OPM seeds offerings from JPM and Axa via fund of funds range

OPM Fund Management has seeded funds from JPM and Axa through its Balanced Managed and Fixed Interest fund of funds.

Tony Yousefian, the chief investment officer, says OPM’s £18m Balanced fund put 2% of its assets into J.P. Morgan’s Brazil investment trust, launched in March. As a seed investor in the JPM fund, OPM received one free share for every share it bought

The group also has 3.3% of its £37m Fixed Interest fund in Axa’s US Short Duration High Yield fund, which launches this month.

Yousefian says: “Generally, new funds have the ability to start with a clean sheet of paper, and can construct their portfolios from scratch. They come with no baggage.

“We also felt the shares may well trade at a premium. We did not want to buy an investment trust which is effectively a cash fund, and have to pay a premium for it,” he says.

“Brazil is at a very different stage in the cycle to India and China, whose economic activity has been very buoyant, and whose authorities are doing what they can to cool things down. Brazil, by contrast, has a stable outlook for rates.”

J.P. Morgan Brazil complements OPM’s 2.7% in Lazard Emerging Markets, 3% in Hexam Global Emerging Markets and 2% in the Neptune Russia and Greater Russia fund.

Yousefian says OPM had about 15% in emerging markets through 2009, which was cut to about 5% in January. “We are gradually rebuilding exposure to emerging markets, but very much on a selective basis,” he says.

Of Axa’s US fixed income product, he adds: “US high yield should continue to do well while monetary policy remains very accommodative.”

Yousefian says Axa’s fund sits well alongside OPM’s 2.5% holding in Legg Mason Western Asset Management’s US High Yield Bond fund.