JPMorgan Short Duration Core Plus R6 JSDRX

The portfolio maintains a sizable cost advantage over competitors, priced within the cheapest fee quintile among peers.

The management team's considerable industry experience drives an Above Average People Pillar rating for the strategy. The strategy's effective investment approach earns an Above Average Process 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.

JPMorgan Short Duration Core Plus Fund earns an Above Average Process Pillar rating.

The main 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. Impressive risk-adjusted performance also strengthens 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. However, 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 Short-Term Bond 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 average strategy in the category, the managers have been underweight AA rated bonds in recent years. In the latest month, the strategy has also relatively underweighted AA rated bonds compared with Morningstar Category peers. Additionally, there's been a notable overweight position in debt with 20- to 30-year maturities over the past few years. Compared with category peers, the strategy had more exposure to debt with 20- to 30-year maturities in the most recent month. Finally, during the past few years, the fund leaned towards securitized debt. In this month, the strategy also leaned more towards securitized debt compared with its peers.

This strategy's 12-month yield is 3.7%, lower than its average peers' 4.0%. It also has a 4.4% 30-day SEC yield (a standardized, point-in-time estimate of the fund’s future income return). 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 has a lower average surveyed credit quality of BBB, compared with the category average's A and 9% of the fund's assets are rated non-investment-grade, compared to its peers' 2%. Strategies with more credit risk may have a higher return, but they are riskier.

Cary J. Fitzgerald, the longest-tenured manager on the strategy, boasts over 25 years of listed portfolio management experience. Cary J. Fitzgerald has an experienced listed co-manager. Together, they average over 30 years of listed portfolio management experience. As a team, they manage two investment vehicles together, with solid long-term prospects. The strategies average a Bronze asset-weighted average Morningstar Medalist Rating, indicating a position to deliver positive alpha in aggregate. The highest personal investment in this offering by any of its managers is at least$ 1 million. An investment of that size is large enough to align managers' interests with investors.

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.

J.P. Morgan is a well-resourced, diligent, and responsible steward of client assets. Investment teams are seasoned and stalwart, especially in equity and fixed income, the latter of which has successfully undergone substantial transformation in recent years. The firm offers competitive compensation that is aligned with fundholders and shows strong retention at senior levels of the organization. It demonstrates a culture of constant innovation and willingness to evolve. For example, J.P. Morgan recently expanded its investment committee process through which senior leaders review various teams and strategies, and it continues to develop proprietary portfolio management and risk oversight tools. Some funds still face high fee hurdles, but the firm has generally lowered expenses as it has grown.

The firm isn't without its complications. J.P. Morgan's product offering is extensive, and some areas need improvement. For instance, its multi-asset business has faced some challenges as a result of complex investment processes. The firm continues to build out its footprint in China, but its efforts there remain unproven. Although not every strategy is the best in its class, J.P. Morgan remains earnest in the pursuit of excellence, and investors are well-served.

Over a 10-year period, this share class outperformed the category’s average return by 19 basis points annualized. And it was also ahead of the category index, the Bloomberg Barclays U.S. Aggregate Government/ Credit 1-3 Year Index, by 1.2 percentage points over the same period.

The risk-adjusted performance only continues to make a case for this fund. The share class had a higher Sharpe ratio, a measure of risk-adjusted return, than the index over the trailing 10-year period. Often, higher returns are associated with higher risk. This strategy is no exception, with a standard deviation of 3.3% exceeding the benchmark's 1.5%. Finally, the share class proved itself effective by generating positive alpha, over the same 10-year period, against the category group index: a benchmark that encapsulates the performance of the broader asset class.

This share class is within the cheapest quintile of its Morningstar Category. Its affordable expense ratio, paired with the fund’s People, Process, and Parent Pillars, suggests that this share class has the ability to deliver positive alpha compared with its category benchmark, leading to its Morningstar Medalist Rating of Silver.