JPMorgan Fund for Near-Retirees Takes on Unusual Risk

A fund for retirees and near-retirees from JPMorgan, the J.P. Morgan Income Builder Fund, aims to deliver institutional-type risks by investing in collateralized mortgage obligations, real estate investment trusts, high-yield debt, convertible bonds and emerging markets equities.

While these are instruments that financial advisers rarely recommend for older investors, portfolio Manager Anne Lester admits they may seem risky, but as proven by the recent market meltdown, having a portfolio too narrowly focused on traditional asset classes can prove to be an even greater risk.

The fund is part of J.P. Morgan’s new strategy to more aggressively pursue retail investors; the investment firm is now actively marketing the fund's 0.7% rise since inception in May, 2007. In that timeframe, the S&P 500 fell 9.5%. Last year, the J.P. Morgan Income Builder Fund rose 39.5%, handily beating the S&P 500’s 26.5% performance.