The fund aims for income and growth by investing only in the best ideas generated by global chief investment officer for fixed income Bob Michele and his investment team.
Michele has over 30 years experience in managing fixed income portfolios. He joined JPMorgan in 2008 and previously spent 10 years at Schroder Investment Management.
Unlike traditional bond funds, this does not have a target yield and is not designed to provide a consistent income stream. Instead it looks for the most atractive returns from across the fixed income spectrum, giving it the flexibility to switch into different pockets of opportunity when market conditions change.
Michele and his team are not bound by benchmark weightings, which leaves them free to invest wherever they spot opportunities. If Michele does not like an area of the fixed income market, he will not buy it.
At least 80 per cent of the portfolio will be invested in sterling denominated bonds, or hedged back into sterling, to reduce currency risks.
When constructing the portfolio, Michele will draw together the market insights of JPMorgan Asset Management’s fixed income sector specialists. He will initially take a top-down approach, looking at credit ratings and identitying any potential catalysts of triggers for change. This information feeds into the analysis from sector specialists in areas such as government bonds, corporate bonds, emerging market debt, mortgage and real estate and high yield. Key investment themes are produced form this, taking into account factors such as valuation, credit rating and liquidity.
This fund’s flexibility is its main strength as unlike traditional bond funds, it will not be confined to a particular area when market conditions start to favour other fixed income markets. It may appeal to investors who want to take advantage of historically high yields.
However, it is more adventurous than traditional bond funds as it invests in areas such as emerging market debt, so the investment risk may also be higher.