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Investment focus: Jupiter Global Emerging Markets Fund Go compare with our comparison table

Investment focus: Jupiter Global Emerging Markets Fund

11 January 2011 / by Paul Dicken

Jupiter launched its Global Emerging Markets Fund at the end of last year, adding to a range of emerging market funds investing in specific countries or regions. The Global Emerging Markets Fund joins the Jupiter Asian, Jupiter China, Jupiter India and Jupiter Emerging European Opportunities funds.

We asked fund manager Kathryn Langridge about the global nature of the newest fund in range and her thoughts on the how emerging markets might fare in 2011.

For more information about this fund and details of how to invest via the Fair Investment ISA and Investment Account, visit Jupiter Global Emerging Markets Fund.

1.  Alongside the other Jupiter funds focusing on specific emerging markets, what does the Global Emerging Markets fund offer?

The Jupiter Global Emerging Markets Fund invests across a wide spectrum of emerging markets in Latin America, Asia Pacific and Eastern Europe including Russia, the Middle East and Africa. This diversified approach aims to enable investors to capture the long term growth opportunities in a broad range of markets and industries at varying levels of development. The fund provides a vehicle for those who do not wish to make regional asset allocation decisions, but draws on the strengths, experience and investment research of Jupiter's existing regional teams.

While primarily a bottom-up fund, stock decisions are made in the context of a considered understanding of the macro-economic framework which helps to drive asset allocation. Stock selection is defined by identifying the best quality companies, large and small, with strong balance sheets, lean capital structures, generating positive free cash flow, and where investor interests are aligned. The valuation discipline - paying a reasonable price based on reasonable expectations - is key.

We favour companies which pay dividends, believing that a rising dividend stream associated with rising cashflow is a sign of management discipline, and suggestive of relatively higher standards of corporate governance and transparency.

2. After a year of strong performance in many emerging stock markets some commentators have voiced concerns about the prospects in 2011, around inflation and other issues. What are your thoughts on the 2011 outlook?

We maintain a positive outlook for investment prospects in global emerging markets in 2011, based on their superior economic growth, solid earnings, reasonable yield and valuations which remain attractive.

Domestic demand continues to drive economic expansion and will present attractive investment opportunities in areas such as financial services, infrastructure development and consumption. Commodities such as copper, coal and oil will be supported by consumption-driven demand.

The major risks likely to cause volatility in markets include inflation and the possibilities of policy mistakes, especially in Asia and Latin America; unresolved sovereign problems in the European periphery; and the withdrawal of QE2 [quantitative easing economic stimulus in the USA].

3. How would you describe the fund in terms of its role in an investment portfolio in 2011?

We are positive on the absolute and relative return potential of emerging markets in relation to developed markets based on a range of supportive economic and valuation measures. Their superior long term growth rates are underpinned by strong sovereign, corporate and personal balance sheets, and powerful demographics.

These factors will drive powerful trends in consumption and investment in contrast to the constricted prospects for much of the developed world. Carefully targeted investing in the strongest quality businesses across a diversified range of emerging markets and themes offers exposure to long term sustainable growth and we believe the scarcity of growth in the world will continue to prove attractive to investors.

For more information about this fund and details of how to invest via the Fair Investment ISA and Investment Account, visit Jupiter Global Emerging Markets Fund.

© Fair Investment Company Ltd

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