JP Morgan Fleming Asset Management has launched three fixed income portfolios in its Luxembourg Sicav.
The JPMF Global Short Duration fund and JPMF Europe Short Duration fund were created to give investors the security of liquidity funds with less volatility than full duration bond funds.
On the other hand, the JPMF Europe Credit fund has been created to capitalise on the growth of the European corporate bond market.
As with the short duration funds, the JPMF Europe Credit fund complements the company's existing fund range, giving investors pure access to European investment grade corporate bonds.
Short duration funds can be used alone or in combination with liquidity and/or full duration products. While liquidity funds and full duration products sit at opposite ends of the risk return spectrum, short duration products sit between these two extremes.
According to JP Morgan Fleming, this gives investors the same type of security as money market funds; less volatility than with long-term bond investments; and the ability to provide better protection against negative returns than full duration products when bond yields are low.
The investment approach for the three fixed income funds is based on actively allocating risk exposures across interest rates, credit spreads and currency levels.
The investment philosophy is founded on the belief that differences in interest rates, credit spreads and currency levels can be exploited to maximise fixed income returns.
To determine interest rates the team uses fundamental analysis, quantitative models and qualitative inputs to forecast performance in the world's major bond markets. These forecasts are then formulated in duration, country and yield-curve strategies. Credit is selected through a bottom-up decision making process, focusing on pure security selection. Currency is determined by proprietary fundamental and technical analysis to capitalise on the best foreign exchange opportunities for the funds.
Minimum investment is e10,000. There is an initial front end fee of 3% and an annual management charge of 0.7%.
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