Making Income, the Outcome

Jul 01, 2009

  • Multi-asset income fund launched
  • Fund offers competitive yield to bolster income in low interest rate environment

London 1st July 2009 - With interest rates at historic lows, there has never there been more discussion around the search for yield and with this in mind, J.P. Morgan Asset Management have launched the JPM Multi-Asset Income OEIC with a target yield of 1 month GBP LIBOR  +2.5% gross.  However, under current conditions, a yield of 7 to 8%, or approximately 6% over 3 month LIBOR is expected.

The Fund will be different to many other UK retail funds, as it uses multiple asset classes to meet this income target requirement, rather than simply equity income. The fund will invest in a diversified mix of high yielding securities ranging from global equities including high dividend companies and REITs and global fixed income including investment grade, emerging market debt, high yield corporates and convertibles.  As many of these assets classes were affected by last year’s market disruption, this is an excellent time to be using these assets for income.

The UCITs III fund will be managed by Michael Schoenhaut and Michael Fredericks from the US. The portfolio is designed to imitate as closely as possible the US domestic fund, the JPM Income Builder Fund, launched in May 2007 and the more recently launched JPM Global Income SICAV, which is up over 12% excluding yield since its launch in December 2008.

The GBP denominated fund will distribute income quarterly, will sit within the IMA Specialist sector and is set to compete directly with existing offerings from Invesco Perpetual, Jupiter and Schroders.

Jasper Berens, head of UK retail sales at J.P. Morgan Asset Management commented: “It’s clearly not easy to find a good level of income return on your cash at present and we believe this fund offers a competitive yield, seeking income opportunities globally whilst offering diversity across asset classes. This enables the managers to take advantage of asset classes as and when they feel is appropriate. We believe this is absolutely the right fund to launch, particularly in this economic environment, where income asset allocation decisions are crucial yet understandably daunting for the end investor especially with yields so low. J.P. Morgan Asset Management, through this fund, will take away the confusion and make those decisions so the investor does not have to, delivering a consistent and decent level of income in a historically low interest rate environment.”

Berens continued: “As this is purely an income fund, it is a perfect complement to any portfolio looking to supplement existing income targets and of particular interest to those wishing to supplement income in retirement. J.P. Morgan Asset Management’s global expertise across asset classes and intricate knowledge of local markets is crucial to the success of this fund and we’re confident we will deliver, what will be a very decent level of return.”

 - Ends -

For further information please contact:
Ben Larter: Media Relations
Telephone: 020 7742 2112

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 March 31st 2009) 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.

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