JPMorgan Asset Management, a unit of
JPMorgan Chase & Co.
), plans to close another 100 funds out of its existing 650
funds, according to a Financial Times report. The closure will
comprise 15% of its active funds across Asia and the U.S.
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As part of the recent plans, JPMF Europe Dynamic Mega Cap fund
will merge with the JPMF Europe Dynamic fund and The JPMF
Emerging Markets Infrastructure equity fund will merge with the
JPMF Emerging Markets Equity fund.
Earlier, the company had disclosed its plan of closing 49 funds
in Europe by first-quarter 2014.The major reason for JPMorgan to
close funds is to simplify its existing fund range.
The recent news is in line with JPMorgan's efforts to streamline
its business by winding up unprofitable products and strategies.
Further, the amount saved will be utilized in more profitable
avenues like exchange traded funds (ETFs) and target date funds.
While the former is gaining increasing popularity as a new form
of investment with greater returns, the latter is already in
demand among the U.S. pensioners.
Similar to JPMorgan, in Jun 2013,
) announced its intention to close nearly 250 funds out of its
existing range of products in order to focus more on portfolios
that contribute a major proportion to revenues.
At present, JPMorgan is facing a series of lawsuits related to
the financial crisis. In a desperate attempt to resolve all
probes and legal woes, the company is in negotiation with various
agencies for a multi-billion dollar settlement. Though the exact
settlement amount is not known, it could range from $3-$7
billion, according to market rumors.
These legal hassles tend to tarnish the company's reputation and
increase its expenses. Hence, to improve the situation, JPMorgan
is undertaking aggressive cost cuts and trying to improve its
JPMorgan currently carries a Zacks Rank #3 (Hold). Better
performing banks worth considering include
Tower Financial Corp.
Enterprise Financial Services Corp.
). While Tower Financial Corporation carries a Zacks Rank #1
(Strong Buy), Enterprise Financial Services holds a Zacks Rank #2