* Touts "first" low-cost, actively managed equity fund
* To charge 10 pct on extra FTSE All Shares returns
* Cuts management fees, scraps preliminary charge
LONDON, Jan 31 J.P. Morgan Asset Management is
rebranding and cutting the fees on one of its UK equity funds to
woo recession-hit investors seeking greater choice and value for
money in their lower risk investment strategies.
The funds arm of U.S. financial group JP Morgan Chase & Co
(JPM.N) said on Monday it was launching "possibly the UK's first
low cost, active managed, open ended investment solution to
challenge the passive market" -- where cost-conscious investors
have fled to escape rising fund fees.
Passively-managed products -- also known as trackers -- are
designed to generate returns that mirror indexes. Such funds are
cheap to run but offer limited potential for outperformance.
"We know that today's investors are increasingly concerned
about fund charges and a preferred route to seeking lower cost
funds has been through lower risk investments," said Jasper
Berens, head of UK Retail Sales.
"We believe that many investors buy these funds because they
are low cost rather than because of a specific preference for
passive management," he said.
The move comes as fund managers face tricky negotiations
with some clients who suffered substantial losses in the
aftermath of the credit crisis, despite having paid higher fees
for actively managed funds supposed to better withstand
difficult or volatile markets.
To meet increasing demand for lower-cost, actively managed
funds, JPMAM's 95 million pounds ($150.9 million) JPM UK Active
350 Fund will be renamed the JPM UK Active Index Plus Fund, and
will change its benchmark to the FTSE All Share Index from the
FTSE 350 "in line with other comparable products," JPMAM said.
The fund will carry an annual management charge of 0.25
percent and fixed expenses of 0.15 percent for all investors,
against a 1 percent and 0.6 percent fee for retail clients and
institutions respectively in the old fund.
The old fund also levied an initial charge of 3.5 percent on
retail customers, which JP Morgan has now scrapped.
In exchange for the reduction in the fees levied to cover
the costs of managing the fund, JPMAM has introduced a 10
percent performance fee on any return above the FTSE All-Share
index but Berens told Reuters the fund will not charge more than
55 basis points, including performance and management fees.
"The performance fee means investors only pay for the
benefits of active management when they are reaping its
rewards," Berens said.
The fund, in its new guise, will continue to be actively
managed by the same investment management team, led by Michael
Barakos, using the same investment process but with a lower risk
(Reporting by Cecilia Valente; Editing by Sinead Cruise and Jon