JP Morgan Asset Management (JPMAM) has launched its first 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.
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 added: “At present, sitting on the side-lines in cash can mean you’re deeply in negative territory.”
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