Fiducia Wealth Management
Posted in Financial Advice, ISA's on 04.09.13

Q. What is the underlying methodology behind the fund?

JPM Global Consumer Trends Fund aims to identify and benefit from structural changes in the consumer landscape. We identify three key drivers that are reshaping consumption: ‘Health & Wellness’, ‘Aspiration’ and ‘Demographics & Urbanisation’. Having identified these drivers of change, we look for companies that are likely to benefit from them. The Fund is a global fund with no sector, region or market capitalisation restrictions. This means that the fund manager is unconstrained when it comes to identifying the companies which are likely to thrive. The fund is managed by Peter Kirkman, who is supported by J.P. Morgan Asset Management analysts located around the world, each with their own regional or sector specialism. The portfolio comprises approximately 50 to 80 stocks.

Q. Are particular types of companies currently favoured?

Currently we favour companies that are able to tap into consumer-driven emerging market growth, are reasonably priced and for which we forecast strong earnings growth. On a sector basis, we favour healthcare stocks (Health & Wellness) and IT and gaming stocks (Aspiration). We also favour exposure to Hong Kong-listed Chinese companies (H-shares), as well as gaining exposure to Chinese companies through American Depositary Receipts, which means that any dividends and capital gains are realised in US dollars.

Q. What are the reasons for having a relatively large weighting in emerging markets, particularly China?

When assessing the structural changes shaping the consumer landscape, we believe that the emerging market consumer is one of the biggest influences. Emerging markets will account for a larger share of global consumption in the future, given the total size of the population and the expected growth rates of the economies. China is the leading force in this respect. While we can tap into the emerging markets growth story via western or local companies, the significant de-rating of Chinese stocks offers a great entry point. For us, despite investors’ concerns about a slowdown in economic growth, China remains the best market in terms of risk and reward.

Q. In which areas has the most value been found in the first half of 2013?

In the first half of 2013, the ‘Health & Wellness’ driver part of the portfolio has been the strongest positive contributor to performance. Western pharmaceuticals companies such as Sanofi are benefiting from the significant investment in the healthcare sector, notably in China, where the government is spending USD 125 billion on raising the standards of healthcare provision. Despite the re-rating in healthcare stocks, we find they are attractively valued versus other defensive areas of the market (such as consumer staples) and, as such, maintain our holding.

Q. What do you expect to be the biggest challenges for the fund over the next twelve months?

We expect our direct emerging market (China) exposure, which is close to 30% of the fund, to be challenging. While we believe that the de-rating of these stocks has been unwarranted and indiscriminately driven by fears about the top-line Chinese GDP growth figure, we hope that sentiment will begin to reflect the potential of this market. Behind the headline number, we see strong evidence of good consumer data, including income growth, and view the government’s measures to support future consumption as highly positive.

This document does not constitute an offer to sell or any solicitation of any offer to buy securities or any other instrument described in this document. J.P. Morgan Asset Management has expressed its own views and these may change. The data contained in this document has been sourced by J.P. Morgan Asset Management and should be independently verified before further publication or use. Neither this nor any other statement (oral or otherwise) made at any time in connection herewith constitutes an offer to sell or exchange units in the fund or any other fund or product and is not soliciting an offer to buy or exchange and does not constitute an invitation to subscribe for, buy or exchange any units in the Fund or any other fund or product in any jurisdiction where the offer, sale or exchange is not permitted. Potential investors are advised to obtain and review independent professional advice and draw their own conclusions regarding the economic benefits and risks of investment in the fund as well as the legal, regulatory, tax and accounting aspects in relation to their particular circumstances.

If you would like to know more about how we as Financial Advisers can help you  with your Investments then visit the Investment Management section of  our website: Investment Management or send us email at: email@fiduciawealth.co.uk

The information contained in website is for guidance only and does not constitute advice which should be sought before taking any action or inaction. The information is based on our understanding of legislation, whether proposed or in force, and market practice at the time of writing. Levels, bases and reliefs from taxation may be subject to change. Accordingly no responsibility can be assumed by Fiducia Wealth Management Limited, or any associated companies or persons, its officers or its employees, for any loss occasioned in connection with the content hereof and any such action or inaction. Professional financial advice is necessary for every case.

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Fiducia Wealth Management
Posted in Financial Advice, ISA's on 04.09.13