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JPMorgan Fund Sparks Biggest High-Grade Bond Outflow Since June

JPMorgan Chase Headquarters
People stand in the lobby of JPMorgan Chase & Co. headquarters in New York. Photographer: Scott Eells/Bloomberg

Nov. 1 (Bloomberg) -- JPMorgan Chase & Co.’s Core Bond Fund reported a $2.3 billion withdrawal this week that spurred the biggest weekly outflow from U.S. investment-grade debt funds since June.

The fund’s net assets dropped 9.2 percent to $22.38 billion on Oct. 28, according to data compiled by Bloomberg. Investment-grade funds reported a $2.67 billion outflow during the past week, with most of it coming from one fund, Bank of America Corp. credit strategists Hans Mikkelsen and Yuriy Shchuchinov said in an Oct. 31 report, citing data from EPFR Global.

The withdrawal reported “was likely a one-off event and no signal of a broader rotation out of high-grade bond funds,” the analysts wrote.

Investment-grade bonds in the U.S. gained 1.5 percent in October as speculation mounted that the Federal Reserve will maintain its $85 billion of monthly asset purchases through March. Companies have sold $991.4 billion of the debt so far this year, on pace for the most ever, from $945.4 billion during the same period last year, Bloomberg data show.

The JPMorgan Core Bond Fund was started on Dec. 31, 1983, and focuses on investment-grade notes with medium-term maturities, according to the data. It had 25 percent of its assets in corporate bonds and 55.8 percent in mortgage debt as of Aug. 31, Bloomberg data show.

Gregory Roth, a spokesman for J.P. Morgan Asset Management, declined to comment on the nature of the outflow.

To contact the reporter on this story: Lisa Abramowicz in New York at labramowicz@bloomberg.net

To contact the editor responsible for this story: Alan Goldstein at agoldstein5@bloomberg.net

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