J.P. Morgan Asset Management is one of the largest asset management firms in the world, with more than $1.29 trillion in global assets under management. J.P. Morgan Global Liquidity, the short-term investment division within J.P. Morgan Asset Management, is the largest manager of institutional money market funds in the world, with more than $403 billion in AUM and a global institutional market share of 16.4%. The J.P. Morgan Global Liquidity team provides knowledge, global resources and innovative solutions in a differentiated operating model with dedicated cash investment professionals in each region of the world serving multinational corporations and financial institutions.
Jim Fuell, Head of Global Liquidity, EMEA J.P. Morgan Asset Management
Jim Fuell says “Our size reflects our experiences: we have been involved in the money market fund business for 30 years, through numerous market cycles, and seek to offer our clients the benefit of this expertise. Our scale allows us to accommodate large client balances without sacrificing daily liquidity and without a single client becoming a significant shareholder of the fund. This is particularly important in ensuring a diversification of underlying securities and a well diversified client base.
It is true that size is not an automatic guarantee of quality, but in practice it gives us a real depth of resources, in client service, credit research and operational interface. It also enables us to access highly competitive pricing and expedited trading across markets. We aim to be the market leader not only by AUM, but also in terms of quality, innovation and service”.
Global reach, global innovation
We have an array of AAA-rated stable net asset value (NAV) liquidity funds spanning from pure US Treasury and Government Strategies through to our flag ship credit funds. Currencies currently managed in this space are:
USD
EUR
GBP
RMB
JPY
SGD
AUD
The JPMorgan Australian Dollar Liquidity Fund is a recent addition to our Luxembourg liquidity fund umbrella and is offered to clients that hold AUD.
Stepping outside the world of AAA-rated stable NAV funds, we have seen increased interest from investors seeking additional yield through the Managed Reserves Fund, domiciled in Luxembourg for international investors, and the Managed Income Fund in the United States. These are both floating NAV funds which look to provide additional yield by extending duration outside the money market fund space into the six- to nine-month portion of the curve.
In anticipation of a rising-rate environment, the Current Yield Money Market Fund, with a maximum weighted average maturity (WAM) of ten days, was launched in the United States at the end of 2010. This innovative product offers quicker yield adjustment than traditional money market funds within a rising-rate environment.
This series of new products reflects changes in customer requirements which J.P. Morgan Asset Management is well-placed to satisfy. “A key trend within our client base will be the increasing globalisation of companies, and their move into additional regional markets. This will create demand for funds denominated in new currencies, and also for those managers who are able to provide a truly global service to their clients,” comments Fuell.
Indeed, over recent years the J.P. Morgan Asset Management Global Cash Management survey, conducted in conjunction with the Association of Corporate Treasurers (ACT), has reflected a gradual move towards a global cash management structure, as the events of the financial crisis have emphasised the importance for treasurers of having immediate access to information including cash balances, counterparty exposures and foreign exchange across their entire firm.
This trend continued in 2010, with 74% of treasury departments structuring their cash management either globally or with global oversight, compared with 66% in 2009. In the future, this is expected to rise to 80%, with 46% of treasury departments moving to a pure global structure.
“One way we have been able to help treasurers with maintaining a global oversight is to offer liquidity funds that, despite being located in different markets and currencies, are managed to a consistent process, in line with the primary objective of capital preservation,” says Fuell. “And in all regions, we are differentiated by our size, our client focus and service and our rigorous investment approach.”
Client servicing and technology
Recognised for its high service standards, J.P. Morgan Global Liquidity aggregates its platforms into an exceptional client experience by offering three regionally located client service desks. Staffed with multilingual teams, the client service desks continuously manage business needs globally and locally from across the globe:
Delaware
Luxembourg
Japan
Shanghai
Hong Kong
ensuring around the clock global operation. Systems and information are shared globally, so clients in any region can call the service desks and receive up-to-date information on positions and holdings, make inquiries and place trades.
Global trading is further simplified for clients with a range of convenient transaction options, including late-day fund cut-off times, unlimited fund transactions and multiple redemption payment times throughout the day, allowing access to working capital at any time. J.P. Morgan Asset Management’s direct debit functionality makes funding purchases easier by linking investment and demand deposit accounts (available internally in multiple countries and where possible externally), and by eliminating the need for wire transfers.
Additionally, we maintain a dedicated on-boarding team and streamlined account opening process that allows expedited startup while complying with all regulatory requirements. Fuell comments, “An advantage is that our operational efficiencies allow clients to open an account with us in an hour or so and, subject to fund cut-off times, subscribe same day. Similarly clients do not have to wait for an end of day batch where redemptions are concerned as we process them intra-day, providing liquidity to clients where required.” We are dedicated to providing innovative solutions for specific client needs from transmission trade processing to coverage from Japan to Shanghai, Luxembourg and the United States.
