JP Morgan Asset Management Launches JP Morgan India Corporate Debt Opportunities Fund

The underlying investment philosophy of JP Morgan India Corporate Debt Opportunities Fund is to generate regular income and opportunities for capital appreciation while maintaining liquidity through active management of a diversified portfolio comprising of corporate bonds and securities across the investment grade credit rating and maturity spectrum.

The NFO opened yesterday (8th September, 2014) and it closes on 17th September 2014. The NFO re-opens on 24th September, 2014. The scheme is an open-ended income scheme, with growth option, dividend option and bonus option. The initial application amount is Rs 5000 per application or any amount in multiples of Re 1 thereafter. The additional application amount is Rs 1000 or any amount in multiples of Re 1 thereafter. If redeemed under 18 months from the date of allotment (SIP or other), the exit load would be 1.50%. If redeemed after 18 months but within 36 months from the date of allotment (SIP or other), the exit load would be 0.50%. There will be no exit load if it is redeemed after 36 months from the date of allotment.

The Scheme is an actively managed debt fund wherein the AMC takes an active view of the interest rate movements, liquidity conditions and other macro-economic factors affecting interest rates. The scheme would seek to identify and invest in quality credits that offer an attractive risk-return reward relative to sovereign instruments with the objective to generate accrual income or in yield pickups which offer a better spread for similar credits. Potential capital appreciation opportunities arising out of mispricing of yields relative to fundamentals, potential credit upsides (both short term and long term ratings), sector rotations etc. will be explored.

Elaborating on the NFO, Nandkumar Surti, MD & CEO, JPMAM India said, “The biggest challenge always is that most investors tend to look at past returns before making an investment decision, rather than having a futuristic view. The biggest positive for debt markets unlike equity is that the Central Bank itself is focused on minimizing volatility as it directly impacts economic activity. Investors must understand that volatility is temporary in bond markets. Therefore, my suggestion to all investors is to take a slightly longer term view. Our Corporate Debt Opportunities Fund will benefit investors as it is poised to take advantage of the current economic reforms and improvement in credit rating in medium term.”

We feel that long term investors with a three year horizon will benefit from the fund.