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“It’s appalling what people have been sold. You open the paper every day and see things that make you wince.”

Campbell Fleming, managing director of JPMorgan Asset Management’s UK operations, delivers this verdict on the financial crisis. Yet he remains an optimist, preferring to see it as an opportunity for big brand fund managers to gain market share.

With $1,200bn (£690bn, €930bn) under management, JPMAM was the 11th-largest player in the global industry in 2007, according to a report published this month by the consultants Watson Wyatt . Up from 12th place in 2006, JPMAM has ambitions to be in the top 10.

In the UK Oeic and unit trust universe, Mr Fleming boasts that JPMAM is one of only five fund managers with positive year-to-date sales figures. “We are seeing a flight to quality, simplicity and transparency,” he says.

But the funds that have seen the strongest inflows have not been the plain vanilla equity strategies. The top three asset gatherers this year so far have been the £1.1 JPM Natural Resources fund, the £559m JPM Cautious Total Return fund and the £180m Europe Dynamic ex UK fund.

Mr Campbell rejects the notion the commodities rush was an anomaly of the first two quarters, when resources were the only asset class rising. Instead, he sees the success of JPM Natural Resources as part of the trend towards multi-asset investing, which in his view the financial crisis will accelerate rather than interrupt.

“The drive to improve professional standards, TCF and RDR, is making people build much more thoughtful, diversified portfolios that are starting to look more like a Harvard or Yale foundation. That learning that has come from the sophisticated investor is being deployed in the broader retail marketplace,” he explains.

Hedge funds have possibly benefited more than any other product from the theory of diversification. Institutional investors began to make allocations to hedge fund strategies in the belief they constituted an “alternative” asset class in their own right. JPMAM reacted by buying a majority stake in Highbridge Capital in 2004. The company now has the biggest hedge fund business in the US.

JPMAM’s Luxembourg-domiciled hedge fund range is not yet available with the sterling share class preferred by retail investors. Mr Fleming says launching a version for advisers is “on the drawing board” but cites various administrative obstacles. “As and when we can, we would have an Oeic sterling version for distribution here,” he says.

Meanwhile, JPMAM was one of the first houses to launch 130/30 funds in the UK retail market. These use leverage and shorting to amplify an active manager’s potential to make – or lose – money.

But how does the company’s strength in such sophisticated strategies square with the “flight to transparency” Mr Fleming is observing? The hedge fund industry has seen massive redemptions this year for failing to deliver the all-weather returns it promised.

Again, Mr Fleming sees the crisis as an opportunity for consolidation. Insisting all of JPMAM’s funds “do what they say on the tin”, he welcomes the disappearance of the “more egregious” hedge funds.

“Anyone used to be able to set up in a garage in Dublin, call themselves a hedge fund manager, take in huge amounts of assets and charge 2.5 per cent. The current market will sort the wheat from the chaff. If you have the balance sheet, the people and the brand, you should be a beneficiary of what is happening,” he says.

A more immediate beneficiary of investors’ appetite for transparency, however, has been JPMAM’s huge liquidity fund business, which accounts for 34 per cent of global assets under management. Mr Fleming says it has received global inflows of more than $69bn year-to-date, as investors have bailed out of equity markets into the safe haven of cash.

He also stresses that none of JPMAM’s funds was exposed to the asset-backed securities that forced the suspension of three BNP Paribas “enhanced” liquidity funds in August last year – the event that for many marked the start of the credit crunch.

Of the major asset classes, fixed income is the area that requires the most attention, says Mr Fleming. Although a robust bond range is necessary mainly to attract institutional clients, he sees scope for synergies with the retail universe, as defined contribution schemes increasingly allow for individual investor choice.

“We have global high yield and emerging markets, and US core is also good. Where we’ve suffered is in core UK and European corporate bond strategies. As a result of changes in accounting standards, equities are becoming too costly for corporates to hold in their pension schemes, and they’re moving to bonds and alternatives. We’ve missed out there,” he says.

In a decisive effort to fill this gap, JPMAM poached three credit experts from Schroder Investment Management last month, including Robert Michele as global head of fixed income. “We’re finalising things at the moment. We’ll be launching in the first or second quarter of next year, market conditions permitting,” says Mr Fleming.

Holistic 'decumulation' products are another area where JPMAM is set to expand. The company has a popular range in the US called 'Lifecycle', which offers retail investors a shifting asset allocation benchmark dependent on the number of years from retirement. Fidelity has introduced this concept in the UK with its 'WealthBuilder Target' range. JPMAM is keen to challenge Fidelity’s leadership, according to Mr Fleming.

“We’re having a good look at these products. It could be time for the next generation of those products, especially after a difficult period like this one. People are realising it’s best to leave these things to the experts,” he says.