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A taste of investment trusts from JPM

JP Morgan Asset Management sees its elect managed growth multi-manager investment trust as offering an introduction to the sector for IFAs in the run-up to the retail distribution review.

The company says some advisers tend not to buy investment trusts because the low-cost charging structure does not cater for initial and renewal commission. But with adviser business models moving away from commission after the RDR, the company says these advisers will have a range of investment trusts they can choose from, rather than focusing on open-ended funds.

JPM feels the changes brought about by the RDR are not enough to encourage advisers to look at investment trusts and that they need genuine reasons to choose them over the open-ended funds they are more comfortable with.

The firm wants to help IFAs understand the differences between open and closed-ended funds and the benefits of the investment trust structure. Its hybrid multi-manager approach has JPM’s investment trust range as its core, with satellite holdings in open-ended funds and third-party funds in areas of the market where there are no suitable JPM investment trusts.

This may be because a particular market or asset class can only be accessed through an open-ended fund, or performance is better elsewhere. The firm says elect managed growth gives advisers a feel for the structure and what it can do for clients.

JPM head of investment trust marketing James Saunders Watson says: “Elect managed growth provides good exposure to investment trusts, with the benefit of asset allocation among our best ideas. It has the ability to invest in open-ended funds where there are gaps in the investment trust market and can hold up to 25 per cent in third-party funds where there are gaps in our portfolio.”

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