JP Morgan Asset Management is to launch a new London-listed investment trust, offering investors access to a portfolio of senior secured loans with a focus predominantly on the US market.
The firm is seeking to raise £100 million for the trust, which will target an initial dividend yield of 5%.
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Simon Crinage, head of investment trusts at J.P. Morgan Asset Management, said: "Bank loans are justifiably drawing attention because they offer a high regular income from a floating rate portfolio of senior securities, protecting investors from credit risk and the threat of rising rates."
According to JP Morgan, senior loans are floating-rate instruments and provide a level of protection should interest rates begin to rise, in contrast to fixed-coupon bonds.
Loan portfolios cannot be held in open-ended fund structures such as OEICs and SICAVs, making the investment trust structure ideal.
The asset management firm said it sees opportunities in the loan market to attain relatively high rates of current income, while offering some protection in a rising interest rate environment as well as potential capital appreciation.
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By GlobalDataIn April, the group launched the JPMorgan Global Convertibles Income Trust, managed by Anthony Vallee.
