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JPMorgan Tax Aware Real Return A TXRAX

Medalist Rating as of | See JPMorgan Investment Hub
  • NAV / 1-Day Return 9.45  /  +0.21 %
  • Total Assets 521.6 Mil
  • Adj. Expense Ratio
    0.700%
  • Expense Ratio 0.700%
  • Distribution Fee Level Below Average
  • Share Class Type Front Load
  • Category Muni National Interm
  • Credit Quality / Interest Rate Sensitivity Medium/Moderate
  • Min. Initial Investment 1,000
  • Status Open
  • TTM Yield 2.99%
  • Effective Duration 4.55 years

USD | NAV as of Apr 12, 2024 | 1-Day Return as of Apr 12, 2024, 11:18 PM GMT+0

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Morningstar’s Analysis TXRAX

Medalist rating as of .

JPMorgan Tax Aware Real Return A boasts strong Process and People 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 Tax Aware Real Return A boasts strong Process and People Pillar ratings, but other weaknesses hold this strategy's Morningstar Medalist Rating at Neutral.

null Morningstar Manager Research

Morningstar Manager Research

Summary

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's investment process inspires confidence and 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 BBB rated bonds and an overweight in debt with 10- to 15-year maturities compared with category peers. The management team's considerable industry experience earns it an Above Average People Pillar rating. 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 investment process evaluation looks for strategies that should be able to outperform their Morningstar Category index on a risk-adjusted basis over time.

null Morningstar Manager Research

Morningstar Manager Research

Process

Above Average

JPMorgan Tax Aware Real Return Fund earns an Above Average Process Pillar rating.

The main driver of the rating is the fund's excellent long-term risk-adjusted performance. This can be seen in its five-year alpha calculated relative to the category index, which suggests that the managers have shown skill in their allocation of risk. The parent firm's five-year risk-adjusted success ratio of 57% also bolsters the rating. 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 impressive success ratio suggests that the firm does well for investors and that this fund may benefit from that. 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 Muni National Interm 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 BBB rated bonds in recent years. In the latest month, the strategy has also relatively underweighted BBB rated bonds compared with Morningstar Category peers. Additionally, there's been a 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 meaningfully towards cash. In this month, the strategy also leaned more towards cash compared with its peers.

This strategy's 12-month yield is 3.0%, higher than its average peer's 2.8%. It also has a 2.7% 30-day SEC yield (a measure similar to yield-to-maturity). Typically, higher yields come at the cost of higher credit risk. But that isn't always the case. Over the past 12 months, the average yield of the fund has been higher 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.

Rated on Published on

JPMorgan Tax Aware Real Return Fund earns an Above Average People Pillar rating.

null Morningstar Manager Research

Morningstar Manager Research

People

Above Average

The largest contributor to the rating is its parent firm's five-year success ratio of 57%. The measure indicates the percentage of a firm's funds that survived and beat their respective category's median return for the period. The combined average five-year excess return of each manager also bolsters the rating. It implies that the funds they manage have exceeded the average manager. Lastly, the rating is limited by the parent firm's five-year retention rate of 81%, which suggests it could do more to retain its portfolio managers.

The team is backed by David P. Rooney, the longest-tenured manager on the strategy, who brings over 25 years of listed portfolio management experience. The average Morningstar Rating of the strategies they currently manage is 3.2 stars, demonstrating average risk-adjusted performance. David P. Rooney has an experienced backdrop of support. The three listed managers boast 21 years of average listed portfolio management experience. None of the portfolio managers here invest in this fund. This hurts the rating because manager investment would align their interests with the strategy's investors.

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 A share class' long-term performance is mixed depending on the yardstick used.

null Morningstar Manager Research

Morningstar Manager Research

Performance

It has provided better returns compared with peers, but varied returns compared with the category benchmark. This share class led its average peer by an annualized excess return of 69 basis points over a 10-year period. But despite the above-average returns against peers, it had a mixed track record compared with the category index, Bloomberg Barclays Municipal 1-15 Year Bond Index. It outperformed the index by 31 basis points over an eight-year period and underperformed it by 64 basis points over the 10-year period.

When adjusting for risk, the fund is not as favorable. The share class trailed the index with a lower Sharpe ratio, a measure of risk-adjusted returns, over the trailing 10-year period. However, this strategy stayed in line with the benchmark's 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.

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It is important to pay attention to fees, as lower-cost investments maximize investors' returns.

null Morningstar Manager Research

Morningstar Manager Research

Price

This share class sits in the second-costliest quintile of its Morningstar Category. Its steep fee, in conjunction with the fund’s People, Process, and Parent Pillars, indicates that this share class is unlikely to deliver positive alpha compared with its category benchmark, leading to its Morningstar Medalist Rating of Neutral.

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Portfolio Holdings TXRAX

  • Current Portfolio Date
  • Equity Holdings
  • Bond Holdings
  • Other Holdings
  • % Assets in Top 10 Holdings 15.7
Top 10 Holdings
% Portfolio Weight
Market Value USD
Sector

JPMorgan Instl Tx Fr Mny Mkt Agcy

6.23 31.4 Mil
Cash and Equivalents

Cash

2.73 13.8 Mil
Cash and Equivalents

CALIFORNIA CMNTY CHOICE FING AUTH CLEAN ENERGY PROJ REV 4%

2.44 12.3 Mil
municipal

NEW YORK N Y CITY TRANSITIONAL FIN AUTH REV 5%

2.18 11.0 Mil
municipal

OREGON ST FACS AUTH REV 3.45%

1.99 10.0 Mil
municipal

LOUISIANA ST GAS & FUELS TAX REV 4.5%

1.61 8.1 Mil
municipal

TENNERGY CORP TENN GAS REV 4%

1.45 7.3 Mil
municipal

HOUSTON TEX WTR & SWR SYS REV 5.75%

1.38 7.0 Mil
municipal

ILLINOIS ST 5%

1.35 6.8 Mil
municipal

VIRGINIA ST PUB SCH AUTH SPL OBLIG PRINCE WILLIAM CNTY 4.25%

1.17 5.9 Mil
municipal