JPMAM launches Emerging Markets Currency Alpha Fund

J.P. Morgan Asset Management has launched the JPM Emerging Markets Currency Alpha Fund, to benefit from the exciting investment opportunities in emerging market currencies.

The UCITs III absolute return fund will be managed by experienced currency specialists, Amit Tanna and Harry Bazzaz. The Fund has a target return of EUR cash +8% and intends to maximise the diversification and return benefits inherent in emerging markets.

Amit Tanna, co-manager of the JPM Emerging Markets Currency Alpha Fund comments: "There is a structural case for investing in emerging markets, and currencies are a critical part of that equation. Domestic demand is likely to be an increasing contributor to growth, and this is expected to continue to attract capital flows and enhance productivity. These trends will likely support EM currencies from a long-term structural perspective.

However, relative value ‘alpha' opportunities are becoming a more important source of return and this is a key focus of this fund - with the majority of currency flows in emerging markets being non-profit motivated, inefficiencies arise and can provide real ‘alpha' potential."

The Fund aims to take advantage of these inefficiencies and the significant divergences in emerging market countries such as their differing economic cycles, policy stances and valuations.

Tanna emphasises, "Not all EM countries were created equal. Differences in fundamentals provide a significant opportunity to exploit relative value trends within emerging markets." In addition, the returns generated from these strategies are uncorrelated with other asset classes.

The management team is supported globally by fourteen strategists and analysts, with on the ground presence in many emerging countries such as Brazil, India and China providing key input into the research process. The disciplined investment framework utilises proprietary quantitative and qualitative strategies in the construction of the portfolio.