JPMorgan Short Duration Bond Fund earns an Above Average Process Pillar rating.
The most significant contributor to the rating is the parent firm's five-year risk-adjusted success ratio of 57%. 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. Strong risk-adjusted performance also supports 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 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 Short-Term Bond 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 underweight corporate bonds in recent years. In the latest month, the strategy has also relatively underweighted corporate bonds compared with Morningstar Category peers. Additionally, there's been a bias away from debt with longer than 30-year maturities over the past few years. Similarly, in recent months, the strategy also had less exposure to debt with longer than 30-year maturities than peers. Finally, during the past few years, the fund leaned meaningfully away from BBB rated bonds. In recent months, the strategy also had less exposure to BBB rated bonds compared to its peers.
This strategy's 12-month yield is 2.9%, lower than its average peers' 3.7%. In addition, it has a 3.8% 30-day SEC yield (a measure similar to yield-to-maturity). 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 A.