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JPMorgan Preferred and Inc Scrts R6 JPDRX

Medalist Rating as of | See JPMorgan Investment Hub
  • NAV / 1-Day Return 9.52  /  +0.04 %
  • Total Assets 1.0 Bil
  • Adj. Expense Ratio
    0.550%
  • Expense Ratio 0.550%
  • Distribution Fee Level Low
  • Share Class Type Retirement, Large
  • Category Preferred Stock
  • Credit Quality / Interest Rate Sensitivity Medium/Limited
  • Min. Initial Investment 15.0 Mil
  • Status Open
  • TTM Yield 5.56%
  • Effective Duration 3.52 years

USD | NAV as of Jul 12, 2024 | 1-Day Return as of Jul 12, 2024, 11:05 PM GMT+0

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Morningstar’s Analysis JPDRX

Medalist rating as of .

A strong management team and sound investment process underpin JPMorgan Preferred and Inc Scrts R6's Morningstar Medalist Rating of Bronze.

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.

A strong management team and sound investment process underpin JPMorgan Preferred and Inc Scrts R6's Morningstar Medalist Rating of Bronze.

null Morningstar Manager Research

Morningstar Manager Research

Summary

The portfolio maintains a sizable cost advantage over competitors, priced within the lowest fee quintile among peers.

The strategy’s management team earns an Above Average People Pillar rating. The strategy's investment approach stands out and earns an Above Average Process Pillar rating. The strategy's parent organization earns the firm an Above Average Parent Pillar rating. People Pillar and Parent Pillar ratings for this strategy are indirectly assigned by a Morningstar analyst rather than algorithmically derived. Please see the notes following each pillar section for more details. The details of assigning methods can be found in each pillar section.

Rated on Published on

Morningstar's style-agnostic investment process evaluation looks for strategies that should be able to outperform their Morningstar Category index on a risk-adjusted basis over time.

null Morningstar Manager Research

Morningstar Manager Research

Process

Above Average

JPMorgan Preferred and Inc Scrts Fd earns an Above Average Process Pillar rating.

The most notable contributor to 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 strengthens the process. The measure indicates the percentage of a firm's funds that survived and beat their respective category's median Morningstar Risk-Adjusted Return for the period. Their noteworthy success ratio suggests that the firm does well for investors and that this fund may benefit from that. Lastly, the process is limited by being an actively managed strategy. Historical data, like Morningstar's Active/Passive Barometer, finds that actively managed funds have generally underperformed their passive counterparts, especially over longer time horizons.

Compared with other funds in the Preferred Stock 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. Compared with 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, the fund has exhibited a notable sector bias away from government bonds over the past few years. In the most recent month, however, the fund's exposure to government bonds was in line with the Morningstar Category average. Finally, during the past few years, the fund leaned towards debt with longer than 30-year maturities. In this month, the strategy also leaned more towards debt with longer than 30-year maturities compared with its peers.

This strategy's 12-month yield is 5.6%, lower than its average peers' 5.9%. Plus, its 30-day SEC yield (a standardized, point-in-time estimate of the fund’s future income return) sits at 5.6%. A lower yield tends to indicate lower credit risk. The portfolio has a higher average surveyed credit quality of BBB, compared with the typical peers' BB, and its non-investment-grade stake is 31% of assets, compared with its average peers' 29%. Lower-credit-risk strategies are often able to navigate bear markets more effectively.

Rated on Published on

JPMorgan Preferred and Inc Scrts Fd earns an Above Average People Pillar rating.

null Morningstar Manager Research

Morningstar Manager Research

People

Above Average

The team is backed by Lisa Coleman, the longest-tenured manager on the strategy, who brings over 25 years of listed portfolio management experience. Although the team is small, it is a solid supporting cast. Together, the three listed managers boast more than an average of 17 years of listed portfolio management experience. The management team is invested in the fund, but the maximum investment by any manager is between$ 100,000 and$ 500,000. An investment of more than$ 1 million would be ideal to align managers' interests with those of the fund's investors.

Note: The People Pillar rating is indirectly assigned by an analyst. The longest-tenured manager of the fund also manages a different product rated by an analyst. Their analyst-assigned People Pillar rating is combined here with the People scores (algorithmic or analyst-assigned) for the fund’s other managers on a tenure-weighted basis.

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

With about two years under its belt since its inception in March 2022, this share class has put up an impressive run.

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Morningstar Manager Research

Performance

However, with such a short track record, it is premature to draw a conclusion about its prospects. In the last two years, the fund's Retirement share class has returned 5.1%, compared with the 4.2% return of the category benchmark, the ICE BofA Core Fixed Rate Preferred Securities Index, for the same period. It also led peers as the category’s average return for the period was 3.4%. The share class outstripped the index with a higher Sharpe ratio, a measure of risk-adjusted return, over the trailing one-year period.

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Returns vary from period to period, but expenses are always subtracted.

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Morningstar Manager Research

Price

It is good practice to weigh them heavily in any investment evaluation. This share class is in the cheapest quintile of its Morningstar Category. Its attractive expense ratio, taken together with the fund’s People, Process, and Parent Pillars, indicates that this share class is well-positioned to generate positive alpha relative to its category benchmark, leading to its Morningstar Medalist Rating of Bronze.

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Portfolio Holdings JPDRX

  • Current Portfolio Date
  • Equity Holdings
  • Bond Holdings
  • Other Holdings
  • % Assets in Top 10 Holdings 19.3
Top 10 Holdings
% Portfolio Weight
Market Value USD
Sector

JPMorgan Prime Money Market Inst

3.29 31.0 Mil
Cash and Equivalents

Wells Fargo & Co. 3.9%

3.08 29.1 Mil
Corporate

UBS Group AG 9.25%

2.40 22.6 Mil
Corporate

PNC Financial Services Group Inc. 3.4%

2.38 22.5 Mil
Corporate

Banco Bilbao Vizcaya Argentaria, S.A. 9.375%

2.22 21.0 Mil
Corporate

Truist Financial Corp. 4.8%

2.18 20.6 Mil
Corporate

Banco Santander, S.A. 9.625%

1.91 18.0 Mil
Corporate

Morgan Stanley 5.948%

1.86 17.6 Mil
Corporate

State Street Corporation 6.7%

1.81 17.1 Mil
Corporate

Royal Bank of Canada 7.5%

1.74 16.4 Mil
Corporate