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JPMorgan California Tax Free Bond I JPICX

Medalist Rating as of | See JPMorgan Investment Hub
  • NAV / 1-Day Return 9.95  /  0.00
  • Total Assets 301.2 Mil
  • Adj. Expense Ratio
    0.450%
  • Expense Ratio 0.450%
  • Distribution Fee Level Below Average
  • Share Class Type Institutional
  • Category Muni California Intermediate
  • Credit Quality / Interest Rate Sensitivity Medium/Moderate
  • Min. Initial Investment 1.0 Mil
  • Status Open
  • TTM Yield 2.73%
  • Effective Duration 5.13 years

USD | NAV as of May 24, 2024 | 1-Day Return as of May 24, 2024, 10:16 PM GMT+0

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Morningstar’s Analysis JPICX

Medalist rating as of .

JPMorgan California Tax Free Bond I boasts strong People and Process Pillar ratings, but other weaknesses hold this strategy's Morningstar Medalist Rating at 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.

JPMorgan California Tax Free Bond I boasts strong People and Process Pillar ratings, but other weaknesses hold this strategy's Morningstar Medalist Rating at Neutral.

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Morningstar Manager Research

Summary

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

The longest-tenured portfolio manager's extensive experience drives the strategy's Above Average People Pillar rating. The strategy's effective investment approach earns an Above Average Process Pillar rating. Independent of the rating, analysis of the strategy's portfolio shows it has maintained an underweight position in A rated bonds and has a substantial overweight in debt with 10- to 15-year maturities compared with category peers. The strategy's parent organization earns the firm an Above Average Parent Pillar rating, and this rating is inherited from vehicles belonging to the same branding entity and is indirectly assigned by an analyst.

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

Above Average

JPMorgan California Tax Free Bond Fund earns an Above Average Process Pillar rating.

The largest contributor to the rating is the parent firm's five-year risk-adjusted success ratio of 56%. 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. The parent firm's superior risk-adjusted performance, as shown by its average 10-year Morningstar Rating of 3.3 stars, also supports the rating. Lastly, the process is limited by the number of months that the management team has been running this vehicle together.

Compared with other funds in the Muni California Intermediate Morningstar Category, this fund takes on lower credit risk. But in terms of long-term interest-rate sensitivity, it hews closely to its average peer 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, there's been a notable bias towards debt with 10- to 15-year maturities over the past few years. Compared with category peers, the strategy had more exposure to debt with 10- to 15-year maturities in the most recent month. Finally, during the past few years, the fund leaned away from corporate debt. Nevertheless, the fund's corporate debt exposure was in line with peers in the latest month.

This strategy's 12-month yield is 2.7%, which is near its average peer. Plus, it has a 2.8% 30-day SEC yield (a standardized, point-in-time estimate of the fund’s future income return). The portfolio holds assets with a higher average surveyed credit quality of A, compared with the category average of BBB, and its non-investment-grade stake is 1% of assets, compared with its average peers' 0%. Lower-credit-risk strategies are often able to navigate bear markets more effectively.

Rated on Published on

JPMorgan California Tax Free Bond Fund earns an Above Average People Pillar rating.

null Morningstar Manager Research

Morningstar Manager Research

People

Above Average

The team is backed by Michelle V. Hallam, the longest-tenured manager on the strategy, who brings 20 years of listed portfolio management experience. The strategies they currently manage have an average Morningstar Rating of 2.5 stars, demonstrating disappointing risk-adjusted performance compared with category peers. Although the team is small, it is a solid supporting cast. Together, the three listed managers boast more than an average of 10 years of listed portfolio management experience. As a team, they manage two investment vehicles together, with mixed prospects. The asset-weighted average Morningstar Medalist Rating across the strategies is Neutral. This means, in aggregate, they are not positioned to deliver positive alpha. None of the managers here invest any money in the strategy, which is disappointing, as such investments help align managers' interests with fundholders.

Note: The People Pillar rating is indirectly assigned by an analyst. At least one of the managers on this fund manages a different product rated by an analyst. The analyst-assigned People Pillar rating(s) for these managers are combined with algorithmic scores for any non-covered 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

This strategy's Institutional share class has held up poorly, falling behind both its peers and the category benchmark.

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Morningstar Manager Research

Performance

Specifically, this share class trailed its average peer by 16 basis points annualized over a 10-year period. It was also not able to clear the hurdle set by the category index, Bloomberg Barclays MF California Intermediate Municipal Bond Index, where it trailed by an annualized 35 basis points over the same period.

Even when adjusting for risk, the fund does not hold up. The share class failed to beat the 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 ineffective as it was unable to generate alpha, over the same 10-year period, against the category group index: a benchmark that encapsulates the performance of the broader asset class.

Published on

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

null Morningstar Manager Research

Morningstar Manager Research

Price

This share class imposes a fee that places it in its Morningstar Category's second-cheapest quintile. Even with this fee, the fund’s People, Process, and Parent Pillars suggest this share class should not be able to deliver positive alpha relative to its category benchmark, garnering a Morningstar Medalist Rating of Neutral.

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Portfolio Holdings JPICX

  • Current Portfolio Date
  • Equity Holdings
  • Bond Holdings
  • Other Holdings
  • % Assets in Top 10 Holdings 13.5
Top 10 Holdings
% Portfolio Weight
Market Value USD
Sector

JPMorgan Instl Tx Fr Mny Mkt Agcy

6.04 18.3 Mil
Cash and Equivalents

CALIFORNIA ST 4%

2.03 6.2 Mil
municipal

LOS ANGELES CALIF DEPT WTR & PWR REV 5%

1.90 5.7 Mil
municipal

CALIFORNIA HEALTH FACS FING AUTH REV 2.65%

1.65 5.0 Mil
municipal

CALIFORNIA HEALTH FACS FING AUTH REV 5%

1.21 3.7 Mil
municipal

LOS ANGELES CALIF HBR DEPT REV 5%

1.19 3.6 Mil
municipal

CALIFORNIA ST ENTERPRISE DEV AUTH STUDENT HSG REV 5%

1.17 3.5 Mil
municipal

UNIVERSITY CALIF REVS 5%

1.12 3.4 Mil
municipal

GLENDALE CALIF ELEC REV 5%

1.09 3.3 Mil
municipal

SAN FRANCISCO CALIF CITY & CNTY ARPTS COMMN INTL ARPT REV 5%

1.06 3.2 Mil
municipal