Thanks to Highbridge Capital Management, JPMorgan is giving mutual fund investors access to another alternative asset class: commodities. Today the New York-based asset manager unveiled the Highbridge Dynamic Commodities Strategy Fund.
Highbridge (a JPMorgan subsidiary) subadvises the fund, which has a net expense ratio of 165 basis points and a minimum initial investment of $1,000. Highbridge managing directors Sassan Alizadeh and Mark Nodelman and JPMorgan Investment Management vice president Christopher Tufts serve as the fund's portfolio managers. (Alizadeh is also a principal at Highview Global Capital Management, a commodity trading advisor.) Tufts handles the fixed income portion of the fund.
JPMorgan handles the fund's administration, distribution and shareholder servicing itself.
Company Press Release
NEW YORK, April 26 -- J.P. Morgan Funds, the mutual fund arm of J.P. Morgan Asset Management (NYSE:JPM) has launched a new commodities mutual fund, the Highbridge Dynamic Commodities Strategy Fund (HDSAX).
As part of a diversified portfolio, the Highbridge Dynamic Commodities Strategy Fund seeks to offer individual investors the opportunity to gain exposure to commodities, increase return potential, and reduce risk in today's growing global economy. Managed by a team with 28 years combined experience, the fund differs from other commodity funds in these ways:
-- Actively-managed strategy invests in securities linked directly to the
value of liquid commodities or commodity futures contracts --
presenting the potential to generate alpha and gain broad exposure to
various market sectors
-- Takes a long-biased approach with the ability to short commodity
sectors -- to potentially capture returns from both rising and falling
-- Emphasis on risk management seeks to manage the high level of
volatility inherent in the commodities market and a unique "Drawdown
Control" feature attempts to dynamically decrease portfolio exposures
during periods of market underperformance
"The Highbridge Dynamic Commodities Strategy Fund gives individual investors access to the investment capabilities of Highbridge Capital Management LLC in an important asset class, with the transparency and cost structure of a mutual fund vehicle," said George Gatch, President and CEO of J.P. Morgan Funds. "This innovative product provides another option for diversification as they adjust their current portfolio for new market realities."
"We are excited to offer investors a unique active approach to commodity markets, integrating both our long and short insights, " said Mark Nodelman, co-manager of the Highbridge Dynamic Commodities Strategy Fund. "We seek to construct a portfolio with a high correlation to commodities and aim to achieve superior risk-adjusted returns, combined with a rigorous risk management process, " noted Dr. Sassan Alizadeh, the Fund's Senior Portfolio Manager.
J.P. Morgan Funds had a very strong year in 2009, ranking 3rd in inflows for all U.S. mutual fund companies, and is the 4th largest mutual fund firm in the U.S., with $445 billion in assets under management (according to Morningstar, as of 12/31/2009). It offers over 100 mutual fund products across the full range of asset classes, as well as separately managed accounts and retirement products.
RISKS ASSOCIATED WITH INVESTING IN THE FUND:
The fund's investment in income securities is subject to interest rate risks. Bond prices generally fall when interest rates rise. The fund will have a significant portion of its assets concentrated in commodity-linked securities. Developments affecting commodities will have a disproportionate impact on the fund. The fund's investment in commodity-linked derivative instruments may subject the fund to greater volatility than investments in traditional securities, particularly if the instruments involve leverage. The value of commodity-linked derivative instruments may be affected by changes in overall market movements, commodity index volatility, changes in interest rates, or factors affecting a particular industry or commodity, such as drought, floods, weather, livestock disease, embargoes, tariffs and international economic, political and regulatory developments. Use of leveraged commodity-linked derivatives creates an opportunity for increased return but, at the same time, creates the possibility for greater loss (including the likelihood of greater volatility of the fund's net asset value), and there can be no assurance that the fund's use of leverage will be successful. Diversification does not guarantee investment returns and does not eliminate the risk of loss.
Contact JPMorgan Distribution Services at 1-800-338-4345 for a fund prospectus. You can also visit us at www.jpmorganfunds.com. Investors should carefully consider the investment objectives and risks as well as charges and expenses of the mutual fund before investing. The prospectus contains this and other information about the mutual fund. Read the prospectus carefully before investing.
J.P. Morgan Funds are distributed by JPMorgan Distribution Services, Inc., which is an affiliate of JPMorgan Chase & Co. Affiliates of JPMorgan Chase & Co. receive fees for providing various services to the funds. Products and services are offered by JPMorgan Distribution Services, Inc., member FINRA/SIPC.
J.P. Morgan Asset Management is the marketing name for the asset management businesses of JPMorgan Chase & Co. Those businesses include, but are not limited to, J.P. Morgan Investment Management Inc., Security Capital Research & Management Incorporated and J.P. Morgan Alternative Asset Management, Inc.