J.P. Morgan Chase Launch Tax Efficient Fund

Caroline Maxwell, Tax-news.com, London

26 January 2001

As the dust settles on the spectacular market events of the past year, tax efficiency appears to be one of the major priorities for investors in 2001, and it was announced recently that J.P. Morgan Chase, sensitive to its clients' concerns about the size of the 'tax-bite' being taken out of their returns on distribution of dividends and capital gains has recently launched its fourth tax efficient fund.

Tax efficient funds aren't for everyone, and Russ Kinnel, a fund analyst with Morningstar points out that: 'It's hard to sell people on tax management when you have a roaring bull market' but the present distinctly ursine climate is ideal. Also, tax efficient balanced funds tend to outperform their average peer once the tax bite on the latter has been taken into account, and it seems that investors are getting wise to this, so the launch of this new fund may be timely.

The small cap fund, known as J.P Morgan Tax Aware Small Company Opportunities Fund, uses a bottom-up stock selection process, and according to a spokeswoman, is designed to minimise capital gains by harvesting losses.

The tax aware strategies utilised developed from the firm's work with wealthy clients, but in light of the growing new class of mass affluent investors, have been adapted to fit their investment and taxation needs. This new fund is aimed primarily at the lower end of the high net worth spectrum, and has a minimum investment requirement of $2,500.

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