JP Morgan fund not paying interest and dividends

MichaelL

MichaelL

Recycles dryer sheets
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I have shares of JSRAX which is a mixed stock and bond fund-of-funds in an IRA that was transfered from a 401k after I left the company and JP Morgan was the corporate 401k manager. I was going through my records and saw that it hasn't paid any interest or dividends for 2022. I have been reinvesting and not taking the income but I was looking at the records to calculate the rate of return.

It usually pays about 3 - 4 % in interest and dividends quarterly. Each December there have been capital gains payouts for the years that I have had it, but I'm not expecting any this year as it is down about 14% from last December. I called JP Morgan and asked why there were not any payouts. The person didn't know anything about that, but did tell me that an unspecified payout was coming in December.

I am wondering how they can just not make the payouts and not say anything, since the earnings come from the underlying bonds and dividend paying stocks. I'm waiting to see how much the payout is in December and then possibly I'll transfer the IRA to another broker and swap out the fund for a better one.

Has anyone had a similar experience?
 
clobber said:
The fund being down for the year has very little to do with the end of year distributions. According to JP Morgan estimates, it should be around 0.22 per share for 2022 for JSRAX The fund still still sold a lot of shares (for a gain) during the year.
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I'm saying that I'm not expecting any capital gains distributions. I certainly expect interest and dividends. 0.22 per share represents a typical 4th Qt. interest and dividend distribution. The question is what happened to my other 3 distributions for the first 3 Qts of the year?
 
One time long ago I wasn’t paid a distribution on one of my mutual funds and I had to call and they tracked it down. Never happened again.

So you probably need to call your broker.
 
audreyh1 said:
One time long ago I wasn’t paid a distribution on one of my mutual funds and I had to call and they tracked it down. Never happened again.

So you probably need to call your broker.
Click to expand...

I did call the broker. The person I talked to didn't know what happened. They said that they'd look into it. The quarterly statements don't show any distributions. They didn't pay any. It's not that my payment went missing. They just didn't pay any.
 
clobber said:
The fund being down for the year has very little to do with the end of year distributions. According to JP Morgan estimates, it should be around 0.22 per share for 2022 for JSRAX The fund still still sold a lot of shares (for a gain) during the year.
Click to expand...

I read the document that you linked to. It does show the .22 as a long term capital gain. So the question now is where are the 4 interest and dividend payments. I was usually getting 3 - 4% return not counting capital gains.
 
All the documentation I can find online shows there were no distributions since 2021.
It was a bad year for income funds and this one is a fund of income funds.

Assuming you bought this fund of funds for income, with all the management expenses, 12B-1 charges, no distributions… I would drop this fund like a hot dish and build a ladder with today’s high yields. You likely can get 6%+ in a taxable ladder right now.
 
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COcheesehead said:
All the documentation I can find online shows there were no distributions since 2021.
It was a bad year for income funds and this one is a fund of income funds.

Assuming you bought this fund of funds for income, with all the management expenses, 12B-1 charges, no distributions… I would drop this fund like a hot dish and build a ladder with today’s high yields. You likely can get 6%+ in a taxable ladder right now.
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Yeah that's what I'm thinking. I'll take the distribution in December, and then transfer the money to another account and reinvest it all. This was a surprise. In other years the payouts were decent.
 
I'm surprised it isn't incumbent and a requirement for a fund to notify its investors when there is a change in the dividend/dividend schedule !!!!!
 
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COcheesehead said:
All the documentation I can find online shows there were no distributions since 2021.
It was a bad year for income funds and this one is a fund of income funds.

Assuming you bought this fund of funds for income, with all the management expenses, 12B-1 charges, no distributions… I would drop this fund like a hot dish and build a ladder with today’s high yields. You likely can get 6%+ in a taxable ladder right now.
Click to expand...

It's a curious thing. It's understandable that capital gains distributions will vary year-year. And I also saw that no divs were paid in 2022, but were consistent in 2021.

But even in a bad year for an income fund, wouldn't there still be dividends, and would those not need to be distributed? Or does being a "fund of funds" warp this in some way?

-ERD50
 
ERD50 said:
It's a curious thing. It's understandable that capital gains distributions will vary year-year. And I also saw that no divs were paid in 2022, but were consistent in 2021.

But even in a bad year for an income fund, wouldn't there still be dividends, and would those not need to be distributed? Or does being a "fund of funds" warp this in some way?

-ERD50
Click to expand...

I just wondered if the expenses ate the small amount of dividends.
 
frayne said:
I'm surprised it isn't incumbent and a requirement for a fund to notify its investors when there is a change in the dividend/dividend schedule !!!!!
Click to expand...

I asked that question to the person who I talked to at JP Morgan. They didn't have an answer. I told him that he should be asking the fund manager what is going on and that I was really disappointed and would likely close my account.
 
COcheesehead said:
I just wondered if the expenses ate the small amount of dividends.
Click to expand...

In past years the dividends were pretty good and so were the capital gains. This year my return will be about 1.55%. Previously the dividends were 3 - 4% and with capital gains the return was much higher. This is an income fund with no income. I'm not sure what is going on with these people but it doesn't reflect well on them.
 
MichaelL said:
In past years the dividends were pretty good and so were the capital gains. This year my return will be about 1.55%. Previously the dividends were 3 - 4% and with capital gains the return was much higher. This is an income fund with no income. I'm not sure what is going on with these people but it doesn't reflect well on them.
Click to expand...

In today’s fixed income environment, I’d be gone in a heartbeat.
 
