Why This Go-Anywhere JPMorgan Bond ETF Is Thriving

A flexible mandate and solid bond-picking have helped the JPMorgan Income ETF deliver above-average returns with low volatility. When you purchase through links on our site, we may earn an affiliate commission. Here’s how it works. Profit and prosper with the best of Kiplinger's advice on investing, taxes, retirement, personal finance and much more. Delivered daily. Enter your email in the box and click Sign Me Up.You are now subscribedYour newsletter sign-up was successfulWant to add more newsletters?Delivered dailyKiplinger TodayProfit and prosper with the best of Kiplinger's advice on investing, taxes, retirement, personal finance and much more delivered daily. Smart money moves start here.Sent five days a weekKiplinger A Step AheadGet practical help to make better financial decisions in your everyday life, from spending to savings on top deals.Delivered dailyKiplinger Closing BellGet today's biggest financial and investing headlines delivered to your inbox every day the U.S. stock market is open.Sent twice a weekKiplinger Adviser IntelFinancial pros across the country share best practices and fresh tactics to preserve and grow your wealth.Delivered weeklyKiplinger Tax TipsTrim your federal and state tax bills with practical tax-planning and tax-cutting strategies.Sent twice a weekKiplinger Retirement TipsYour twice-a-week guide to planning and enjoying a financially secure and richly rewarding retirementSent bimonthly.Kiplinger Adviser AngleInsights for advisers, wealth managers and other financial professionals.Sent twice a weekKiplinger Investing WeeklyYour twice-a-week roundup of promising stocks, funds, companies and industries you should consider, ones you should avoid, and why.Sent weekly for six weeksKiplinger Invest for RetirementYour step-by-step six-part series on how to invest for retirement, from devising a successful strategy to exactly which investments to choose. Stocks, schmocks. Lately, bonds have been a rewarding place to be, too, if the recent performance of Kiplinger ETF 20 member, JPMorgan Income ETF (JPIE), is any guide.The multisector bond fund, which aims to maximize income for a prudent level of risk, delivered a 6.9% return over the past 12 months, with less than half the volatility of the Bloomberg U.S.

Aggregate Bond Index. It currently yields 5.6%.The fund's managers, led by Andrew Norelli, have a flexible mandate. They are free to invest in any sector and any bond they deem attractive, whether it's rated investment grade (triple-A to triple-B) or below, or whether it is short or long in maturity.Become a smarter, better informed investor. Subscribe from just $107.88 $24.99, plus get up to 4 Special IssuesProfit and prosper with the best of expert advice on investing, taxes, retirement, personal finance and more - straight to your e-mail.Profit and prosper with the best of expert advice - straight to your e-mail.That leeway, along with good bond-picking, has enabled them to deliver above-average returns with below-average volatility since the exchange-traded fund's late-2021 launch.Over the past three years, "even the Aggregate Bond index has had twice the volatility and returned less," says Norelli.Lately, the managers have favored short-term securitized loans, which Norelli says offer more income than other bonds, including government and corporate debt, without lowering the quality of the portfolio. At last report, nearly 66% of the portfolio held securitized debt, much of it in government-guaranteed mortgage-backed bonds.Norelli and his comanagers have an optimistic outlook for 2026, in part because of good economic growth numbers in recent quarters. But certain risks, such as central bank moves and the continued gradual shift away from the dollar as the primary currency for international trade and government reserves, make them cautious about interest rates and bonds with long-term maturities.The fund's current two-year duration (a measure of interest rate sensitivity) is relatively low for this strategy, which at other points in recent years has been as high as six years. (Bond prices and yields move in opposite directions; a two-year duration implies a 2% drop in net asset value if interest rates rise by one percentage point, and vice versa.) The duration of the Agg index, at last report, was 5.8 years.Note: This item first appeared in Kiplinger Personal Finance Magazine, a monthly, trustworthy source of advice and guidance. Subscribe to help you make more money and keep more of the money you make here.Profit and prosper with the best of Kiplinger's advice on investing, taxes, retirement, personal finance and much more. Delivered daily. Enter your email in the box and click Sign Me Up.Nellie joined Kiplinger in August 2011 after a seven-year stint in Hong Kong. There, she worked for the Wall Street Journal Asia, where as lifestyle editor, she launched and edited Scene Asia, an online guide to food, wine, entertainment and the arts in Asia. Prior to that, she was an editor at Weekend Journal, the Friday lifestyle section of the Wall Street Journal Asia. Kiplinger isn't Nellie's first foray into personal finance: She has also worked at SmartMoney (rising from fact-checker to senior writer), and she was a senior editor at Money.