JPMorgan Short-Interm Muncpl Bd A OSTAX

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

The strategy underwent an entire portfolio management team change less than a year ago, but confidence in the strategy's new leadership drives an 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 AAA rated bonds and has a significant underweight in debt with 15- to 20-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.

JPMorgan Short-Intermediate Muncpl Bd Fd earns an Above Average Process Pillar rating.

The largest 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. The parent firm's five-year risk-adjusted success ratio of 55% 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 commendable 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 number of months that the management team has been running this vehicle together.

Compared with other funds in the Muni National Short 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. Relative to the average strategy in the category, the managers have been underweight AAA rated bonds in recent years. In the latest month, the strategy has also relatively underweighted AAA rated bonds compared with Morningstar Category peers. Additionally, there's been a notable bias away from debt with 15- to 20-year maturities over the past few years. Similarly, in recent months, the strategy also had less exposure to debt with 15- to 20-year maturities than peers. Finally, during the past few years, the fund leaned away from corporate debt. Nevertheless, the fund's corporate bonds exposure was in line with peers in the latest month.

This strategy's 12-month yield is 2.3%, lower than its average peers' 2.7%. Plus, its 30-day SEC yield (a standardized, point-in-time estimate of the fund’s future income return) sits at 2.9%. While a lower yield may deliver less income, it also 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.

Even though this strategy’s track record dates back to May 1998, the listed management team joined within the past three years. Therefore, the track record achieved under the previous team is not representative of the fund’s current merits.

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.

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.

The new team took the reins in February 2024 and looking at their performance so far, they have posted unremarkable results. Since the manager change three months ago, the fund lost 0.8% through month-end, trailing its peers' 0.1% loss and trailing the Bloomberg Barclays Municipal 3 Year 2-4 Year Maturity Bond Index’s 0.6% loss. With this narrow of a time frame with the new team, it is difficult to make a meaningful assessment of the fund’s risk.

This share class is in the second-costliest quintile of its Morningstar Category. Its steep expense ratio, paired with the fund’s People, Process, and Parent Pillars, suggests that this share class could struggle to deliver positive alpha against its category benchmark, explaining its Morningstar Medalist Rating of Neutral.