Investment Focus: JP Morgan Global Consumer Trends Go compare with our comparison table

Investment Focus: JP Morgan Global Consumer Trends

02 February 2011 / by Paul Dicken

The JP Morgan Global Consumer Trends fund is available through Fair Investment Company at 0.00% initial charge

The JP Morgan Global Consumer Trends was celebrating in January with an AAA rating from the research team at Citywire, on top of an A rating by OBSR researchers and inclusion in the Rayner Spencer Mills list of rated funds.

The positive findings from researchers were attributed to the fund’s ‘well resourced team, solid processes and good track record of meeting its objectives’ by JP Morgan Asset Management.

Thematic and unconstrained, the Global Consumer Trends Fund is a higher risk fund that can invest across sectors and countries in search of the consumer behaviour that is driving equity markets.

Global investing

To reflect the fund’s remit it recently moved from the Investment Management Association (IMA) Specialist sector to the IMA Global sector.

JP Morgan said the fund ‘achieves its performance by tapping into consumer trends, driven by structural drivers such as demographics, health and wellness, and aspiration. Moving to the Global sector meant the fund was ranked second in that sector based on performance since inception.

In the year ending on 31 December 2010, the fund returned 21.15 per cent, while the overall return from the fund’s launch in April 2008 to the end of 2010 was 50.23 per cent. As with all investments, past performance is not a guide to future performance.

Commenting on the move to the new sector and ratings announcements, fund manager Peter Kirkman said: “Whether it’s buying large cap Western pharmaceutical brands that are conscious of the geographical shift of earnings towards emerging markets, or luxury brands, such as Abercrombie and Fitch, that are benefitting from the aspiration to own a well established brand, we identify a number of companies that can benefit substantially from the long term structural shifts in the consumer landscape.”

The latest breakdown of the fund’s holdings showed that the fund was investing in a wide range of countries; although half of the holdings are in the United States and the UK, the fund invests in China, France, Switzerland, the Netherlands, India, Indonesia and Australia, amongst other countries.

This global approach allows the fund to gain exposure to developed market companies such as Nestle or Hewlett Packard which may be experiencing growth in emerging market operations, or good performance in their more established global and domestic operations.

Consumer trends

Under the three major themes of aspiration, demographics and urbanisation, and health and wellness, there are specific buying trends that the fund tries to benefit from.

This can include investing in luxury brand names that are benefiting from new customers in the emerging middle class. As incomes grow in countries such as China and Brazil there is increasing demand for more expensive items, tied in with the aspiration theme.

Urbanisation, the process of population movements from rural areas to cities, also leads to changing buying habits, while the fund sees investment opportunities in areas like drug and hip replacement manufacture in Japan due to the country’s ageing population.

Another source of growth the fund identified in 2010 was the mobile phone market. For example the Johannesburg listed MTN group has a strong position in Middle East and African markets, with mobile licences in 21 countries and other 100 million subscribers.

Unlike other funds that may sell or buy shares based on short term developments, the Gloabl Consumer Trends Fund will take a longer term view on structural changes. As a result the fund’s objective is to provide long term capital growth.

The fund manager Peter Kirkman works with the Global Equities Team at JP Morgan, as well as being able to draw on the expertise of 260 regional sector specialists, to help arrive at his stock selections.

Fair Investment Company's view on the JP Morgan Global Consumer Trends fund

Head of savings and investments, Nick Scarrett says: "The JP Morgan Consumer Trends fund offers an interesting angle for 2011, aiming to benefit from enduring long-term changes in consumer trends around the world driven by its 3 pillars of aspiration, demographics & urbanisation and health & wellness."

For more information about this fund and details of how to invest via the Fair Investment ISA and Investment Account, visit JP Morgan Global Consumer Trends Fund. The fund is available through Fair Investment with no initial charge. Visit the Investment section for more information on other investments available.

No news, feature article or comment should be seen as a personal recommendation to invest.

The value of investments and income from them can fall as well as rise and you may not get back the full amount invested. Different types of investment carry different levels of risk and may not be suitable for all investors. Past performance is not a guide to future performance.

Prior to making any decision to invest, you should ensure that you are familiar with the risks associated with a particular investment and should read the investment Factsheet.

If you are in any doubt as to the suitability of a particular investment, both in respect of its objectives and its risk profile, you should seek independent financial advice.

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To provide long term capital growth by investing primarily in companies throughout the world benefiting from consumer driven opportunities. See latest fund factsheet for details.

The value of investments and any return from them can fall as well as rise and you may not get back the full amount invested. Please ensure that you read the Important Risk Information below.