Harvesting global income opportunities
For many investors, income continues to be sought-after. The income portion of the DBS Barbell strategy advocates allocations to income-generating assets that can provide stability to portfolios, particularly so in this yield-starved environment that is expected to persist.
While market liquidity has returned after the double shocks of COVID-19 and oil price war in March and extreme levels of fear have dissipated, there remains some pockets of opportunities, particularly within non-traditional fixed income markets.
So, how can investors harvest non-traditional risk premiums to diversify their fixed income portfolios?
JPMorgan Income Fund ++++
What are the Key Characteristics of this fund?
- Fixed Income fund with a broad mandate. Seeks to provide predictable income of c.5% p.a.
- 3 core Fixed Income sleeves: Securitized Credit, Corporate Credit and Emerging Markets. Securitized features prominently and offers diversification to traditional bond portfolios.
- Controlled risk profile, with the fund targeting an annual volatility of below 4-6%. Historical volatility has been in the range of 2.5-3%.
Why this Fund? 3 Reasons:
- Diversified Risk Premiums: The fund seeks to derive non-traditional risk premiums through exposures to US securitized credit. This offers investors diversification from traditional bonds.
- Seasoned Managers: Veteran co-managers Drew Headley and Andrew Norelli both have extensive experience, with over 20 years of average experience.
- JPM’s Fixed Income capabilities: The fund leverages on JPM's fixed income resources (over 200 investment professionals). Several sub-teams are also involved in running the JPM Global Income Fund.
Article credit: Fund Selection Team
Photo credit: Unsplash
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*All investments come with risks and you can lose money on your investment. Invest only if you understand and can monitor your investment. Diversify your investments and avoid investing a large portion of your money in a single product issuer.