JP Morgan is introducing an unhedged share class in its £114.5m global equity income fund after blaming recent poor performance on the decision to hedge the fund back into sterling.
The global equity income fund was ranked the 22nd-worst performer in the global sector in Bestinvest’s Spot the Dog report published last week. The fund is down by 2.4 per cent on a cumulative basis over a three-year period to August 26, according to Morningstar.
Portfolio manager in the global equity team Alex Robins says: “We hedge the currency in the fund back into sterling and so when sterling is weak against the euro, as it has been for the last three years, we do not benefit from being unhedged like other global competitors do, so we have lost a lot of performance by being hedged back into sterling.
“We are launching an unhedged share class for the fund towards the end of this year or the beginning of next year. I think the charges will be the same but we will have to confirm that. We have not seen the inflows we would like, we are still around £114.2m and we think we can grow to £616m.”
Premier Wealth Management managing director Adrian Shandley says: “There are so many currency-related crises at the moment, so I think hedging is the safest bet, although it might not produce the best returns all the time.”