A new global bond fund has hit the shelves after JP Morgan Asset Management (JPMAM) opened its first product structured for NZ investors.
Built as a portfolio investment entity (PIE), the FundRock NZ-fronted JPMAM Global Bond Fund feeds into a 1988-vintage Luxembourg-domiciled vehicle managing some US$17.4 billion as at the end of last year.
The move follows an investment partnership agreement inked with Craigs Investment Partners last year designed to bring global research and products into the second-largest (by adviser numbers) wealth management network.
Subsequently, Craigs also arranged to sell half of its business to US private equity firm, TA Associates, in a deal yet to be completed.
But the JPMAM is targeting the wider NZ institutional and advisory markets with its new PIE.
The underlying JPMAM strategy invests into a “diversified portfolio of fixed income securities and sectors, including Government bonds, Agencies, Corporate bonds, asset and mortgage-backed securities”, according to fund documents.
“Selectively, tactical allocations to high yield debt may be taken. Derivatives will be used to achieve fund objectives and allocations may vary significantly over time.”
Myles Bradshaw, JPMAM global aggregate strategies head, leads a team of seven portfolio managers running the fund that combines “top down and bottom-up analysis, without bias”, a statement says.
Andrew Creber, JPMAM Australasia chief, said in the release that the new PIE was a “natural next step in our growth story in the region” after working with NZ institutions and advisory groups “for some time”.
“We are committed to growing our presence and excited about future opportunities to bring more best-in-class, low-cost, global active solutions to New Zealand,” Creber said.
The first JPMAM PIE on the racks carries an annual fee of 0.45 per cent (excluding GST) with a service provider menu comprising Public Trust as supervisor, Apex for administration and BNP Paribas Fund Services supplying custody.
Global investor appetite for fixed income has turned up in recent years following a period of rising interest rates. For example, a survey published this month by managed fund networking business, Calastone, found bond fund net flows it monitors outpaced “all other asset classes combined” since 2019.
Melville Jessup Weaver lists 13 ‘core’ global bond funds on offer to NZ investors in its quarterly survey including three PIMCO-managed strategies.