Email Print

"HIGHBRIDGE OVER TROUBLED WATER"

Apr 07, 2009

London, 7th April 2009:  With few asset classes producing consistently positive returns in these chaotic market conditions, nervous investors may feel that there is little in the way of shelter.  However, by using a statistical arbitrage strategy and maintaining a market neutral stance to investing, the JPM Highbridge Statistical Market Neutral Fund (HSMNF) provides investors with the opportunity to continue to profit in volatile and falling markets, without exposing themselves directly to sector-specific weakness and the macro-economic winds of change. 

The J.P. Morgan Asset Management Highbridge* Statistical Market Neutral Fund has consistently bucked the trend of falling markets over the last year.  Delivering an annual return in 2008 of +10.03% (+5.33% since inception) the fund, which utilises a statistical arbitrage strategy, has a proven track record of providing consistent returns in diverse market environments.

Newly available to advisers via Cofunds, the UK's largest independent investment platform, this top performing fund continues to offer one of the most compelling investment opportunities in today’s turbulent markets. 

Jasper Berens Head of UK retail sales at J.P. Morgan Asset Management comments:  “We currently view our statistical arbitrage strategy as one of the most compelling opportunities to deploy capital in today’s market conditions.  The performance of the fund over the last year speaks for itself and investors and advisers looking to minimize their exposure to market volatility in the current environment should seriously consider this fund as a core part of their portfolio.”

The nuts and bolts of the HSMNF Strategy
The fund aims to provide a total return in all market environments in excess of the return on short-term instruments, through a market neutral strategy and using derivative strategies where appropriate, to gain exposure primarily to US equity securities. It focuses on the most liquid US stocks, predominantly large caps, with 100% long positions and 100% short, giving a zero net market exposure. By taking matching (offsetting) long and short positions, the portfolio hedges out common market or systematic risk and profits from movements in individual stocks irrespective of the direction in which the market moves. Though the underlying securities in the fund are US Blue Chip stocks, the fact that the fund is market neutral means that it's irrelevant what the underlying securities are.  The fund aims to achieve LIBOR + 4% to 6% on an annual basis.

Berens continues: “There is a vast demand for low volatility, low correlation, total return funds in the market and that is exactly what this fund offers. Highbridge has a long standing expertise and is one of the best known hedge fund managers globally. Higher volatility in markets and the increased demand for liquidity have combined to create a favourable environment for this strategy.  Designed to facilitate better performance in volatile and falling markets by maintaining a market neutral stance, the fund is an attractive proposition for investors whose tolerance for risk has waned over the last year. The HSMNF also benefits from low correlation to stocks and bonds, making it an excellent portfolio diversifier for investors with long-only equity holdings, whatever the market conditions. It’s inclusion on Cofunds now makes it far more accessible to retail investors and advisers seeking to consolidate their investments. The fund is also ideal for advisers looking for some stability of income flow from rebates at the moment.”

Darius McDermott, Managing Director of Chelsea Financial Services said: “There’s no doubt that investors are seeking shelter and some consistency in there investment returns. The JPM Highbridge Statistical Market Neutral Fund has navigated highly volatile markets to deliver a positive return with low volatility. Its addition to the Cofunds platform is equally appealing and offers retail investors a chance to access a sound and solid strategy with a proven ability to outperform.”

The outlook for 2009
In the year ahead, the US equity markets are likely to experience continued deterioration with record-high unemployment and continued uncertainty in the auto industry.  Continued volatility in the short to medium term equates to a favorable environment for the fund’s strategy, and the JPM Highbridge Statistical Market Neutral Fund is well positioned to exploit increased opportunity set on both the long and short side.  Continued demand for urgent liquidity may also benefit the fund’s liquidity-providing forecasts, as the model seeks to profit from short-term imbalances in supply and demand. 

* Highbridge Capital Management was founded in 1992 as an alternative investment manager and was acquired by JPMAM in December 2004. Currently 77% owned by JPMAM, Highbridge Capital Management manages assets of over $28 billion which makes JPMAM and Highbridge Capital Management combined, the world’s largest alternative asset management business.

For further information please contact:
J.P. Morgan Asset Management
Ben Larter
Tel: 020 7742 2112
Email: benjamin.g.larter@jpmorgan.com 

Lansons Communications 
Inez de Koning / Caroline Macleod-Smith / Lizzi Malley     
Telephone: 44 (0)20 7294 3623 / 44 (0)20 7566 9702 / 44 (0)20 7566 9717    
Email: inezd@lansons.com / carolinems@lansons.com / lizzim@lansons.com

Notes to Editors

J.P. Morgan Asset Management is part of J.P. Morgan Chase & Co. and is a global asset management leader providing world-class investment solutions to clients. With US$1.1 trillion in assets under management (the Asset Management client funds of J.P. Morgan Chase & Co. as at December 31th 2008) and offices in 40 locations around the world, J.P. Morgan Asset Management offers global coverage with a strong local market presence, and leadership positions in most asset classes.

J.P. Morgan Asset Management is a trading name of J.P. Morgan Asset Management Marketing Limited which has issued this material in the United Kingdom and which is authorised and regulated by the Financial Services Authority.  Registered in England No. 288553.  Registered office: 125 London Wall, London EC2Y 5AJ.

Any past performance referred to in this material is not a guide to future performance and the value of investments, and any income from them, can fall as well as rise.  Any tax concessions referred to are not guaranteed and their value will depend on the individual circumstances of investors.  Stock market linked investments carry a number of inherent risks.  These risks will increase where fluctuations in exchange rates impact on the value of any underlying investments or where the investment is exposed to smaller companies or emerging markets.  Investments in fixed income securities that are not rated as investment grade represent a greater risk to an investor’s capital.