LONDON: J.P. Morgan's Sheikh says search for income is a 'global challenge' - JPM Multi-Asset Income Fund celebrates three- year anniversary with a yield over 5%
Jul 23, 2012
London, 23 July 2012: On the three- year anniversary of the JPM Multi-Asset Income Fund, Talib Sheikh, one of the fund's managers, talks about how the flexibility and diversity of the fund has allowed the team to seek out the very best income generating opportunities and how the search for that income is now a ‘global rather than a domestic challenge.'
Although the fund's primary aim has been to produce a high level of income, currently yielding over 5%, this has not been at the expense of capital appreciation with the fund having returned over 35% since launch in July 2009.
Sheikh explains: "With a prolonged low interest rate environment in the UK and around the world, income has become extremely precious. Having the flexibility to invest anywhere and allocate assets tactically has never been more essential.
"Key to the performance of the fund is the breadth of the opportunity set. Asset allocation has always been the key driver for portfolio returns. We are seeing compelling opportunities in the high yield market; where the risk taken is rewarded with a highly attractive yield. Alongside high dividend yielding developed market equities, the emerging markets are becoming more disciplined in their corporate governance and we're beginning to see more opportunities for income there. We believe in defensive companies that produce an attractive yield through strong and predictable cash flows associated with industries such as utilities and infrastructure. Our ability to look at these asset classes alongside others such as REITs, convertible bonds and emerging market debt, provides an asset allocation range that allowed the fund to significantly outperform its IMA (Investment Management Association) peers."
On the importance of diversification, Sheikh said: "Accessing income is not only a global challenge but one that needs to pay heed to the age old lessons of diversification. We're conscious of the impact that adverse news flow can have on an individual stock and its dividends, and the greater effect that, in turn, can have on an entire portfolio. ‘Indeed, over the past few years some of the biggest UK equity income staples have hit the headlines for the wrong reasons. The JPM Multi-Asset Income Fund currently holds a diversified mix of over 700 securities so should any individual position face a problem, the exposure to that security and hence the impact on the portfolio as a whole, should be minimal. As a result, investor capital will remain more stable and income more steady."
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Notes to Editors
About J.P. Morgan Asset Management
J.P. Morgan Asset Management is part of JPMorgan Chase & Co. and is a global asset management leader providing world-class investment solutions to clients. With US$1.3 trillion in assets under management (the Asset Management client funds of JP Morgan Chase & Co. as at 30 June 2012) and offices in 41 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: 25 Bank Street, Canary Wharf, London E14 5JP.
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