JPMorgan Asset Management launches D&A

JPMorgan Asset Management (JPMAM) announces the launch of D&A – JPM Duration & Alpha Funds - a range of products aimed at pension schemes interested in a “one stop LDI solution”. The funds offer a way to reduce pension schemes’ funding risk whilst at the same time, offering potential for excess returns relative to their liabilities.

The JPM Life Duration & Alpha Funds have been created as a straightforward way for pension schemes to match their liabilities and generate excess returns. The risk position can be stabilised by giving a scheme’s assets a similar duration and inflation profile to its liabilities, AND the funding position improved by the excess return generated through diversified investment strategies. By using the swaps to gain the desired duration and investing in multi-strategy funds, JPM Duration & Alpha constitutes a practical and flexible solution for cash-strapped pension funds in need of cost-efficient remedies. This is achieved through four open pooled structures, of different duration and inflation profiles, which will allow pension schemes to replicate, in an easy manner, part or all of their liabilities. These funds have an objective of generating a return of 2% in excess of their respective long duration benchmark. The structures are familiar and tax-efficient vehicles which enable pension schemes to avoid the hassle to deal derivatives themselves.

Simon Chinnery, Senior Client Adviser at JPMorgan Asset Management said, “JPM D& A is a pragmatic alternative for pension funds that see the rationale for risk reduction but do not want to loose potential excess return by buying low yielding bonds. Our straightforward approach should make this an attractive proposition for pension schemes wanting a one-stop-shop to both reduce funding risk and enhance returns. We make this possible by utilising the breadth and depth of JPMAM experience in derivative management and alpha generation.”

The JPM D& A Funds are part of a global LDI offering from JPMorgan Asset Management, encompassing strategies for pension funds in Continental Europe and the United States. JPMAM focuses on solutions which offer return potential, recognising the need for pension funds to benefit from a long term investment horizon.