JPMorgan Ultra-Short Municipal Fund earns an Above Average Process Pillar rating.
The largest 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. The parent firm's impressive risk-adjusted performance, as shown by its average 10-year Morningstar Rating of 3.3 stars, also influences the rating. Lastly, the process is limited by the fund's weak long-term risk-adjusted performance. This can be seen in its five-year alpha calculated relative to the category index, which suggests that the process has struggled over that period.
Compared with other funds in the Muni National Short Morningstar Category, this fund takes on higher credit risk. But in terms of long-term interest-rate sensitivity, it hews closely to its average peer 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 category average, the managers have been substantially overweight cash in recent years. In the latest month, the strategy has relatively overweighted cash compared with its peers as well. Additionally, there's been a notable bias away from debt with three- to five-year maturities over the past few years. Similarly, in recent months, the strategy also had less exposure to debt with three- to five-year maturities than peers. Finally, during the past few years, the fund leaned away from AAA rated bonds. In recent months, the strategy also had less exposure to AAA rated bonds compared to its peers.
This strategy's 12-month yield is 2.5%, which mirrors its average peer. Plus, it has a 2.9% 30-day SEC yield (a measure similar to yield-to-maturity). The portfolio has a lower average credit rating of BBB, compared with the typical peers' A and it holds no non-investment-grade assets, despite the average peers' 1%. Strategies that take on more credit risk tend to be at their best when markets are as well. This risk contributes to strong performance during bull markets at the cost of losing more on the downside.