JPMorgan New York Tax Free 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 outperformed their respective category's median Morningstar Risk-Adjusted Return for the period. The parent firm's excellent risk-adjusted performance, as shown by its average 10-year Morningstar Rating of 3.2 stars, also contributes to the process. Lastly, the process is limited by being an actively managed strategy. Historical data, such as 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 New York Intermediate Morningstar Category, this fund takes on significantly lower 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 overweight debt with 10- to 15-year maturities in recent years. In the latest month, the strategy has relatively overweighted debt with 10- to 15-year maturities compared with its peers as well. Additionally, there's been a notable overallocation to AA rated bonds over the past few years. Compared with category peers, however, the strategy had less AA rated bonds exposure in the latest month. Finally, during the past few years, the fund leaned away from corporate debt. Nevertheless, the fund's corporate debt exposure was in line with peers in the latest month.
This strategy has a 2.6% 12-month yield, higher than its average peer's 2.4%. In addition, it has a 2.6% 30-day SEC yield (a measure similar to yield-to-maturity). Higher yields tend to indicate higher credit risk. The portfolio has a lower average surveyed credit quality of A, compared with the typical peers' AA and its non-investment-grade stake is 3% of assets, compared to its peers' 0%. 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.