The new JP Morgan Total Emerging Markets Income fund straddles investments in debt and equities in an attempt to broaden the emerging markets opportunity.
Launched at the end of October, the fund is domiciled in Luxembourg and is managed by Richard Titherington and Pierre-Yves Bareau, who are the chief investment officers for emerging market equities and emerging market debt respectively.
It will use flexible, strategic asset allocation and active risk management and will take both a top-down and bottom-up approach to security selection. It intends to give strong risk-adjusted returns and a stable source of income, targeting a 6 per cent gross yield.
The fund aims to manage the potential for volatility in emerging markets, while tapping into the increasing realisation that they can be a source of growth as well as yield. It proposes to offer diversification through combining debt and equity exposure.
The fund has an initial minimum investment of £1,000 and an annual management charge of 1.25 per cent.
This fund taps into a couple of areas that represent particular current interests for investors.
Emerging markets have been a real success story over the past few years, ever-growing in popularity and corresponding to a thirst for adventure in investors. Portfolio diversity is being sought, not to mention the next great global success story. While it’s hard to be certain of where the next China will be, investing in emerging markets can give the opportunity for great returns.
The debt side of this fund is especially topical with emerging market debt being popular with managers, and having a fund that buys into this represents an understanding of this trend.
Stating an approach of working top-down and bottom-up doesn’t really tell us anything other than that all relevant factors will be taken into account. Managers often state a preference for one or the other, but clearly neither is intended to be the driving force in this fund. Hopefully this means a holistic approach to stock selection.