Collaborative contributors with access to well-resourced research and risk cohorts shrewdly position JPMorgan Income Builder to do what the strategy’s name suggests. That, coupled with greater stability across the leads on underlying portfolio sleeves, results in an upgrade of the Morningstar Analyst Rating for the Institutional and R6 shares to Silver from Bronze and an upgrade of the A shares to Bronze from Neutral. The C shares remains Neutral.
Two members of the portfolio management roster--Michael Schoenhaut and Jeff Geller--have been here since the strategy’s mid-2007 inception. Geller also serves as CIO of the firm’s multi-asset group, while Schoenhaut is in charge of the strategy’s day-to-day management alongside Eric Bernbaum, who was named here in late 2014. Gary Herbert, who joined as the firm’s head of U.S. global tactical allocation in early 2020, was appointed here in early 2021. Though Schoenhaut and Bernbaum are responsible for the dynamic asset allocation, they delegate managing the underlying sleeves (22 as of December 2021) to seasoned experts from across the firm’s many specialized investment cohorts. In 2018 and 2019, changes to the named leads on those sleeves gave pause, but turnover has since calmed and underpins an upgrade of the People rating here to Above Average.
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. Mainstay sleeves include developed-markets equity (U.S. and international), U.S. high yield, and emerging-markets debt and equity.
In eight of the 10 calendar years prior to 2022, this strategy’s Institutional shares outperformed its typical peer in the allocation - 30% to 50% equity Morningstar Category, though it bested its Morningstar US Moderately Conservative Target Allocation Index benchmark in only four of those years. 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.