Important information

JPMorgan Funds – Income Fund

  1. The Fund invests primarily in a portfolio of debt securities.
  2. The Fund is therefore exposed to emerging markets, investment grade bonds, credit, sovereign, interest rate risks which may affect the price of bonds, concentration, convertibles, equity, currency, liquidity, derivative and distribution (no assurance on distribution or the frequency of distribution or distribution rate or dividend yield) risks. Pertaining to investments in below investment grade or unrated debt securities, these securities may be subject to higher liquidity risks and credit risks comparing with investment grade bonds, with an increased risk of loss of investment. Investments in asset backed securities and mortgage backed securities may be subject to greater credit, liquidity and interest rate risks compared to other debt securities such as government issued bonds and are often exposed to extension and prepayment risks.
  3. The Fund may at its discretion pay dividends out of capital. The Fund may also at its discretion pay dividends out of gross income while charging all or part of the Fund’s fees and expenses to the capital of the Fund, resulting in an increase in distributable amount for the payment of dividends and therefore, effectively paying dividends out of realised, unrealised capital gains or capital. Investors should note that, share classes of the Fund which pay dividends may distribute not only investment income, but also realised and unrealised capital gains or capital. Payment of dividends out of capital amounts to a return or withdrawal of part of an investor’s original investment or from any capital gains attributable to that original investment. Any dividend payments, irrespective of whether such payment is made up or effectively made up out of income, realised and unrealised capital gains or capital, may result in an immediate reduction of the net asset value per share.
  4. Investors may be subject to substantial losses.
  5. Investors should not solely rely on this document to make any investment decision.

A FLEXIBLE STRATEGY
HELPS EXPAND INCOME POTENTIAL

Which is why the JPMorgan Funds – Income Fund invests opportunistically across multiple debt markets and sectors, covering traditional and non-traditional fixed income, with a view to making portfolio income a viable outcome.

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Why global fixed income with a flexible approach?

  • Fixed income sectors react
    differently to rising rates
    Fixed income sectors react
    differently to rising rates
  • Fundamentals of US high
    yield bonds remain strong
    Fundamentals of US high
    yield bonds remain strong
  • Non-traditional fixed income
    may offer attractive potential
    Non-traditional fixed income
    may offer attractive potential

Fixed income sectors react differently to rising rates

Despite rising rates, global fixed income still presents opportunities as different sectors exhibit different patterns. When interest rates rise, sectors such as local currency emerging market debt, US floating rate and US high yield bonds are likely to deliver positive total return.

Source: Bloomberg Finance L.P., FactSet, J.P. Morgan Economic Research, J.P. Morgan Asset Management. TIPS: Treasury Inflation-Protected Securities. EMD: emerging market debt. MBS: mortgage-backed securities. IG: investment grade.
Based on Bloomberg Barclays US Treasury Bellwethers (2, 5, 10, 30-year US Treasuries), Bloomberg Barclays US Treasury Inflation Protected Notes (TIPS), Bloomberg Barclays US Floating Rate Notes (BBB) (US Floating Rate), Bloomberg Barclays US Aggregate Securitised – MBS (US MBS), Bloomberg Barclays US Aggregate Credit – Corporate – Investment Grade (US IG Corporates), Bloomberg Barclays US Aggregate Credit – Corporate – High Yield (US High Yield), J.P. Morgan Emerging Market Bond Index Global (EMBIG) (USD EMD), J.P. Morgan Asia Credit Index (USD Asia Credit), J.P. Morgan Government Bond Index – EM Global (GBI-EM) (Local Currency EMD). Change in bond price is calculated using both duration and convexity, assuming a 1% rise in relevant local interest rate. Yield to worst is an estimate of the lowest yield that can be expected to earn from a callable bond. 2, 5, 10 and 30-year US Treasuries, USD EMD and Local Currency EMD are using yield. TIPS, US Floating Rate, US High Yield, USD Asia Credit, US MBS and US IG Corporates are using yield to worst. Yield is not guaranteed. Positive yield does not imply positive return. For illustrative purposes only. Guide to the Markets – Asia. Data reflect most recently available as of 30.09.2018.
Impact of a 1% rise in interest rates
Assumes a parallel shift in the yield curve and steady spreads
4% 0% -4% -8% -12% -16%

Fundamentals of US high yield bonds remain strong

US high yield bonds demonstrated resilience last year, despite a backdrop of rising rates and emerging market turmoil. This may partly be due to improving credit fundamentals. US companies are still expected to deliver double-digit earnings growth, and default rates are expected to remain low.

Source: J.P. Morgan Chase & Co, Moody’s Investor Services, as of end-November 2018. Default rates are par-weighted.
US high yield bonds: trailing 12-month default rate

Non-traditional fixed income may offer attractive potential

Non-traditional fixed income sectors such as asset-backed securities (ABS) provide additional sources of income. From auto loans to residential mortgages, ABS are expected to continue benefitting from robust US consumer confidence.

Source: J.P. Morgan Asset Management, Bloomberg, Conference Board, as of 31.08.2018.
The US consumer sentiment has been trending positive
US Consumer Confidence Index

FIXED INCOME CAPABILITIES

  • Team Approach Team Approach
  • Proprietary Research Proprietary Research
  • Risk Management Risk Management

Access to the power of a globally integrated team of investment professionals

Investment professionals
across sectors and markets
275+
Investment
locations
9
ASSETS UNDER
MANAGEMENT^
USD491billion
track record in
fixed income investing
60+years
Includes portfolio managers, research analysts, traders and investment specialists with VP title and above.
^ Includes assets managed on behalf of other J.P. Morgan Asset Management investment teams.
Source: J.P. Morgan Asset Management, as of 30.09.2018.

Our research encompasses fundamental, quantitative and technical analysis

FUNDAMENTAL
  • Macroeconomic data
  • Corporate health figures
Quantitative
(valuations)
Rich or cheap valuation on:
  • Absolute basis
  • Relative basis
    (historical and cross-sector)
TECHNICALS
  • Supply and demand dynamics
  • Investor positioning and momentum

Our risk management discipline is essential to our investment process

PORTFOLIO
MANAGEMENT
TEAM
1
INVESTMENT
DIRECTOR
2
INDEPENDENT
RISK
MANAGEMENT
3

Why invest in the JPMorgan Funds – Income Fund?

Flexible approach

Investing opportunistically across the bond universe without benchmark constraints, the fund managers can take advantage of the flexibility in managing the portfolio.

Multiple debt markets and sectors

The Fund invests in a wide range of fixed income securities, covering not only traditional but also non-traditional fixed income, allowing for a wider source of income.

Focusing on income

The fund managers manage the income of the Fund to help minimise fluctuations in dividend payments of its monthly distribution share classes*.

*Aim at monthly distribution. Dividend rate is not guaranteed. Distributions may be paid from capital. Refer to important information 3

Historical distributions

Ex-dividend date
(d/m/y)
Annualised yield*◻
USD (mth) Class HKD (mth) Class
01.10.2018 5.91% 5.98%
01.11.2018 6.84% 6.33%
03.12.2018 6.01% 6.08%
Source: J.P. Morgan Asset Management, as of 31.12.2018.
Positive distribution yield does not imply positive return. Annualised yield = [(1+distribution per unit/ex-dividend NAV)^12]-1. The annualised dividend yield is calculated based on the monthly dividend distribution with dividend reinvested, and may be higher or lower than the actual annual dividend yield.

Contact Us

Please contact your bank or financial adviser to learn more about the JPMorgan Funds – Income Fund.

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