Veteran managers backed by a deep bench along with a dependable, time-tested approach earn JPMorgan Core Bond People and Process upgrades to High from Above Average.
Lead manager Rick Figuly has provided stability since taking the helm in September 2015, as has Justin Rucker since joining him as a comanager in March 2019, but the team’s depth of resources showed in a recent personnel transition. Although comanager and US Fixed Income CIO Steve Lear was not involved in running the strategy, his retirement announcement nine months prior to his March 2024 departure led to the naming of two proven investors to this roster. Securitized specialist Andy Melchiorre and rates specialist Edward Fitzpatrick joined as comanagers in May 2023.
Figuly’s emphasis on diligent, bottom-up security selection to ensure this fund consistently delivers is rooted in decades of experience. He began managing core portfolios at JPMorgan in 2002 and rose to become head of JPMorgan’s US Core Bond team. Rucker, meanwhile, has more than two decades managing taxable-bond portfolios. The team draws on JPMorgan’s vast global resources to drive sector allocation and security selection, the foundation for this fund’s value-driven approach, including a long-standing bias to securitized debt of various structures and corporate bonds.
These securitized stakes make up the bulk of the fund, typically between 40% and 50% of assets. However, intense focus on positively convex structures, or those with more stable durations given changes in underlying yields, differs from most peers and the index that feature more plain-vanilla mortgage pass-throughs or TBAs. Specified mortgage pools, collateralized-mortgage obligations, nonagency MBS, and asset-backed securities target specific characteristics. Over the past year through December 2023, the team found better relative value opportunities in agency MBS, asset-backed securities, and corporates over Treasuries, nonagency MBS, and commercial MBS. Rather than making big interest-rate bets, the team keeps overall duration within 10% of the Bloomberg U.S. Aggregate Bond Index but also tries to exploit opportunities along the yield curve.
Consistent performance is a hallmark for the fund. Over Figuly’s tenure since October 2015 (his first full month), the R6 shares’ 1.5% annualized return through February 2024 beat the Bloomberg U.S. Aggregate Index’s 1.1% and its unique intermediate core bond Morningstar Category median peer’s 1.2% gain. The fund has typically held up better than most peers in stress periods and consistently delivered strong results over three-year rolling periods.