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JPMorgan Floating Rate Income C JPHCX

Medalist Rating as of | See JPMorgan Investment Hub
  • NAV / 1-Day Return 8.53  /  +0.12 %
  • Total Assets 333.5 Mil
  • Adj. Expense Ratio
    1.500%
  • Expense Ratio 1.500%
  • Distribution Fee Level Low
  • Share Class Type Level Load
  • Category Bank Loan
  • Credit Quality / Interest Rate Sensitivity Low/Limited
  • Min. Initial Investment 1,000
  • Status Open
  • TTM Yield 7.16%
  • Effective Duration 0.36 years

USD | NAV as of Jun 21, 2024 | 1-Day Return as of Jun 21, 2024, 10:17 PM GMT+0

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Morningstar’s Analysis JPHCX

Medalist rating as of .

Strength in JPMorgan Floating Rate Income C's People Pillar is partially offset by an Average Process Pillar rating, leading to a Morningstar Medalist Rating of Neutral.

Our research team assigns Neutral ratings to strategies they’re not confident will outperform a relevant index, or most peers, over a market cycle on a risk-adjusted basis.

Strength in JPMorgan Floating Rate Income C's People Pillar is partially offset by an Average Process Pillar rating, leading to a Morningstar Medalist Rating of Neutral.

null Morningstar Manager Research

Morningstar Manager Research

Summary

Fees are a weakness here. The strategy's lofty fees are a high hurdle to clear, as it is priced within the highest quintile among peers.

The strategy receives an Average Process Pillar rating. Independent of the rating, analysis of the strategy's portfolio shows it has maintained an overweight in corporate bonds and debt with three- to five-year maturities compared with category peers. The strategy’s management team earns an Above Average People 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 evaluation of this fund's process seeks to understand whether the strategy has a performance objective and sensible, repeatable execution.

null Morningstar Manager Research

Morningstar Manager Research

Process

Average

JPMorgan Floating Rate Income Fund earns an Average Process Pillar rating.

The main 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 57% also bolsters 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 relatively high success ratio suggests that the firm does well for investors and that this fund may benefit from that. Lastly, the process is limited by the fund's weak long-term risk-adjusted performance. This can be seen in its five-year alpha calculated relative to the category index, which suggests that the process has struggled over that period.

Compared with other funds in the Bank Loan Morningstar Category, this fund has been consistently sensitive to interest-rate changes 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 an overweight corporate debt in recent years. In the latest month, the strategy has relatively overweighted corporate bonds compared with its peers as well. Additionally, there's been a bias towards debt with three- to five-year maturities over the past few years. In the most recent month, however, the fund's exposure to debt with three- to five-year maturities was in line with the Morningstar Category average. Finally, during the past few years, the fund leaned meaningfully towards BB rated bonds. In this month, the strategy also leaned more towards BB rated bonds compared with its peers.

This strategy has a modest 7.1% 12-month yield, lower than its average peers' 8.6%. In addition, it has a 7.5% 30-day SEC yield (a standardized, point-in-time estimate of the fund’s future income return). A lower yield 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's average surveyed credit quality is on par with peers, with both the fund and the average being rated B.

Rated on Published on

JPMorgan Floating Rate Income Fund earns an Above Average People Pillar rating.

null Morningstar Manager Research

Morningstar Manager Research

People

Above Average

James P. Shanahan’s veteran status, with over 25 years of listed portfolio management experience, brings a wealth of experience to the table. Although the team is small, it is a solid supporting cast. Together, the three listed managers boast more than an average of 16 years of listed portfolio management experience. The highest personal investment in the fund by any of its managers is between$ 500,000 and$ 1 million. That's on the low side--it would need to be more than$ 1 million for us to see the investment as sufficient to promote the strong alignment of their interests with the strategy'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

Performance-wise, this strategy’s C share class, with returns reported in US Dollar, has demonstrated it is weak over a full market cycle, with inferior returns compared with category peers, even after adjusting for risk.

null Morningstar Manager Research

Morningstar Manager Research

Performance

The share class lagged the category index, S&P/ LSTA Leveraged Loan Index, with a lower Sharpe ratio, a measure of risk-adjusted returns, over the trailing 10-year period. But notably, these subpar risk-adjusted results have not come with more volatility than the benchmark, as measured by standard deviation. Finally, the share class proved itself effective by generating positive alpha, over the same period, against the category group index: a benchmark that encapsulates the performance of the broader asset class.

The strategy's long-term absolute returns are lower than the benchmark index. On a 10-year basis, this share class underperformed the category index by an annualized 2.2 percentage points. The strategy also trailed the category average by an annualized 1.0 percentage point over the same 10-year period. Although one-year performance does not factor heavily in the overall rating, it is worth mentioning that this share class returned 9.2%, a sizable 1.6-percentage-point loss over its average peer, placing it within the bottom 10% of its category group.

Published on

Fees compound over time and diminish returns, making it critical for investors to minimize expenses.

null Morningstar Manager Research

Morningstar Manager Research

Price

This share class is in the costliest quintile of its Morningstar Category. Its steep fee, considered jointly with the fund’s People, Process, and Parent Pillars, indicates that this share class could struggle to deliver positive alpha relative to its category benchmark, leading to its Morningstar Medalist Rating of Neutral.

Published on

Portfolio Holdings JPHCX

  • Current Portfolio Date
  • Equity Holdings
  • Bond Holdings
  • Other Holdings
  • % Assets in Top 10 Holdings 10.3
Top 10 Holdings
% Portfolio Weight
Market Value USD
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