JP Morgan Asset Management Australia has reduced management fees on all bond funds, from 60 basis points to 40 basis points.
The change in fees was applied to its flagship JPMorgan Global Strategic Bond Fund, the firm said. The fund is a part of the company’s global unconstrained fixed income strategy with AUD$4.6 billion assets under management internationally.
Following this, JPMorgan Global Bond Fund management fees dropped by 10 basis points to 40 basis points while JPMorgan Global Bond Opportunities Fund saw management fees reduced by 25 basis points to 50, with all changes being effective from 1 June.
According to David Hallifax, the firm’s head of Australia funds, the move was driven by a conviction to help lower barriers for investors to move out of cash and get invested in the bond market.
“Accessing flexible, globally diversified fixed income investing options is important now for two reasons. First, it is likely to be a favourable environment for bonds globally – steady economic growth and benign inflation tend to support fixed income,” he said.
“Equally important, greater macro uncertainty with trade wars and the distorting impact of unprecedented monetary policy have made markets more volatile.”
JPM AM global market strategist, Kerry Craig, confirmed that at present there was more cash held in term deposits than at any time since the financial crisis and they were also earning less interest.
“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,” he said.