J.P. Morgan Asset Management Australia has slashed management fees on all bond funds by nearly a third.
From 1 June 2019, management fees for the following bond funds have been reduced:
- JPMorgan Global Strategic Bond Fund - from 0.60% to 0.40%;
- JPMorgan Global Bond Fund - from 0.50% to 0.40%; and
- JPMorgan Global Bond Opportunities Fund - from 0.75% to 0.50%.
J.P. Morgan Asset Management head of Australia funds David Hallifax said too many investors are anchored in cash, leaving them stuck with low returns, while the likelihood the Reserve Bank of Australia cutting interest rates this year may further exacerbate the challenge for income-hungry investors.
"We want to lower the barrier for investors to move out of cash and get invested in the bond market," he said.
Hallifax observes that Australians are reassessing the role bonds play in their portfolios, given the market conditions.
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It is important to have a compelling, cost-efficient investment proposition, which involves providing investors with flexible strategies that tap into the best sources of income and returns globally, while actively managing interest rate risk, he added.
Global market strategist Kerry Craig said there is currently more cash held in term deposits earning less interest than at any time since the Global Financial Crisis.
"This means that the income on many investors' savings is barely outpacing the increasing cost of living. These trends underscore the need for Australian investors to diversify into more flexible bond strategies," Craig said.
The asset manager's flagship Global Strategic Bond Fund is part of a global, unconstrained fixed-income strategy with $4.6 billion assets under management.
A version of the strategy for Australian investors was incepted on 20 December 2013 and currently has $219 million under management.