JP Morgan Asia money market fund passes $10bn milestone

J.P. Morgan Asset Management, the largest institutional money market fund provider in the world, has announced that its local currency institutional money market funds in Asia now total more than $10bn equivalent in assets, reflecting strong growth in corporate cash levels.

Its suite of seven mutual funds in Asia has more than doubled in size since July 2010. Most of the growth is due to the onshore Chinese Yuan money market fund, which enjoyed a growth rate of more than 33% year to date, outpacing the 22% increase across the entire money fund industry in China.

The fund has added more than CNY 8bn ($1.25bn) in assets during the year, closing at CNY 20.9bn ($3.3bn) on October 31, 2012. The fund accounts for 90% of assets in AAA-rated money market funds 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.”

Another key market for J.P. Morgan AM is Japan. Robert Deutsch, head of Global Liquidity at J.P. Morgan Asset Management, said: “In October, we launched JPY government liquidity fund in Japan, which is the first institutional money fund restricted to government risk and the first to offer T+0 settlement in Japan.”

J.P. Morgan AM has more than $481bn in short-term fixed income assets under management. The Asia money market funds industry is estimated to be $373bn, while the global money market fund industry is $3.2trn (at end of October 2012). 

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