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JPMorgan Fantasy Fund Manager competition: Choosing the right plays for better performance
Putting yourself in the shoes of fund managers can be a daunting task. There has been a wholesale shift from the ‘big four’ asset classes of equities, bonds, property and cash to also incorporate multi-asset and absolute return vehicles. Then there is value, growth and income-based styles, thematic approaches, SRI concepts, capitalisation-based strategies and domestic versus global allocations all jostling for consideration.
The remaining allocations I would make are diversification calls, 5 per cent apiece: JPM European Smaller Companies (for small-cap growth in recovery phase), JPM Global Consumer Trends (east meets west in defensive, luxury-brand growth), JPM Global Property Securities (diversification) and JPM Global Healthcare (a defensive play and diversification with US, UK and European exposure).
In my fantasy portfolio, fixed income would be limited to a 20 per cent allocation in the JPM Global High Yield Bond fund. Despite its sterling exposure, this fund’s performance has out-stripped the other contenders, JPM Global (ex UK) Bond and JPM Strategic Bond.
However, I don’t have high conviction in high yield, mostly due to worries about a double-dip recession and a niggling concern that 2010 is when corporate defaults will spike as the UK economy stagnates.
Some funds my colleagues favoured but I dismissed – because of minimum allocation rules and higher conviction elsewhere – include JPM Highbridge Statistical Market Neutral, JPM Cautious Total Return and JPM Multi-Asset Income.
These will duly be on my ‘watch list’, along with JPM Strategic Bond, which was only launched in May and therefore lacks a track record but has a promising run so far.
Anna Lawlor is acting features editor at Investment Adviser,
* Tanya Powley is now a reporter on FT Money
