Keeping the key objectives of yield, risk and return in mind, we seek to generate attractive risk-adjusted income for investors through different market cycles.

The portfolio has demonstrated the benefits of diversification through flexible asset allocation, outperforming peers in the various rising rate periods in the past five years, as illustrated in the chart below.

Our Fund's performance during rising rate periods

Source: J.P. Morgan Asset Management, Bloomberg. *Methodology is based on daily data. A ‘rate rise’ is defined as a 50 basis points (bps) increase in the US Treasury 10-year yield. Periods of rising rates: (1) 08.07.2016 to 15.12.2016; (2) 07.09.2017 to 30.01.2019; (3) 04.08.2020 to 21.03.2021. Fund return refers to USD (mth) class return, NAV to NAV in USD with income reinvested. Calendar year return: 2016 +7.4%; 2017 +10.6%; 2018 -5.0%; 2019 +14.8%; 2020 +4.7%; 2021 YTD as of 31.12.2021 +9.1%. Past performance is not a reliable indicator of current and future results.
^ Source: Morningstar, Inc, USD Moderate Allocation Category of HK SFC authorised funds (as of 21.03.2021, NAV to NAV in USD with income reinvested). SFC authorisation is not a recommendation or endorsement of a scheme nor does it guarantee the commercial merits of a scheme or its performance. It does not mean the scheme is suitable for all investors nor is it an endorsement of its suitability for any particular investor or class of investors.

INCOME FROM DIVIDENDS

The global economic recovery continues and the fundamental picture for global dividends look cyclically attractive as economies around the world reopen and pent-up consumer demand is materialising, supporting corporate earnings.

Quality equities could offer attractive opportunities of dividend income, as illustrated in the chart below.

Number of companies yielding greater than 3% by region

Source: FactSet, MSCI, J.P. Morgan Asset Management. EM refers to emerging markets. Past performance is not a reliable indicator of current and future results. Yield is not guaranteed. Positive yield does not imply positive return. Provided for information only to illustrate macro trends, not to be construed as research or investment advice. Investments involve risks. Not all investments are suitable for all investors. Data reflect most recently available as of 30.09.2021.

INCOME FROM YIELDS

Additionally, fixed income assets with high-yielding potential like high-yield bonds continue to be a relatively attractive source of income, as illustrated in the chart below. For example, Europe high-yield bonds can present potential diversification benefits and they also have shorter duration.

In fixed income investing, duration is a gauge of interest rate risk, showing how bond prices will likely change when interest rates move. As the movement of interest rates can have a significant impact on an income portfolio, managing duration is crucial for both alpha generation and risk management⁴. 

Global fixed income yields and duration

Source: Barclays, Bloomberg Finance L.P., FactSet, ICE BofA Merrill Lynch, J.P. Morgan Economic Research, J.P. Morgan Asset Management. Based on Bloomberg Barclays US Aggregate Credit – Corporate Investment Grade Index (US IG), Bloomberg Barclays Euro Aggregate Credit – Corporate (Europe IG), J.P. Morgan Asia Credit Investment Grade Index (Asia IG), Bloomberg Barclays Global Aggregate – Corporate (Global IG), Bloomberg Barclays US Aggregate Credit – Corporate High Yield Index (US HY), Bloomberg Barclays US Aggregate Securitized – Asset Backed Securities (US ABS), Bloomberg Barclays Pan European High Yield (Europe HY), J.P. Morgan Asia Credit High Yield Index (Asia HY), ICE BofA Global High Yield (Global HY), J.P. Morgan GBI-EM (Local EMD), J.P. Morgan EMBI Global (USD EMD), J.P. Morgan Asia Credit Index (JACI) (USD Asia Credit), J.P. Morgan Asia Credit China Index (USD China Offshore Credit). Duration is a measure of the sensitivity of the price (the value of the principal) of a fixed income investment to a change in interest rates and is expressed as number of years. Yields are not guaranteed, positive yield does not imply positive return. Past performance is not a reliable indicator of current and future results. Data reflect most recently available as of 30.09.2021.

INCOME FROM HYBRID ASSETS

Other hybrid assets such as preferred equities are also generally higher in the capital structure compared with common stocks. Such assets are also generally supported by the strong fundamentals in financials and robust capitalisation of banks⁵, which comprise the majority of preferred equities.

Drawing on 50+ years of experience in multi-asset investing as a team, we dynamically allocate across geographies, asset classes, market capitalisation and capital structures, striving to provide investors with a consistent and attractive income stream and the opportunity for capital growth in a truly diversified portfolio.

 A dynamic multi-asset approach allows investors to seek the high-conviction income opportunities in the prevailing market conditions. The portfolio⁶ has maintained a risk-on tilt since the COVID-19 drawdown in March 2020, favouring equity exposures that are geared to continued recovery, as well as adding covered call positions which provided attractive income and upside participation opportunities. Within fixed income, we have preferred low-duration, high-carry credit such as high yield where we continue to see strong fundamentals.

By shifting tactically across asset classes and regions, JPMorgan Multi Income Fund is able to exploit market dislocations, seeking to deliver a sustainable yield^6* in this fast-changing market environment, as illustrated in the chart below. (*The Fund’s mth – USD share class aims at monthly distribution. Dividend rate is not guaranteed. Distributions maybe paid from capital ^{Refer to important information 3}.) 

A flexible and dynamic approach⁶

6. Source: J.P. Morgan Asset Management. Allocation data as at 31.03.2020 and 30.11.2021. The Fund is an actively managed portfolio, holdings, sector weights, allocations and leverage, as applicable are subject to change at the discretion of the Investment Manager without notice. Cash exposure represents both physical cash and derivative cash offset.