As a technology leader, J.P. Morgan Asset Management continues to invest heavily in systems, software and development to help clients around the world increase efficiency, profitability and competitive edge. Our clients can manage their liquidity needs online through the Global Cash Portal, executing trades, accessing their account information, checking fund and market performance, and viewing commentaries from global experts.
Our Global Liquidity website is another excellent resource that simplifies and accelerates the global liquidity management process by keeping clients fully informed about opportunities that provide clients with access to valuable information. In 2010, the website and the Global Cash Portal became seamlessly integrated, making it highly efficient to place trades and steer between the latest research and fund information.
Fuell explains, “Around two thirds of our clients now trade through our Global Cash Portal, which allows clients to execute trades, access their account information, check fund and market performance, and download contract notes, trade confirmations and account data.”
Liquidity Insights: redefining thought leadership
At the core of J.P. Morgan Global Liquidity is its focus on thought leadership. The Liquidity Insights programme shares the firm’s intellectual capital, including investment insights and resources, with clients worldwide. Through white papers, economic and market bulletins, surveys, conference calls, web discussions, investment forums and other face-to-face meeting opportunities, J.P. Morgan Global Liquidity provides the value-added information that defines leadership. “To keep this programme relevant and meaningful we encourage dialogue with all corporate treasurers whether existing clients or not” comments Fuell. In 2010, Liquidity insights topics of interest included:
Best practices for managing your cash investments.
Weighing the risks and rewards for cash investments: a disciplined approach for evaluating investment solutions.
A practical guide to evaluating counterparty and sovereign risk.
A practical guide to evaluating interest rate risk and liquidity risk.
A global perspective on investing cash in local markets.
Working to stabilise the industry
During the most difficult time period for money markets, J.P. Morgan’s management team was highly engaged in the industry’s efforts to bring greater stability to the financial markets, including its participation in the Investment Company Institute’s Money Market Fund working group within the United States. As part of this group, J.P. Morgan was instrumental in developing proposed guidelines for money market funds aimed at strengthening the industry and further enhancing the safety and stability of all money market funds. In Europe and Asia, J.P. Morgan continued to express its commitment to the industry by sharing best practices and working closely with the Institutional Money Market Funds Association.
Conclusion
When investors are looking for safety, liquidity and diversification, they clearly want a manager they can trust, as well as one with a proven track record. Size and experience allow J.P. Morgan Global Liquidity to quickly respond to clients’ immediate liquidity requirements, and to offer exceptional solutions that meet diverse needs. In addtion to liquidity funds, J.P. Morgan Asset Management offers a wide range of products for a wide breadth of investment needs.
J.P. Morgan has the knowledge, the resources and the technology needed to offer superior customer service and innovative products, as well as the global reach necessary to provide comprehensive liquidity solutions. Perhaps most importantly, J.P. Morgan has the vision and willingness to lead the industry into the future.
Global Liquidity US Platform
The money market fund industry in the US is the biggest in the world and has the longest history. J.P. Morgan’s 2010 survey showed that 65% of treasurers for organisations with North American headquarters currently use prime money market funds, compared with a global average of 59%. 41% of treasurers in North America said money market funds were their most-used cash management tool, compared with 35% overall. Only 26% of North American treasurers chose bank deposits as their most-used tool, versus 41% overall.
In the United States, J.P. Morgan offers 13 USD-denominated taxable, tax-aware and tax-free, rated and non-rated money market funds registered under the Investment Company Act of 1940, with assets totalling $246 billion. This includes the JPMorgan Prime Money Market Fund, the industry’s largest money market fund with assets of more than $130 billion. To ensure a best-in-class client experience, in the United States, J.P. Morgan Global Liquidity has 30 dedicated sales and relationship management professionals located across the region. An additional 41 investment management professionals, such as portfolio managers and credit research staff, are located in both Columbus, Ohio, and New York. Further, the J.P. Morgan Global Liquidity staffs three client service teams on three different continents to ensure complete coverage and continuity. The US-based team currently encompasses 30 people headquartered in Delaware that service clients globally.
Global Liquidity European Platform
In Europe, J.P. Morgan is the largest provider of AAA-rated stable NAV money market funds with assets of $156 billion and a 22.7% market share. This includes the largest USD fund – the JPMorgan USD Liquidity Fund – with assets of $89 billion; and the largest EUR fund – the JPMorgan Euro Liquidity Fund – with assets of €19 billion. The JPMorgan Sterling Liquidity Fund had £7.3 billion in AUM in January 2011. All institutional money market funds on the European platform are domiciled in Luxembourg.
A dedicated sales team, located across Europe, is staffed with 14 people and based in London, Frankfurt, Paris, Brussels, Luxembourg, Vienna and Madrid. An experienced team of Portfolio Managers who are based in London, manage the sterling and euro Liquidity funds. The European-based client service team includes a multilingual staff of 25 and is located in Luxembourg.
