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JPMAM launches EM currency absolute return fund

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To capitalise on divergence and inefficiency in emerging markets, JP Morgan Asset Management has decided to launch an absolute return fund, the giant US banking outfit announced this week.

To capitalise on divergence and inefficiency in emerging markets, JP Morgan Asset Management has decided to launch an absolute return fund, the giant US banking outfit announced this week. Entitled the JPM Emerging Markets Currency Alpha Fund, it will target returns of EUR cash plus 8 per cent and look to maximise diversification inherent in the emerging market space and their respective currencies. The fund is to be managed by Amit Tanna and Harry Bazzaz and aims to take advantage of market inefficiencies as a result, for example, of differing economic cycles, valuations and policy stances. Co-manager Tanna said that domestic demand would likely be an increasing contributor to growth, helping to attract flows and enhance productivity, with such trends likely to support EM currencies “from a long-term structural perspective”. Tanna goes on to emphasize that generating relative value alpha will be a key focus of the fund: “With the majority of currency flows in emerging markets being non-profit motivated, inefficiencies arise and can provide real ‘alpha’ potential,” said Tanna. Tanna and Bazzaz will be supported globally by a team of 14 strategists and analysts with an on-the-ground presence in many key emerging markets including Brazil, China and India.

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