A multi-income journey into the emerging high-yield potential
Income investors like us have stayed the course as we ride through the four seasons. Where do we see income opportunities?
As the world grapples with the fallout of a global public health crisis, the significant re-pricing of assets across markets has been unprecedented. With investors and policymakers treading uncharted territory, the economic backdrop that will characterise the next phase of a business cycle is being forged amid the current market volatility.
With the global economy sinking into recession, how will that impact investors in their search for income? Our Multi-Asset Solutions Team shares their views on why a multi-asset income strategy2 remains essential in this environment.
Q1:HOW HAVE YOU BEEN POSITIONING YOUR MULTI-ASSET INCOME STRATEGY IN RECENT MONTHS3?
Q2:HOW ARE YOU MANAGING THE EXPOSURE TO HIGH-YIELD (HY) CREDIT3,4?
Source: J.P. Morgan Asset Management, Bloomberg. ‘BB’ is Barclays US High Yield 2% Issuer Cap Ba (I20599US), ‘B’ is Barclays US High Yield 2% Issuer Cap B (I20600US), ‘CCC’ is Barclays US High Yield 2% Issuer Cap Caa (I20601US). Issuer weighted default rate on US HY allocation. Data as of end-March 2020. Past performance is not a reliable indicator of current and future results. Provided for information only, not to be construed as investment advice.
Q3:HOW ARE YOU MANAGING CURRENT VOLATILE MARKETS3?
Q4:WHAT ARE THE SIGNALS TO ADD BACK RISK?
Q5:WHY INVESTORS COULD CONSIDER A MULTI-ASSET INCOME STRATEGY3?
Explore our investment solutions
Click here for more fund information
Conclusion
As the pandemic stretches on, the search for quality income remains challenging with the unconventional stimulus measures undertaken by central banks and governments around the world. Against this backdrop, a diversified multi-asset income solution could continue to help broaden income potential.
This represents investment team’s views as of 15 April 2020 based on current market conditions, subject to change from time to time. Provided for information only, not to be construed as investment or research recommendation.
Diversification does not guarantee investment return and does not eliminate the risk of loss.
1. We seek to achieve the investment objective, there is no guarantee these will be met.
2. For illustrative purposes only based on current market conditions, subject to change from time to time. Not all investments are suitable for all investors. Exact allocation of portfolio depends on each individual’s circumstance and market conditions.
3. Holdings, exposures and allocations for actively managed portfolios are subject to change from time to time. These represents MAS investment team’s views under current market conditions, subject to change from time to time. Provided for information only, not to be construed as investment advice. Diversification does not guarantee investment return and does not eliminate the risk of loss.
4. High-yield credit refers to corporate bonds which are given ratings below investment grade and are deemed to have a higher risk of default. For illustrative purposes only, exact allocation of portfolio depends on each individual’s circumstances and market conditions. Yield is not guaranteed. Positive yield does not imply positive return.
5. Developed market equities are represented by the MSCI World Index and Asia pacific ex-Japan equities are represented by the MSCI AC Asia Pacific ex-Japan. Source: Bloomberg Finance L.P., Dow Jones, FactSet, J.P. Morgan Economic Research, MSCI, J.P. Morgan Asset Management. Data reflect most recently available as of 31.03.2020.
Investment involves risk. Not all investments are suitable for all investors. Past performance is not a reliable indicator of current and future results. Please refer to the offering document(s) for details, including the risk factors. Investors should consult professional advice before investing. Investments are not similar to or comparable with fixed deposits. The opinions and views expressed here are as of the date of this publication, which are subject to change and are not to be taken as or construed as investment advice. Estimates, assumptions and projections are provided for information only and may or may not come to pass. This document has not been reviewed by the SFC. Issued by JPMorgan Funds (Asia) Limited.