The JPM Diversified Real Return Fund is based on a strategy launched by the firm’s global multi-asset group (GMAG) in the US in 2011.
Blending inflation-linked bonds with real assets and inflation-sensitive equities, it aims to create a portfolio that will provide a positive return in all market conditions.
Last week, Jupiter launched an onshore Strategic Reserve Fund for Miles Geldard and Lee Manzi, the multi-asset duo who joined from RWC Partners nearly two years ago. This multi-asset, absolute return offering is targeting cash plus 3%.
JPM AM said that although the official benchmark of its new fund is the 1 to 10 Year Barclays Capital Index-Linked Gilts Index, it will aim to achieve an annual return (before fees) of UK RPI plus 3%.
The firm added that the GMAG team will aim to do this with only 40% to 60% of the volatility of equities through strategic and tactical asset allocation.
Asset allocation
It envisages a split of around 65% lower-volatility assets (index-linked gilts, corporate bonds with inflation overlays and cash alternatives) and 35% higher-volatility assets (real estate investment trusts, commodities, natural resources equities and infrastructure equities).
The Ucits-compliant Oeic is registered for sale in both the UK and Jersey and at launch will offer an A share class with a minimum investment of £1,000.
Institutional share classes will then be launched over the coming months.
John Stainsby, head of UK institutional at JPM AM, said: "The popularity of index-linked government bonds in the past few years of above-target inflation has driven yields down to extremely low levels.
"The JPM Diversified Real Return Fund has been designed for investors who want to diversify their exposure beyond index-linked bonds to other inflation-sensitive assets. Its ability to invest across many inflation-sensitive asset classes makes it appropriate for those who want to achieve real returns and recognise the problems that an inflationary environment can pose to long-term investors."
