The JPM global consumer trends fund aims for growth by investing in an unconstrained portfolio of 40-100 stocks that focus on themes such as luxury goods, leisure, health and wellbeing.
These themes will allow New York based fund manager Peter Kirkman to harness the growth potential of consumer trends such as the rise of mobile technology in Africa, increased demand for healthcare among the elderly and markets for consumer goods, services and luxury brands opening up in India and China.
Kirkham was formerly chief investment officer of JPMorgan Asset Management’s Japan equities team but moved to the US last year. He has the freedom to take significant positions at stock, sector and country level, which could enhance returns. However, the flip side of this is potentially higher volatility than funds which place limitations on portfolio weightings.
JPMorgan says the fund is unique as it focuses exclusively on consumer trends that form just a part of some managers’ equity portfolios. However, Morningstar observes that as other managers consider these same consumer trends in their sector selection and stock picking, it is unclear what will differentiate this fund.
The stocks or sectors in which the fund invests could also fall out of favour. In this situation, global equities managers who are exploring consumer trends as part of a wider portfolio could shift towards better performing areas in equity markets, but this fund would be exposed to periods of underperformance.