally allocating more to high yield when the timing is right. Following the 2008 financial crisis, Michael Schoenhaut took advantage of battered prices and increased high yield to a peak of 54% in the first half of 2009, benefiting from the subsequent recovery in the asset class. Bank loans reached 4% of the portfolio as of late 2018 but are now a modest 1%. Nonagency securitized debt has ranged from 0% to 13.5% of the portfolio since inception and now sits at 9.5%. Investment-grade U.S. fixed income has reached 10.2% of the portfolio since its inception but sits at 3.8% now.

Emerging markets (both debt and equity) contribute to the profile here; combined, they have occupied anywhere from 5.3% to 19.1% of the portfolio but currently sit at a modest 7.3%. Developed international equity exposure and U.S. equity exposure have reached highs of 25.1% and 17.0%, respectively, over the years, but clock in at 9.5% and 9.7%. Other noteworthy exposures include 2.2% in global REITs, 2.8% in global infrastructure, and a 7.3% sleeve dedicated to covered calls.

Rated on Published on

Seasoned portfolio managers with access to the firm’s expansive resources — which boast breadth and depth across sectors and risk types — provide an edge to this complex offering and support a People Pillar rating of Above Average.

Associate Director Emory Zink

Emory Zink

Associate Director

People

Above Average

The portfolio managers are experienced and collaborative. Michael Schoenhaut (who has been with the strategy since its first vehicle, the mutual fund, debuted in mid-2007), Eric Bernbaum (appointed to the roster in 2014), and Gary Herbert (an early 2021 addition) serve as portfolio managers across all four vehicles. Jeff Geller, a co-CIO of JPMorgan’s broader multi-asset group, and Leon Goldfeld, serve as a fourth manager on the mutual fund and the Hong Kong Unit Trust, respectively. Herbert, who functioned as head of global credit at Brandywine before joining here, is involved in global tactical asset allocation for the firm and serves alongside Geller as a co-CIO.

Schoenhaut and Bernbaum curate the portfolio overall, but asset-class experts helm the underlying sleeves. At the strategy’s 2007 inception, there were five sleeves, but as the portfolio has diversified in its searches for risk-aware yield opportunities, that number has grown to 22, run by 20 individuals (one manager runs both a global equity and a global infrastructure sleeve and the broader multi-asset team owns the covered-call sleeve). In 2018 and 2019, an uptick in reconfigured sleeve leads gave pause, but that has since calmed.

Rated on Published on

A well-resourced, thoughtful, and disciplined steward of client assets, JPMorgan Asset Management maintains an Above Average Parent rating.

Associate Director Emory Zink

Emory Zink

Associate Director

Parent

Above Average

As of 2022, this investment stalwart manages more than USD 2.5 trillion in AUM. Composed of various global cohorts and diverse asset classes, the firm has more tightly integrated its capabilities in recent years, notably through the development of proprietary analytical and risk systems. Investment teams are robustly staffed and helmed by seasoned contributors. The firm’s strategies tend to produce reliable portfolios, and several flagship offerings are Morningstar Medalists. Manager incentives align with fundholders'; compensation reflects longer-term performance factors, and portfolio managers invest in the firm’s strategies as part of their compensation plans.

The firm’s funds tend to be well-priced, but they aren’t as competitive as many highly regarded peers of similar scale. Recent product launches include thematic and single-country strategies, both of which carry the potential for volatile performance and flows, along with misuse by investors. The firm remains intrepid when it comes to developing an environmental, social, and governance-focused framework and continues to move into other areas such as direct indexing through its 55iP acquisition and China through its joint venture, but these complicated initiatives take time to assess any real and lasting effect.

Rated on Published on

The mutual fund has the longest record(June 2007 through February 2023) within this strategy’s umbrella, and its R6 shares are described in the following performance profile.

Associate Director Emory Zink

Emory Zink

Associate Director

Performance

Since inception, the R6 shares generated a 4.8% annualized return that is higher than either the 4.4% return of its Morningstar US Moderately Conservative Target Risk category benchmark or the 3.5% return of its typical peer in the allocation — 30% to 50% equity category. The strategy’s volatility over that same period is higher than those two comparative points, and the resulting risk-adjusted return(as measured by Sharpe ratio) modestly outsteps the typical category peer but trails the category benchmark.

Relative to the category, the profile here is more adventurous with junk bonds and emerging-markets exposures, characteristics that can fuel volatility during stressed markets. For example, the portfolio held 14.1% in emerging markets (debt and equity) at the start of April 2018, more than double the exposure of its typical category peer.

Over the subsequent five months, as emerging markets came under pressure, the strategy reduced its position, but the 1.6% return of its R6 shares over that period trailed the 2.5% of its typical peer. And when 2020’s pandemic panic roiled markets (Feb. 20-March 23), those same shares lost 23.5%, more than the category benchmark’s 16.1% loss or its typical peer’s 20.4% loss.

Published on

It’s critical to evaluate expenses, as they come directly out of returns.

Associate Director Emory Zink

Emory Zink

Associate Director

Price

Based on our assessment of the fund’s People, Process, and Parent pillars in the context of these expenses, we think this share class will be able to deliver positive alpha relative to the category benchmark index, explaining its Morningstar Analyst Rating of Bronze.

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Portfolio Holdings JNBAX

  • Current Portfolio Date
  • Equity Holdings
  • Bond Holdings
  • Other Holdings
  • % Assets in Top 10 Holdings 12.8
Top 10 Holdings
% Portfolio Weight
Market Value USD
Sector

JPMorgan Equity Premium Income ETF

6.48 576.6 Mil

JPMorgan Nasdaq Equity Premium Inc ETF

2.22 197.4 Mil

JPMorgan Prime Money Market Inst

1.77 158.0 Mil
Cash and Equivalents

United States Treasury Notes 4.125%

0.95 84.3 Mil
Government

JPMorgan Income ETF

0.50 44.1 Mil

AbbVie Inc

0.49 43.7 Mil
Healthcare

Exxon Mobil Corp

0.47 41.6 Mil
Energy

Taiwan Semiconductor Manufacturing Co Ltd

0.46 40.8 Mil
Technology

Coca-Cola Co

0.44 39.5 Mil
Consumer Defensive

Samsung Electronics Co Ltd

0.42 37.5 Mil
Technology