JP Morgan Fleming has added a new twist to the theme of capital protection with the JPMF capital protection global growth fund.
This is a Dublin-based closed-ended fund that tracks the performance of a basket of six funds JPMF premier equity growth, JPM global fixed income, JPMF European growth, JPMF US growth, JPMF Japan growth and JPMF South East Asia.
Investors are guaranteed the return of their original capital at the end of the five-year term however the underlying funds perform. Investors will get 75 per cent of growth in the funds, which is calculated by comparing an average of the first 13 monthly valuations with the last 13 monthly valuations.
Geographical diversity is an advantage, but the funds do not carry equal weighting. The JPMF premier equity growth, which is in the UK all companies sector, represents 41 per cent of the portfolio, whereas JPMF South East Asia represents just 1.75 per cent.
Most capital protected products track one or more stockmarket indices like Manor Park's fixed income and growth fund, which risks capital erosion if the stockmarkets are lower at the end of the term compared to the beginning. In continental Europe, tracking a basket of stocks is more common, but the JP Morgan Fleming fund is less risky in that there is a greater spread of stocks within the six funds.
According to Standard & Poor's, four of the JP Morgan Fleming funds are top quartile and one fund – JPMF US growth is bottom quartile based on £1,000 invested on a bid-to-bid basis with net income reinvested over three years to October 15, 2001. There is no three-year past performance for the JPM global fixed income fund.