Aim: Income and growth by investing globally in equities
Minimum investment: Lump sum £3,000, monthly £100
Investment split: 100% in global equities
Isa link: Yes
Pep transfers: Yes
Charges: Initial 5.5%, annual 1.5%
Commission: Initial 4% until December 31, 2007, renewal 0.5%
Tel: 0800 727 770
The JPM global equity income fund will have an estimated gross yield of 4 per cent at launch and aims to provide investors with a rising income as well as capital growth. It will be run as a best ideas portfolio so fund manager Gert Woort-Menker will not be constrained by sector, region, company, size or benchmark weighting.
Highclere Financial Services partner Alan Lakey describes this as an innovative fund launched in time for the mad end of tax year rush. Looking at the fund’s objectives and strong points he says: “The fund’s mandate is to achieve a 4 per cent yield from an international portfolio of equities with the additional option of investing in Reits.”
Lakey finds the concept intriguing as international equities have outperformed global fixed interest funds over most periods, offering the prospect of rising capital and a rising income. “The charges are not unusual for a global share-based fund,” he says.
Turning to the potential drawbacks of the fund, Lakey says: “The concept stands up to scrutiny. However, as always, the determinant will be performance.”
Lakey notes that JPMorgan’s European and American funds are excellent performers. He also singles out its UK dynamic shares fund for praise. “However, the remaining equity funds are uninspiring. A similar complaint can be levelled at the bond funds. Ultimately a mixture of good growth and a worthwhile income will determine the success of the new fund,” says Lakey. He also mentions that the annual management charge is taken from the capital, which has potentially negative effects.
Scanning the market for possible competitors Lakey says: “Newton balanced is the nearest fund in terms of objective. Templeton growth and income and Invesco Perpetual world income are also contenders.”
He also says that advisers may also achieve the same objective as the new fund by portfolio balancing using a mix of global growth and fixed interest funds.
Summing up, Lakey says: “This is likely to be the first of many similar funds as fund managers search for the new big thing.”
Suitability to market: Good
Investment strategy: Good
Adviser remuneration: Average