JPMorgan Unconstrained Debt Fund earns an Above Average Process Pillar rating.
The primary contributor to the rating is its parent firm's impressive long-term risk-adjusted performance, as shown by the firm's average 10-year Morningstar Rating of 3.3 stars. Impressive risk-adjusted performance also contributes to the process. This can be seen in the fund's five-year alpha calculated relative to the category index, which suggests that the managers have shown skill in their allocation of risk. 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 Nontraditional Bond 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 AA rated bonds in recent years. In the latest month, the strategy has also relatively underweighted AA rated bonds compared with Morningstar Category peers. Additionally, there's been a bias towards debt with five- to seven-year maturities over the past few years. Compared with category peers, the strategy had more exposure to debt with five- to seven-year maturities in the most recent month. Finally, during the past few years, the fund leaned towards government bonds. In recent months, however, the strategy had less exposure to government bonds compared to its peers.
This strategy has a modest 4.0% 12-month yield, lower than its average peers' 5.1%. In addition, it has a 5.0% 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 BB.