J.P. Morgan AM Asian money market funds exceed USD10 billion

J.P. Morgan Asset Management's local currency institutional money market funds in Asia now total more than US$10 billion equivalent in assets.


Its seven mutual funds in Asia have more than doubled in size since July 2010, it reported. The fastest growing local currency fund in 2012 has been the onshore renminbi money market fund, which has added more than 8 billion renminbi (US$1.25 billion) in assets during the year, closing at 20.9 billion renminbi (US$3.3 billion) on October 31 2012. The fund accounts for 90% of assets in AAA-rated money market funds in China, and with a growth rate above 33% year to date, it has outpaced the 22% increase across the entire money fund industry in China.


Travis Spence, head of global liquidity, Asia-Pacific said: "Corporate cash levels are growing faster in Asia than other regions and treasurers are also holding more local currencies. China is a good example, where we see some companies delaying dividends for future use, while benefiting from higher investment returns onshore. Treasurers in Asia are looking for alternatives to deposits that provide diversification with similar levels of liquidity and security, but the options have historically been limited. The size of a money market fund is an important consideration for institutional investors, so we are excited to have crossed this milestone in Asia. It is a solid foundation that we expect will continue to grow rapidly."


Money market funds are mutual funds that seek to offer investors principal security, daily liquidity and a market-based return by investing in the highest quality short-term fixed income securities with strict duration and concentration guidelines. Money market funds are a popular tool used by investors for parking of operating and reserve cash balances. The global money market fund industry is US$3.2 trillion as of end-October 2012.


J.P. Morgan AM was the first to pioneer AAA-rated money market funds both in China in renminbi in 2005 as well as in Singapore dollars in 2007. In 2007, it also launched what is now the only AAA-rated money market fund in Japan in Japanese yen and has managed an AAA-rated money market fund in Australian dollars since 2010. In October, its yen government liquidity fund was launched in Japan as both the first institutional money fund restricted to government risk and the first to offer T+0 settlement in Japan for subscriptions and redemptions.