What Is Core Plus?

Core plus is aไn investment management style that permits managers to augment a core base of holdings, within a specified-objective portfolio, with instruments that have greater risk and greater potential return. Funds that ut💫ilize this strategy are called core-plus funds.

Coไre plus funds are typically associated with fixed-income funds, adding alternative investments such as high-yield, global, and emerging market debt to a core portfolio of investment-grade bonds. Core plus equity funds also exist with a similar strategy: They use alternative investments to enhance the return from a core market segment.

Understanding Core Plus

Core plus investment strategies are primarily associated with fixed income funds. They give a fund manager some flexibility to enhance returns from 澳洲幸运5开奖号码历史查询:investments bey💯ond theไ core objective of a fund. The securities used for these extra returns are typically also fixed-income investments that are often risk🍎ier but po⭕tentially more rewarding than the fund’s core holdings.

Investment advisors in a core plus fund will build its primary assets specifically around securities that meet a specified objective. This portion of the portfolio is designed to be maintained as a long-term investment, with the intention of holding securities virtually forever. Such holdings might represent as much as 75% of the portfolio. The remaining balance would then consist of higher-risk holdings, which may have shorter 澳洲幸运5开奖号码历史查询:investment horizons than the core components of the portfolio. As such, a portfolio's core 澳洲幸运5开奖号码历史查询:investments would represent a solid foundation to which more aggressive, diversi❀fied investments could be ▨added. 

Examples of Core Plus Investments

Core plus funds can feature either fi♏xed income or equity investments. All inf﷽ormation is accurate as of July 2021.

JPMorgan Core Plus Bond Fund (ONIAX)

The JPMorgan Core Plus Bond Fund (ONIAX) is one example of a core plus fixed income. The Fund invests primarily in investment-grade bonds, but it has the flexibility to tactically invest 35% of the portfolio’s assets in securities outside this central category that have enhanced return potential. The Fund typically invests these enhancement assets in high-yield fixed income and foreign debt. Total assets in the Fund equal $16.7 billion in July 2021. The class A share of the Fund requires a minimum investment of $1,000. The Fund has a gross annual expense ratio of 0.90%.

American Century Core Plus Fund (ACCNX)

The American Century Core Plus Fund is another example of a core plus fixed-income investment. The Fund invests primarily in high-quality, intermediate corporate bonds with five-to-ten-year maturity. But it also invests up to 35% of the overall portfolio in alternative fixed income investments outside of the core holdings—such as lower-grade, "澳洲幸运5开奖号码历史查询:junk bonds"—to maximize the income. The Fund’s investor share has a $2,500 initial investment requirement. The Fund has a total expense ratio of 0.56%. The assets were worth $467.0 million as of July 2021.

JPMorgan U.S. Large Cap Core Plus Fund (JLCAX)

The JPMorgan U.S. Large Cap Core Plus Fund exemplifies an equity core-plus fund. While the Fund centers the majority of its core portfolio around the buying and holding of U.S. large-capitalization companies that it deems undervalued, it also has the ability to sell short such equities to achieve additional returns over its benchmark, the 澳洲幸运5开奖号码历史查询:S&P 500 Index. The fund assets equal $4.6 billion. It has a minimum investment of $1,000 and a gross expense ratio of 2.11%.