COcheesehead said:
In today’s fixed income environment, I’d be gone in a heartbeat.
Click to expand...

I've been laddering CDs, agency bonds and treasuries with the money that was sitting in a savings account. I will probably do the same with this money in January.
 
I took a look at the Annual and Semi-Annual Reports available at https://am.jpmorgan.com/JPMorgan/TADF/4812A2199/AR?site=JPMorgan

The one thing that I noticed in 2022 was the large amount of net redemptions by shareholders in the first half of 2022. IMHO, This would be consistent with a bond fund in a rising interest rate environment.

The question that I have, which I have been trying to track down, is do any of the gains/losses inherit in these capital share transactions (ie net redemptions) satisfy the requirement to distribute net income of the fund, or are these treated separately.

I suspect that at a minimum, if any assets sold are held by the fund SHORT TERM, and are sold for a loss to satisfy redemptions, then this would offset dividend income received by the fund.

Perhaps someone more knowledgeable than me can shed light on this.

-gauss
 
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MichaelL said:
I asked that question to the person who I talked to at JP Morgan. They didn't have an answer. I told him that he should be asking the fund manager what is going on and that I was really disappointed and would likely close my account.
Click to expand...
The person you are talking with probably doesn't know who the fund manager is. They're likely not an employee of the fund company but an agent working for a provider to the fund company. You would be best served putting your issue on paper and save the trail. You might want to look at any correspondence from the fund; it's unusual for it not to be pre-announceed if dividends aren't being paid.
 
MRG said:
The person you are talking with probably doesn't know who the fund manager is. They're likely not an employee of the fund company but an agent working for a provider to the fund company. You would be best served putting your issue on paper and save the trail. You might want to look at any correspondence from the fund; it's unusual for it not to be pre-announceed if dividends aren't being paid.
Click to expand...

At this point it doesn't matter. Their quarterly statements show that they didn't make any disbursements so far this year and that they are only making a .22 cent per share disbursement in December which represents 1.5%. It isn't worth keeping.
 
I have had this fund for about ten years and it has returned about 8% on average including interest, dividends and capital gains, until this year. It was my 401k from a job that I left in 2011.

Given the recent increase in interest rates I ran a trend report on all of my investments to see if I should reallocate and this one was still showing a good return for the last 12 months, but declining over previous years.

I checked the individual transactions and saw that there were not any for 2022 but that the large December 2021 disbursement that was being averaged in made it look like it was still doing okay over 12 months. Previously this fund had 5 disbursements per year.

Now I have examined the 2022 transactions for all of my accounts and calculated a more accurate rate of return that does not average in the December disbursements which were unusually large. I will redo this in January after I see the December disbursements. I have put much of my free cash into laddered CD's, agency bonds and treasuries. I most likely sell this poor performing fund and reallocate the money.

I should have kept better track of these investments, but I spent more time examing spending and not enouch on examing income. I have fixed that now. While the missed income bothers me, at least I've earned enough overall that I'm doing fine, but lesson learned about the effects of the rate changes and the need to look more closely at payouts.
 
If you read the prospectus, it only indicates an expectation of annual payouts. More importantly, the payment of a dividend or capital gain simply lowers the NAV of a mutual fund so it has no real impact on the total return of the fund. One fund could make no dividend payouts and still have a higher actual return than a fund paying a 5% dividend.
That you were seeing 8% payouts does not mean that the fund was returning 8% either. The dividends could have been a payout of capital. The actual return on the fund may have been more or less than 8%. A decision to keep or sell a fund to me should be based on the total return and how that compares to what would be expected of a fund with like goals and strategies. I would fire the broker though if they have sold you something that they cannot explain and did not arrange to find out answers to all of your questions. Depending on the amount you have invested, they may be able to put you in direct contact with the fund management company that is actually managing your money.
 
marinauser said:
If you look at https://www.morningstar.com/funds/xnas/jsrax/performance
you will see that returns have varied significantly from year to year like most investments. Since 2015, returns have varied from -4.7% to over 13% with 2022 returns being the worst negative year like most bond/income funds at -14%
Click to expand...

I am down about 14% since last December as far as the value of my shares. I expected that. Much of the 8% was due to an increase in NAV. This is an income fund with a large percentage in bonds. Some of the payouts were due to an increase in NAV but many were interest payments from the bonds. What I don't understand why there have not been any interest payments this year.

I have tracked my total value of this fund for 10 years. I have been tracking this fund (and all of my investments) in detail since the end of 2018 using a program that pulls the transactions so that I don't have to go and read that statements.

I am still reinvesting but these were all payouts that I could have taken in cash to my bank for 2021, but nothing for 2022. You can see that some are income, some are long term capital gains and some are short term capital gains. This is from the management program.

12/31/2021 JPM SmartRetirement Income - A-INCOME REINVEST 0.21223 $4,951.75
12/16/2021 JPM SmartRetirement Income - A-CAP GAIN REIN 1.34229 $28,857.09
12/16/2021 JPM SmartRetirement Income - A-ST TERM CG REIN 0.07352 $1,580.56
10/1/2021 JPM SmartRetirement Income - A-INCOME REINVEST 0.05667 $1,214.43
7/1/2021 JPM SmartRetirement Income - A-INCOME REINVEST 0.07963 $1,698.88
4/1/2021 JPM SmartRetirement Income - A-INCOME REINVEST 0.06326 $1,344.74
1/4/2021 JPM SmartRetirement Income - A-INCOME REINVEST 0.15033 $3,168.17
 
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