The Fusion range consists of five funds-of-funds, which are actively managed and positioned at the following points on the risk spectrum: income, conservative, balanced, growth and growth plus.
The launch brings together a dedicated JPM Asset Management fund team with specialist skills from JPM Investment Management and JPM Private Bank. The team is led by Jonathan Shelon, who will be joined in May by Tony Lanning, previously at Henderson Global Investors, as lead fund manager. The team will design and position the risk-graded portfolios to achieve an appropriate degree of diversification, which will be managed dynamically based on the investment team’s view of the market cycle.
According to JPMAM, recent regulatory changes have led to a significant upturn in interest in the fund-of-funds sector as advisers seek to de-risk through investment outsourcing. The creation of centralised investment proposition is at the hub of this change as adviser businesses create focused panels of outsourced solutions. Decisions on CIP and restricted advice are currently taking place, and JPMAM believes that the Fusion range utilises its core strengths of asset allocation and stock selection and brings significant global resource to the product range.
JPM also said that its size and scale enable the firm to tap into asset classes and share classes that more traditional fund-of-funds offerings in the market are unable to access. An example of this would be the DoubleLine US Mortgage Backed Securities fund, managed by Jeffrey Gundlach and researched by the JP Morgan team in New York. The fund offers a strong performance track record and gives a degree of diversification on fixed interest exposure but could not be accessed by JPMPrivate Bank until the strategy was launched through the European fund manager, Nordea, according to JPM.
Provider view
Jamie Farquhar, head of sales for JP Morgan Adviser Solutions, said: “The transitional shift in the market post-RDR has seen the importance of outsourced investment solutions grow significantly. Indeed, over the last five years the fund-of-funds sector has seen a remarkable growth in funds under management. We firmly believe that we are offering an innovative and differentiated fund-of-funds solution for financial advisers and consumers. Our Fusion fund range is designed to offer advisers a competitive and comprehensive investment solution for clients’ money, utilising JPMAM’s long-standing investment. We have listened to both advisers’ and clients’ concerns and built this fund-of-funds range based on a simple and transparent charging structure. 2013 is an important year for advisers post-RDR and we will continue to provide intermediaries with products, on-going support, insight and expertise to help them navigate the challenges ahead. Our Fusion fund range will play an important role.”
Adviser view
Alistair Cunningham of Caterham-based Wingate Financial Planning, said: “Every fund house and discretionary manager seems to have a multi-asset or fund-of-fund proposition at the moment. This makes it extremely difficult for JPMAM to differentiate itself. I’m not convinced of the need for alternative share and asset classes, what’s most significant is their ongoing governance and the total cost of investing in these funds. Like many new launches, JPMAM will be on the back foot as, with no track record for these specific funds, many firms may wait to see how the funds perform in the longer term. It is unlikely I would consider using them for clients presently.”
Charges
The fund range is risk-graded by Distribution Technology and Barrie & Hibbert and is available via JPMAM’s usual distribution partners and retail platforms for intermediaries. It carries an annual management charge 0.75per cent (C shares) and 0.18 per cent (capped additional expenses) – excluding underlying funds fees and expenses and any applicable third party platform fees.
Verdict
While JPM believes that its size and scale allow it to offer an innovative product range, it appears to be moving into an already busy market, and it may need to do more to stand out from the crowd.