S&P: JPMorgan Funds - Sterling Managed Reserves Fund Assigned 'AA-f/S1+' Ratings
The 'AA-f' fund credit quality rating is based on our analysis of the credit quality of the fund's eligible investments and the counterparties. We also factor in our opinion of the overall management of the fund. The rating signifies that, in our view, the fund's portfolio holdings provide very strong protection against losses from credit defaults. The fund invests in securities with a minimum credit quality rating of 'BBB-', and we understand that the portfolio's credit profile will be managed to maintain a 'AA-f' fund credit quality rating.
As part of its volatility analysis, S&P Global Ratings assessed the management, portfolio level risk, target durations, and comparable return strategies of the JPMorgan Funds – Sterling Managed Reserves Fund. The 'S1+' volatility rating signifies that a fund has extremely low sensitivity to changing market conditions and an aggregate level of risk that is less than or equal to that of a portfolio that comprises the highest-quality fixed-income instruments with an average maturity of one year or less.
JPMorgan Funds has been authorized under Part I of the Luxembourg law of Dec. 17, 2010, relating to collective investment undertakings. It qualifies as an Undertaking for Collective Investments in Transferable Securities ("UCITS") under the EC Directive 2009/65 (dated July 13, 2009) and therefore may be offered for sale in the EU. JPMorgan Funds is an umbrella fund established as a "Societe d'Investissement a Capital Variable" (SICAV), and it is subject to the laws of the Grand Duchy of Luxembourg. The umbrella fund operates separate subfunds, and each subfund corresponds to a separate portfolio of the assets and liabilities of the fund. Each subfund is represented by one or more share classes.
JPMorgan Funds – Sterling Managed Reserves Fund aims to achieve a return in excess of the sterling money-markets by investing primarily in British pound-denominated short-term debt securities.
The fund seeks to achieve its objective by investing in fixed - and floating-rate debt securities, including, but not limited to, securities issued or guaranteed by the U. K. government or by its agencies, corporate securities, and asset-backed securities. For efficient portfolio management purposes, the fund may also enter into repurchase agreements with highly rated counterparties. The fund will have a weighted-average duration that will not exceed one year and will hold fixed - and floating-rate securities that have an initial or remaining maturity of no more than three years from the date of settlement. The fund's benchmark is the BofA Merrill Lynch Sterling 3-Month Government Bill Index (Total Return Gross).
In our opinion, the JPMorgan Funds – Sterling Managed Reserves Fund is managed by a strong and very experienced team of investment professionals at London-based JPMorgan Asset Management (UK) Ltd. As of June 30, 2016, JP Morgan Asset Management had approximately $1.69 trillion in assets under management, of which $499.3 billion was in short-term fixed-income management. The ratings on the fund also reflect our view of the administration and custody of the fund, which are provided by J. P. Morgan Bank Luxembourg S. A., ultimately a wholly owned subsidiary of JPMorgan Chase & Co. (A-/Stable/A-2).
Our credit quality and volatility ratings are based on our analysis of a fund's eligible portfolio investments and strategy, historical return volatility, and management. The seven-category credit quality rating scale ranges from 'AAAf' (highest level of protection) to 'CCCf' (least protection).The ratings from 'AAAf' to 'CCCf' may be modified by the addition of a plus (+) or minus (-) sign to show relative standing within the major rating categories. Volatility ratings range from lowest volatility ('S1'), with certain funds designated a plus sign to indicate their extremely low sensitivity to changing market conditions, to highest volatility ('S6'). We monitor fixed-income funds monthly to ensure the consistency of the funds' credit quality and volatility profiles with the assigned ratings.
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