JPM Global Income A (div) EUR |
by Nour Al Twal
JPMorgan Multi-Asset Income’s seasoned team employs a thoughtful process, but the strategy has proved unable to find a balance between income, total return, and risk that is advantageous compared with the traditional Morningstar Category peer; we are downgrading its Process rating to Average from Above Average. Day-to-day portfolio managers Michael Schoenhaut and Eric Bernbaum have been on this strategy since its 2007 inception and 2014, respectively, and Gary Herbert joined the roster in early 2021. The skilled trio manages the strategy’s four vehicles: JPMorgan Income Builder (mutual fund), JPMorgan Multi Income (Hong Kong Unit Trust), JPMorgan Global Income (SICAV), and JPMorgan Multi-Asset Income (OEIC). Jeff Geller and Leon Goldfeld act as a fourth manager on the mutual fund and the Unit Trust, respectively. Schoenhaut and Bernbaum collaborate with managers across the firm to curate the underlying asset class and sector sleeves that comprise this global income strategy. The portfolio is flexible and can invest up to 100% in fixed income. High-yield debt cannot exceed 70% of assets, and the equity allocation is capped at 60%. The team can invest across the capital structure and in more than 80 countries. Through frequent discussions, the underlying asset class and sector experts contribute their market views, which the lead managers consider in their asset-allocation decisions. In pursuit of its goal, the portfolio has grown from five sleeves since its 2007 inception to about 20 sleeves at the beginning of 2024. The team has managed this portfolio’s many pieces meticulously, but this income approach hasn’t boasted an advantage relative to peers. Multi-asset income funds are challenged with providing a reliable level of income to investors without hurting risk-adjusted total returns. This fund has not proved able to do so consistently. Over the past 10 years ending February 2024, the R6 shares’ 12-month yield averaged 4%, roughly double that of the average peer, but returns lagged the median on a risk-adjusted basis (as measured by Sharpe ratio). Over the past decade ending February 2024, the portfolio’s greater-than-average allocation to equities and high-yield bonds helped performance relative to the average peer, while its greater exposure to non-US securities and value-oriented stocks acted as headwinds. |
Morningstar Pillars | |
People | Above Average |
Parent | Above Average |
Process | Average |
Morningstar reserve its rights to charge for access to these Ratings and/or Rating report. |
Permissions/Reprints E-mail Morningstar |