JP Morgan (JPM) will become the latest group to add an absolute return fund to its retail range, and like Cazenove before it, the portfolio already has a track record of several years.
The group wants to make its €3billion (£2.35 billion) US equity Highbridge Statistical Market Neutral fund more accessible to retail investors and is in talks with fund supermarkets such as Cofunds to place the portfolio.
Although JPM already has a retail total return fund in its Cautious Return portfolio, Highbridge is more in line with retail hedge fund options such as BlackRock’s UK Absolute and Cazenove’s recent Absolute Return launch.
Highbridge was launched in November 2006 and is run from America. It aims for returns above cash in all market environments and targets the London inter bank offered rate (Libor) plus 4% return. The Sicav portfolio invests in American larger companies and looks to go long on undervalued stocks with strong fundamentals and short those overvalued.
The aim of the fund, which is statistically run, is to neutralise market volatility on returns.
The portfolio, which is quasi-actively managed, has hundreds of stock positions, both long and short. It features a high turnover but aims for a low beta.
The fund has daily dealing and has been available for some time to professional investors.
This summer JPM added a hedged sterling share class to the fund to make it more accessible to retail investors. It is now planning to widen its distribution via platforms.
The fund features a 1.5% annual charge but also carries a 20% performance fee.