The product makers at J.P Morgan Asset Management [profile] and Capital Group [profile] are prepping their latest funds that freely ride a larger trend: "Go anywhere". Jessica Toonkel of Reuters takes a closer look at the trend.

Investors purchased a net $25.8 billion of "go anywhere" fund shares this year (up from $20.6 billion last year), and mutual fund sponsors have responded to the demand. So far they have opened 29 broad-based unconstrained funds in 2011, more than doubling 2010's count of 13, according to Lipper data.

First, the New York-based mutual fund arm of the bank will take the wrappings off its J.P. Morgan Total Emerging Markets Fund, a "go anywhere fund", early next year. The launch follows similar products from AllianceBernstein and Pimco. Capital Guardian Trust Company (an institutional asset management sibling to Capital Research and Management, which runs the American Funds) also plans a similar product, the Capital Emerging Markets Total Opportunities Fund, a Capital Group spokesman confirmed.

Toonkel explains that go anywhere funds do not require a fixed allocation of debt and equity. That freedom, though, makes these funds' performance difficult to gauge and hinders advisors with target allocations of their own from knowing how much to allocate to them.

Lipper research director Jeff Tjornehoj quips that "emerging markets investors want to know if they are investing in equity or fixed income."

Among the PMs highlighted in the article is Morgan Harting of AllianceBernstein's [profile] Emerging Markets Multi-Asset Fund. He tells Toonkel that emerging markets "appear to be a safer place for investors to go."

Meanwhile, J.P. Morgan Asset Management chief executive George Gatch tells Toonkel that go anywhere funds "have been successful because people want to know that there is a captain navigating the ship in very rough seas."

Still, Gatch worries that an "unfortunate outcome" might result if these kind of strategies fall into the wrong hands.  

Correction: A prior version of this story misidentified the fund planned by Capital Group. That fund, for institutional and private clients, will be offered by Capital Guardian Trust Company.

Edited by: HFD


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