Income investors profit from multi-asset diversity

J.P. Morgan Asset Management has reported a strong yield from its Multi-Asset Income Fund, just sixteen months since inception - and as a result is seeing increasing interest from investors looking to capitalise on the broad range of income assets offered by the fund.

The JPM Multi-Asset Income Fund, launched in June 2009, aims to maximise income, maintain a balanced portfolio of assets and provide an alternative to other traditional income sources. The portfolio is designed to have lower risk than equity income funds. It pays quarterly dividends which favour basic rate and higher rate taxpayers. The Fund is a global diversified portfolio of high yield bonds, high dividend stocks, REITs, corporate bonds and emerging market debt, with tactical shorter term positions in non-agency mortgages and convertible bonds. It paid a consistent yield of 5.3% at its fourth dividend and has demonstrated a strong performance of over 27% since inception.

Olivia Mayell, Client Portfolio Manager for the JPM Global Multi-Asset Income Fund said: "As market sentiment improves and we have seen some improving evidence of economic recovery, the JPM Multi-Asset Income Fund has capitalised on attractive opportunities such as high yield bonds, the recovery in convertible bonds and the case for emerging markets driving global growth. The current portfolio is well balanced across a variety of bond and equity assets which has driven strong returns and offset risk in the current economic climate.

"The diversification of the fund is also reflected geographically and we are seeing some fantastic opportunities outside of the UK at present. By investing outside domestic markets we can take tactical positions in the fund and this can enhance yield. Current investment trends have shown people to be more confident investing outside the UK, and the fund takes advantage of opportunities in Asia, Europe and the US, meaning investors can benefit from a mix of developed and emerging markets."

The £32million JPM Multi-Asset Income Fund is managed by Neil Nuttall, Talib Sheikh and Michael Schoenhaut, part of the same Global Multi-Asset team as the £700m OSBR A rated JPM Cautious Total Return Fund. The fund enables income seeking investors to have active asset allocation globally and to capture the best income opportunities globally.

Speaking about the current positioning of the fund, Mayell said: "We currently have no exposure to investment grade corporate bonds as there are better yields elsewhere at the moment. We have moved up the risk spectrum to find more attractive exposure to other credit assets and equities. With rising investment opportunities in the US, Europe and particularly in emerging markets, assets such as convertibles, Global REITs and a wide range of other sectors still look attractive. Another advantage of the fund is that there is no currency risk for investors as we hedge non-sterling exposure within the portfolio, minimising exposure to currency market volatility. The JPM Multi-Asset Income Fund provides an ideal opportunity for investors seeking very attractive income in a low interest rate environment."