JPMorgan Asset Management Fund Outperforms as it Kept Shorter-Maturity Securities

JP Morgan's own $2.4 billion Global Bond Opportunities Fund has trimmed its average duration in U.S. securities to three years from more than five in July, and has leaped into the domestic debt of Russia and Brazil. Bond investors are facing some hurdles since the global-reflation trades that ignited following the November U.S. presidential election victory for a fiscal-stimulus proposal by Donald Trump.

The firm is upbeat on the local-currency bonds of Russia and Brazil as their economies are expected to rebound, according to Stealey. The domestic debt issued by Russia returned 2.2 percent while Brazil returned 4.7 percent in the previous month as of Jan. 12, as shown by indexes compiled by Bloomberg. Brazil's 10-year notes offer a yield of nearly 11 percent while Russia's is at almost eight percent, in comparison with nearly 2.4 percent for similar-maturity U.S. debt.

The fund's strategy includes the mix of both local currency and dollar-denominated emerging-market bonds which have been increased to 15 percent of the portfolio from 12 percent.

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