Global Liquidity Asian Platform
Money market funds are new to Asian investors compared with those in the US and Europe and J.P. Morgan has been leading the development of AAA-rated funds in the marketplace since 2005 when JPMorgan launched the first AAA-rated money market fund in China through its joint venture China International Fund Management Company. JPMorgan also offers the only AAA-rated money market fund onshore in Japan in JPY and also in Singapore dollar. Most recently, an Australian dollar fund was added to the platform.
“We are committed to leading the development of products tailored to the Asian market, where both our global and domestic clients are seeking better investment alternatives that offer the right combination of security, liquidity and yield,” says Travis Spence, Head of Global Liquidity Asia for J.P. Morgan Asset Management.
“Although investment returns have always been a key driver for decisions in Asia, counterparty risk continues to be a primary concern for Asian treasurers and their experience during the financial crisis has taught many lessons, especially the need for enhanced due diligence and understanding of investment products on offer. The diversification we offer in our liquidity funds has been well received in the market, and we have seen our Asian funds grow to over $7 billion equivalent AUM, with most of the growth during the last three years.”
Source: iMoneyNet as at 31/01/2011
Tailored solutions in a range of currencies to address your cash needs worldwide
*In relation to the CIFM RMB Money Market Fun managed by China International Fund Management Co., Ltd. (CIFM), which is a joint venture between Shanghai International Trust Ltd and JPMorgan Asset Management (UK) Ltd., for qualified China domiciled investors only.
J.P. Morgan Asset Management
J.P. Morgan Asset Management, the investment management arm of JPMorgan Chase, offers a range of comprehensive global short-term and medium-term investment solutions, from AAA-rated liquidity funds to short-term fixed income products. A combination of these products can assist you to achieve the liquidity, security, risk and return profile that you desire.
By entrusting your liquidity investments with J.P. Morgan Asset Management you can be sure that you are investing with a market leader. We are one of the world’s largest providers of AAA-rated international liquidity funds, managing over US $156 billion on behalf of more than 2,000 institutional liquidity clients.1 This scale gives us strong purchasing power and creates exceptional levels of liquidity and diversification within our liquidity funds.
Our liquidity funds are available denominated in USD, GBP, EUR, SGD, JPY, RMB and AUD.2 J.P. Morgan Asset Management is a market leader in government only liquidity funds with the largest Euro Government and US Dollar Treasury Liquidity Funds.1 We also offer additional diversification through two of our AAA-rated funds, the Sterling Gilt Liquidity Fund which invests purely in UK Government Securities and our US Dollar Government Liquidity Fund which invests purely in securities issued by the US Government and its agencies. For investors with a slightly longer-term investment horizon, we also offer short-term fixed income solutions such as our Managed Reserves Fund which is suitable for investors looking for potentially higher returns than a AAA-rated liquidity fund, but who are prepared to incur a higher level of risk in order to achieve this.
For non US investors. Source: iMoneyNet as at 31/01/2011
JPY for qualified Japan domiciled investors only and RMB for qualified China domiciled investors only. The RMB fund is managed by China International Fund Management Co. Ltd (CIFM), a joint venture with JPMorgan Asset Management (UK) Ltd. in China.
Please note that this document is for institutional investors’ use only. It is not for public distribution and the information contained herein must not be distributed to, or used by the public.
J.P. Morgan Asset Management is the brand for the asset management business of JPMorgan Chase & Co. and its affiliates worldwide. This communication is issued by the following entities: in the United Kingdom by JPMorgan Asset Management (UK) Limited which is regulated by the Financial Services Authority; in other EU jurisdictions by JPMorgan Asset Management (Europe) S.à.r.l., Issued in Switzerland by J.P. Morgan (Suisse) SA, which is regulated by the Swiss Financial Market Supervisory Authority FINMA; in Hong Kong by JF Asset Management Limited, or JPMorgan Funds (Asia) Limited, or JPMorgan Asset Management Real Assets (Asia) Limited, all of which are regulated by the Securities and Futures Commission; in Singapore by JPMorgan Asset Management (Singapore) Limited which is regulated by the Monetary Authority of Singapore; in Japan by JPMorgan Securities Japan Limited which is regulated by the Financial Services Agency, in Australia by JPMorgan Asset Management (Australia) Limited which is regulated by the Australian Securities and Investments Commission and in the United States by J.P. Morgan Investment Management Inc. which is regulated by the Securities and Exchange Commission. Accordingly this document should not be circulated or presented to persons other than to professional, institutional or wholesale investors as defined in the relevant local regulations. The value of investments and the income from them may fall as well as rise and investors may not get back the full amount invested.
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