JPMorgan Launches Standard Euro MF
Funds Europe writes "JPMAM unveils euro money market fund that turns up risk gradually," which tells us, "JP Morgan Asset Management (JPMAM) has launched its first [sic] euro money market fund designed for risk-averse European investors. The firm says the fund will invest conservatively in corporate bonds and focus on capital preservation – but it will steadily move up the risk spectrum from top-rated bonds to those with a slightly lower risk in order to gain yield. Negative interest rates mean many cash investors are looking for ways to gain additional yield without too much additional risk, JPMAM said." The brief explains, "Called JPMorgan Liquidity Funds – EUR Standard Money Market VNAV, the fund will take incremental risk by stepping out from securities suitable for a AAA short-term money market fund, and moving into BBB-rated credit, extending the duration up to six months. This is intended to reduce the level of negative returns cash investors are generating on their euro assets while still maintaining a high degree of liquidity, said Jim Fuell, international head of global liquidity sales." Fuell adds "At present, sitting on the side-lines in cash can mean you're deeply in negative territory." Fitch Ratings writes "Fitch Rates JPMorgan Liquidity Funds - EUR Standard Money Market VNAV Fund 'AAf'/'S1'," saying, "Fitch Ratings has assigned JPMorgan Liquidity Funds - EUR Standard Money Market VNAV Fund a Fund Credit Quality Rating of 'AAf' and a Fund Market Risk Sensitivity Rating of 'S1'. As the fund has just been launched, it may take time for the fund to reach its target portfolio construction. Fitch had based its analysis on the fund's governing documentation, investment guidelines and model portfolio, combined with stress-testing scenarios to reach its final rating. Fitch's standard stress tests, and additional scenarios based on the fund's investment guidelines, show that the ratings are robust at the current rating." Fitch adds, "The fund is a sub fund of the umbrella fund (JPMorgan Liquidity Funds) which is a Société d'Investissement à Capital Variable (SICAV) that falls under the UCITS regulation framework. The fund is authorised and supervised by Commission de Surveillance du Secteur Financier (CSSF) as a standard money market fund under European money market fund regulation. Fitch considers the legal and regulatory framework of the fund satisfactory. As of 9 July 2020, the fund's total assets under management were approximately EUR170 million at launch."
