JPMorgan Core Plus brings to bear the best of the firm's fixed-income resources under the banner of a cadre of experienced managers. Its cheapest share classes earn a Morningstar Analyst Rating of Silver, while its more expensive share classes receive Bronze or Neutral ratings.
While this strategy had long benefited from the in-depth, bottom-up work of well-resourced and seasoned security analysts, the standardization of reporting and risk systems across its disparate investment hubs of the firm enable the five comanagers here to orchestrate the portfolio nimbly up top. Managers Steve Lear and Andrew Norelli, who joined the strategy in late 2013 and early 2014, respectively, co-lead the strategy and make broad asset-allocation decisions based on macroeconomic data and input from their fellow, sector-focused comanagers. While Rick Figuly, who works with the securitized team, has sat on the fund's roster since 2006, Lisa Coleman (representative of the investment-grade credit team) and Tom Hauser (representing the high-yield team) only joined this effort in July 2020. All five of these managers have well over a decade of investing experience and long careers at the firm.
Thanks to its comfort with high-yield fare, the strategy falls into the intermediate core-plus bond Morningstar Category and packs a little more punch than its Bloomberg U.S. Aggregate Bond Index benchmark. It typically holds between 5% and 20% of assets in junk-rated corporates (the index holds none and many peers keep that exposure under 10%, while this strategy has met that limit at times); up to 10% in emerging-markets debt; and 35% to 50% in agency and nonagency securitized fare. Though Lear and Norelli lean on their robust bench of research personnel for idea generation and security recommendations, they actively engage with the portfolio and don't hesitate to block issuers they don't see as having attractive valuations.
Over time, this marriage of top-down and bottom-up sensibilities has paid off. Since Norelli took the effective lead on the strategy, its institutional share class generated 3.8% annualized between April 2014 and September 2021, outperforming both its index but roughly matching its typical rival. It generated this result, however, with a top-quintile risk-adjusted return (as measured by Sharpe ratio).