Investing in a world of ultra-low rates
Lower returns from bonds could pose a challenge to long-term investors.
Escalating trade tensions and other geopolitical concerns have cast a cloud over the global economic outlook, and may further weigh on financial markets. Still, investors may risk missing out on investment opportunities should they choose to stay on the sidelines in uncertain markets.
Different assets perform differently under various market conditions. As market volatility persists, it is crucial that investors adopt a diversified approach, depending on their risk appetite, with exposure to different asset classes to help achieve a balanced risk and return profile.
Central banks look set to embark on further monetary easing to help cushion downside risks. In July 2019, the US Federal Reserve cut rates for the first time in a decade. The European Central Bank and other central banks in Asia are also leaning towards policy easing. It has become increasingly challenging for investors to find the income they need from traditional sources.
Although yields^ are on a decline, investors can still tap diverse investment opportunities by moving across regions, asset classes and the full capital structure for additional income sources.
^Yield is not guaranteed. Positive yield does not imply positive return.
The ability to dynamically respond to changing market conditions is key to delivering capital growth. Our fund managers have the flexibility to dynamically allocate their highest conviction ideas across geographies, asset classes and capital structure into a single portfolio.
The Fund has delivered stronger returns relative to the peer average, while exhibiting lower volatility compared with its peer group over 1-year, 2-year, 3-year and 5-year horizons.
Source: J.P. Morgan Asset Management, Morningstar, Inc, USD Moderate Allocation Category of HK SFC authorised funds (as of end-February 2020, NAV to NAV in USD with income reinvested). The authorisation from SFC does not imply official recommendation. Fund refers to the USD (mth) Class. Calendar year return: 2015 -1.6%; 2016 +7.4%; 2017 +10.6%; 2018 -5.0%; 2019 +14.8%; 2020 YTD -3.1%. Past performance is not indicative of future performance.
With an aim to maximise income return through a diversified portfolio, the Fund is designed to capture income potential from a broad range of asset classes. Its monthly distribution share classes* provide investors with attractive income opportunities.
(*Aim at monthly distribution. Dividend rate is not guaranteed. Distributions may be paid from capital. Refer to important information 3)
Leon Goldfeld, who co-manages the JPMorgan Multi Income Fund, was named Fund Manager of the Year – Mixed Asset+ at The Asset Triple A Asset Servicing, Institutional Investor and Insurance Awards 2019 for his outstanding management of various funds.
+ Issued by The Asset, 2019 award, reflecting performance of previous calendar year. There can be no assurance that the professionals currently employed by J.P. Morgan Asset Management (JPMAM) will continue to be employed by JPMAM or that the past performance or success of any such professional serves as an indicator of such professional's future performance or success.
# Source: Bloomberg Finance L.P., Dow Jones, FactSet, J.P. Morgan Economic Research, MSCI, J.P. Morgan Asset Management. APxJ: Asia Pacific ex-Japan. DM: developed market. EM: emerging market. EMD: emerging market debt. HY: high yield. REITs: real estate investment trusts. The “Diversified” portfolio assumes the following weights: 20% in the MSCI World Index (DM equities), 20% in the MSCI AC Asia Pacific ex-Japan (APxJ equities), 5% in the average of the MSCI EM Latin America and MSCI EM EMEA Indices (EM ex-Asia equities), 10% in the J.P. Morgan EMBIG Index (EMD), 10% in the Bloomberg Barclays Aggregate (Global bonds), 10% in the Bloomberg Barclays Global Corporate High Yield Index (Global corporate HY bonds), 15% in J.P. Morgan Asia Credit Index (Asian bonds), 5% in MSCI US REITs Index (US REITs) and 5% in Bloomberg Barclays U.S. Treasury – Bills (1-3 months) (Cash). Diversified portfolio assumes annual rebalancing. All data represent total return in US dollar terms for the stated period. 10-year total return data is used to calculate annualised returns (Ann. Ret.) and 10-year price return data is used to calculate annualised volatility (Ann. Vol.) and reflects the period 30.06.2009 – 30.06.2019. Past performance is not indicative of future performance. Different asset classes have different risk profiles. Guide to the Markets – Asia. Data reflect most recently available as of 30.06.2019.
† Source: Bank of America, Bloomberg Finance L.P., FactSet, Federal Reserve, FTSE, MSCI, NCREIF, Standard & Poor’s, J.P. Morgan Asset Management. HD: high dividend. Asset classes are based on FTSE NAREIT Global/USA REITs (Global/US REITs), Bloomberg Barclays US Convertibles Composite (Convertibles), Bloomberg Barclays Global High Yield Index (Global HY bonds), J.P. Morgan Government Bond Index EM Global (GBI-EM) (Local EMD), J.P. Morgan Emerging Market Bond Index Global (EMBIG) (USD EMD), J.P. Morgan Asia Credit Index Non-investment Grade (Asia HY bonds), MSCI Emerging Markets (EM equities), MSCI Emerging Markets High Dividend Yield Index (EM HD equities), MSCI World High Dividend Yield Index (DM HD equities), MSCI Europe (European equities), MSCI USA (US equities). EM HD equities and DM HD equities as of 28.02.2019. Different asset classes have different risk profiles. For illustrative purposes only. Guide to the Markets – Asia. Data reflect most recently available as of 30.06.2019.