JPMAM launches diversified real return fund
The head of UK institutional at JP Morgan Asset Management, said the fund would be based on a strategy launched by the firm’s Global Multi-Asset Group the US in 2011. It will blend inflation-linked bonds with real assets and inflation-sensitive equities to produce a portfolio that can outperform inflation and provide a positive return in a range of inflationary or economic conditions.
Mr Stainsby said: “The popularity of index-linked government bonds in the past few years of above-target inflation has driven yields down to extremely low levels.
The JPM Diversified Real Return fund has been designed for investors who want to diversify their exposure beyond index-linked bonds to other inflation-sensitive assets.
“Its ability to invest across many inflation-sensitive asset classes makes it appropriate for those who want to achieve real returns and recognise the problems that an inflationary environment can pose to long-term investors.”
The fund is structured as an Oeic under the Ucits rules and is registered for sale in the UK and Jersey. The minimum investment is £1000 lump-sum or £100 a month. The fund’s official benchmark is the 1-10 Year Barclays Capital Index-Linked Gilts Index but the fund aims to achieve an annual return (before fees) of 3 per cent in excess of the UK retail price index, with 40 per cent to 60 per cent of the volatility of equities.
Meera Patel, senior analyst for Bristol-based Hargreaves Lansdown, said: “The proof will be in the pudding with this fund. JP Morgan only launched a similar strategy in the US in 2011 so hardly a long enough track record to go buy. It will need to compete with the likes of Newton Real Return and the Trojan fund if it wishes to be successful managing this strategy.”