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Consider the alternatives beyond traditional assets

J.P. Morgan Asset Management offers a spectrum of innovative alternative investment solutions to help provide new sources of returns, generate income and portfolio diversification.
 

Find out more about the JPMorgan Global Macro Opportunities Fund

 

 

 

Alternatives - a timely opportunity

Given heightened volatility in equity markets and lower yields in fixed income, today’s market environment means investors need to consider non-traditional investment opportunities to meet their investment objectives.

Alternative investments are now being considered by more investors as an option that can offer both diversification* and relatively attractive yield opportunities. Alternatives cover a broad range of assets spanning real estate, infrastructure, transport, private equity, private credit, liquid alternatives and hedge funds.

Low yields Low correlation
Low yields

Alternatives in a world of low yields 

As alternatives can behave differently to traditional assets, they can provide relatively attractive yield# opportunities in the current ultra-low interest rate environment. 

Alternative sources of income

Source: BAML, Barclays, Bloomberg, Clarkson, Cliffwater, Drewry Maritime Consultants, Federal Reserve, FTSE, MSCI, NCREIF, FactSet, J.P. Morgan Asset Management. Yields are as of 31.03.2020, except Direct Lending, Global Infrastructure, Europe and Asia Pacific (APAC) Real Estate (31.12.2019). Global Transport: Levered yields for transport assets calculated as the difference between charter rates (rental income), operating expenses, debt amortisation and interest expenses, as a percentage of equity value. Yields for each of the sub-vessel types are calculated and respective weightings are applied to arrive at the current levered yields for Global Transportation; Preferreds: BAML Hybrid Preferred Securities; Direct Lending: Cliffwater Direct Lending Index; U.S. High Yield: Bloomberg US Aggregate Corporate High Yield; Global Infrastructure: MSCI Global Infrastructure Asset Index-Low Risk; U.S. Real Estate: NCREIF-ODCE Index; Global REITs: FTSE NAREIT Global REITs; International Equity: MSCI AC World ex-U.S.; US 10-year: 10-year US Treasury yield; US Equity: MSCI USA, Europe real estate references Europe core real estate: IPD Global Property Fund Index – Continental Europe. APAC real estate references APAC core real estate: IPD Global Property Fund Index – Asia-Pacific. Euro Govt. (7-10 year.): Bloomberg Barclays Euro Aggregate Government–Treasury (7-10 year). Data is based on availability as of 31.05.2020.
# Yield is not guaranteed.  Positive yield does not imply positive return.

Low correlation

Alternatives for uncorrelated returns

Generally, alternative investments have a low correlation to traditional assets such as equities and bonds and can offer diversification benefits to an overall portfolio. Increasingly, investors are looking to invest in strategies built to deliver uncorrelated returns to traditional asset classes. Even within alternatives, one asset can behave differently from another, providing additional diversification.

Quarterly returns of public and private market correlations

Source: MSCI, Bloomberg Barclays, NCREIF, Cliffwater, Burgiss, HFRI, J.P. Morgan Asset Management. RE – real estate. Global equities: MSCI AC World Index. Global Bonds: Bloomberg Barclays Global Aggregate Index. US Core Real Estate: NCREIF Property Index – Open End Diversified Core Equity component. Europe Core Real Estate: IPD Global Property Fund Index – Continental Europe. Asia Pacific (APAC) Core Real Estate: IPD Global Property Fund Index – Asia-Pacific. Global Core Infrastructure: MSCI Global Quarterly Infrastructure Asset Index (equal-weighted blend). US Direct Lending: Cliffwater Direct Lending Index. Global Private Equity: Cambridge Associates Global Private Equity Index. US Venture Capital: Cambridge Associates U.S. Venture Capital Index. Hedge fund indices include equity long/short, relative value, and global macro and are all from HFRI. All correlation coefficients are calculated based on quarterly total return data for the period 30.06.2008 – 30.09.2019. Returns are denominated in US dollars (USD). Data is based on availability as of 31.05.2020.
*Diversification does not guarantee investment return and does not eliminate the risk of loss.

Our Alternatives platform

With 50 years of delivering innovative alternative solutions across market cycles, our alternative investment engines are managed by highly specialised independent teams, backed by the global reach, vast resources and robust governance of J.P. Morgan Asset Management.

Through our Alternatives platform, we provide a spectrum of innovative investments that can play a key role in providing new sources of return and portfolio diversification.

Hear from our experts

Kerry Craig, our global market strategist, discusses our views on alternatives. He explores how the pressure to find uncorrelated assets for potential income and diversification* has lifted the importance of the asset class, in particular real assets, for many investors.

Our Alternatives Capabilities

290+

Investment Professionals^

US$ 144 billion

AUM*

14

Investment Offices Worldwide

Outcome-Focused Strategies

EXPERTISE

Clients benefit from the specialist knowledge and global reach of our independent alternative investment teams.

PROCESS

Our outcome-oriented investment approach is based on proven fundamental and quantitative research, and a deep understanding of global markets.

RESULTS

As one of the world's largest Alternative asset managers, we have over 50 years of experience delivering innovative alternative strategies across market cycles.

Source: J.P. Morgan Asset Management, as of 31.03.2019. *AUM figures are representative of assets managed by the J.P. Morgan Global Alternatives group, and include some AUM managed by other J.P. Morgan Asset Management investment teams. ^Includes portfolio managers, research analysts, traders and investment specialists with VP title and above.

Focused solution

JPMorgan Global Macro Opportunities Fund

Learn more

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Our insights

With one of the longest track records in alternatives investing, our team has met and endeavours to continue to meet investor needs in different market conditions. Explore more of our insights.

Guide to Alternatives

This is a sister publication to Guide to the Markets, delivering insight on macro topics like fundraising and manager dispersion, while also diving into real estate, infrastructure & transport, private credit, private equity and hedge funds in detail.

Read more

Global Alternatives Outlook

A rising rate environment, combined with lingering uncertainty about trade, should lead market volatility higher. The question for investors is how to respond.

Read more

2020 Long-Term Capital Market Assumptions

The 2020 edition of J.P. Morgan Asset Management's Long-Term Capital Market Assumptions draws on the best thinking of our experienced investment professionals worldwide.

Discover LTCMA
View all Insights
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For more information, please call or email us. You can also contact your J.P. Morgan representative.

1800 576 100 (Application enquiries)

1800 576 468 (General enquiries)

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