JP Morgan Australia enters wholesale market
JP Morgan Asset Management has spread its presence in Australia by setting up a wholesale business and launching two new funds.
Chief executive officer of JP Morgan George Gatch claimed there was a huge opportunity for the company’s global funds in the Australian wholesale market, which accounts for around $500 billion.
“We have a strong presence across the Asia Pacific region and this launch will extend our comprehensive investment capabilities to Australian investors, while underscoring our commitment to the Australian market,” he said.
The $20 million JP Morgan Global Strategic Bond Fund was launched as an unconstrained strategy that centres on global fixed income and currency markets.
International chief investment officer of global fixed income Nicholas Gartside said the firm aimed to have a fund where it beat cash by 3 per cent over a rate cycle of three-to-five years.
“What we seek to do is allocate to bond markets that we think are going up in a very crude sense. We’ve got a global opportunity set, as opposed to a narrow country or sector opportunity set, and we have a dynamic asset allocation,” he said.
“If we think the bond market is going up we will allocate to it. So it’s a benchmark unaware.”
Gartside believes inflation will drive the Reserve Bank of Australia to raise interest rates to between 3.5 and 3.75 per cent in a year’s time.
The $1 million JP Morgan Emerging Markets Opportunities fund aims to beat the MSCI Emerging Markets Index (total return net) using a concentrated, high conviction, value-oriented portfolio strategy.
“The ethos behind the portfolio is to buy value-oriented companies in cheap unpopular countries; cheap countries, cheap currencies, and good companies is really what we’re trying to do,” chief investment officer and head of the emerging markets equity team Richard Titherington said.
He said that because currency weakness was the biggest risk in emerging markets, it was better to own companies in sectors that would benefit if currencies fall.
Titherington said Brazil, India, China and Russia were the cheapest major markets in the world.
“They are all cyclically depressed and those are the places that we’re finding the biggest opportunities right now,” he said.
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