Experienced, Deep, Time-Tested: A Best-in-Class Core Offering

Morningstar Medalist Rating: Gold

Process Pillar: High

People Pillar: High

Parent Pillar: Above Average

Veteran leadership, effective collaboration, a well-resourced common platform, and a consistent process make JPMorgan Core Bond WOBDX a top intermediate core bond offering.

JPMorgan mainstay Rick Figuly leads the strategy and heads the US core bond team. He took the reins in September 2015 and has worked on the strategy alongside bond veteran, Justin Rucker, since March 2019. Alongside the managers is one of the deepest supporting groups among core bond competitors, which was demonstrated when comanager and US fixed-income CIO Steve Lear announced his retirement in March 2023, and the firm quickly added two proven investors to the roster. JPMorgan’s vast global resources help 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.

The fund’s approach to managing these securitized stakes stands out, and typically these bonds comprise 40%-50% of portfolio 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, which features more plain-vanilla mortgage pass-throughs. Instead, the managers target certain characteristics in specified mortgage pools, collateralized mortgage obligations, nonagency mortgage-backed securities, and asset-backed securities. Rather than making big interest-rate bets, the team keeps overall duration, a measure of interest-rate sensitivity, within 10% of the Bloomberg US Aggregate Bond Index’s but also tries to exploit yield-curve opportunities.

JPMorgan Core Bond: Performance Highlights

The strategy has consistently beaten peers. Since October 2015, manager Rick Figuly’s first full month, the R6 shares’ 2.1% annualized return through April 2025 beat the distinct intermediate core Morningstar Category’s median 1.7% and the benchmark’s 1.6%. This ranked in the top fourth of peers. The strategy’s volatility-adjusted performance, including its Sharpe ratio (a measure of excess return relative to excess standard deviation) was just as strong. That it achieved these results with lower volatility than most peers highlights the team’s skill in security selection with a focus on stable cash flows.

Consistency is a hallmark here. The fund ranked similarly over trailing three- and five-year annualized periods. In the nine calendar years under Figuly’s leadership, the fund landed below the peer median only twice while also holding up better than most in nearly every stress period. For example, when long-term yields rose in 2022, the fund’s 12.2% loss was less severe than the typical peer’s 13.3% drop; the portfolio’s high-quality bias and more stable securitized bonds helped.

Even in an average year for the strategy, like 2023, it delivered for investors. The fund’s longer-than-index duration in anticipation of a weaker economy detracted, but the team’s solid security selection in securitized sectors once again helped offset the rate positioning. Most recently, its year-to-date 3.5% return through April 2025 outpaced the peers’ median 3.1%, thanks again to its spread sectors, especially in agency MBS and ABS.