JPM Fund Manager

JPM UK Equity Core Fund: More excess returns, less volatility

Andrew Robbens explains why we believe the JPM UK Equity Core Fund is ideally placed to guide investors through any future Brexit-related volatility.

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Feb 05, 2018
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We believe the innovative and competitively priced JPM UK Equity Core Fund is ideally placed to guide investors through any future Brexit-related volatility.

Low cost, low active risk approach

UK stocks are riding high and the outlook appears positive given the strong global backdrop. However, concerns about Brexit remain, with many investors still wary about the potential for volatility as Britain negotiates its departure from the European Union (EU).

In this environment, the JPM UK Equity Core Fund’s low cost and low active risk approach provides the opportunity to share in the UK market’s long-term growth while targeting consistent outperformance through any market turbulence that lies ahead. 

The key to the fund’s success is a tried and tested investment approach that looks to reduce emotion in investment decisions. Emotions, such as fear and greed, can cause share prices to diverge from fair value in persistent and predictable ways that can be exploited by rigorous stock research.

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With emotions running high since the EU referendum, the fund’s disciplined stock selection and risk management process is well placed to capitalise on the share price anomalies that Brexit may be creating. 

Driven by stock selection

The behavioural biases targeted by the fund’s portfolio managers are exploited by taking small overweight positions in attractively valued, high quality stocks with positive momentum within each sector of the market. Small corresponding underweight positions in each sector are taken in stocks that are expensive, low quality and have weak momentum.

The fund’s sector allocations therefore closely mirror the sector weightings of the FTSE All-Share Index (net), which means that any macro news that impacts a sector more broadly will not necessarily impact the fund’s performance relative to the FTSE All-Share index.

Instead, the fund aims to generate small and consistent incremental excess returns driven by positive stock selection within sectors. 

Strong track record of outperformance

These small excess returns add up over time. The JPM UK Equity Core Fund has outperformed the FTSE All-Share in every rolling three-year period since the launch of the strategy on 31 March 2009 (based on timing-adjusted returns, which remove any impact from the time difference between when the fund and index are priced)1

Source: J.P. Morgan Asset Management as of 31 December 2017. Fund inception date is 1 June 1997. Share class E launch date is 1 February 2011. Fund performance is shown based on the NAV of the share class E (acc) in GBP including ongoing charges, excluding any entry and exit charges, with any income (gross ) reinvested. Excess return calculated geometrically. Past performance is not an indication of current and future results.

This consistent outperformance has been achieved with less volatility than the index over one, three and five years—a track record that the investment team are rightly very proud of.

UK equities continue to give investors exposure to the improving global economy. There will be bumps in the road, not least caused by Brexit, but this will create opportunities for active managers with a strong research platform. In this environment, JPM UK Equity Core Fund is one option worth considering.

Andrew Robbens is a Client Portfolio Manager on the JPM UK Equity Core fund. Read more >

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Read more about the JPM UK Equity Core Fund

1. Source: J.P. Morgan Asset Management as at 31 December 2017. Fund performance is based on NAV of the share class E (inc), timing adjusted in GBP with income (gross) reinvested including ongoing charges, excluding any entry and exit fees. From inception on 31 March 2009, 3 year rolling returns with monthly step. Provides indicative returns that account for the timing difference between pricing of the pooled fund and its benchmark. Past performance is not an indication of current and future results.

Investment Objective: The fund aims to provide capital growth and outperform the FTSE(TM) All Share Index over the long term by investing primarily in a portfolio of UK Companies.

Key risks: The value of equity and equity-linked securities may fluctuate in response to the performance of individual companies and general market conditions. The single market in which the Fund primarily invests, in this case the UK, may be subject to particular political and economic risks and, as a result, the Fund may be more volatile than more broadly diversified funds.

For Professional Clients only – not for Retail use or distribution. This is a marketing communication and as such the views contained herein are not to be taken as advice or a recommendation to buy or sell any investment or interest thereto. Reliance upon information in this material is at the sole discretion of the reader. Any research in this document has been obtained and may have been acted upon by J.P. Morgan Asset Management for its own purpose. The results of such research are being made available as additional information and do not necessarily reflect the views of J.P. Morgan Asset Management. Any forecasts, figures, opinions, statements of financial market trends or investment techniques and strategies expressed are, unless otherwise stated, J.P. Morgan Asset Management’s own at the date of this document. They are considered to be reliable at the time of writing, may not necessarily be all inclusive and are not guaranteed as to accuracy. They may be subject to change without reference or notification to you. It should be noted that the value of investments and the income from them may fluctuate in accordance with market conditions and taxation agreements and investors may not get back the full amount invested. Changes in exchange rates may have an adverse effect on the value, price or income of the products or underlying overseas investments. Past performance and yield are not a reliable indicator of current and future results. There is no guarantee that any forecast made will come to pass. Furthermore, whilst it is the intention to achieve the investment objective of the investment products, there can be no assurance that those objectives will be met. J.P. Morgan Asset Management is the brand name for the asset management business of JPMorgan Chase & Co. and its affiliates worldwide. To the extent permitted by applicable law, we may record telephone calls and monitor electronic communications to comply with our legal and regulatory obligations and internal policies. Personal data will be collected, stored and processed by J.P. Morgan Asset Management in accordance with our EMEA Privacy Policy www.jpmorgan.com/jpmpdf/1320694304816.pdf. Investment is subject to documentation which is comprised of the Prospectus, Key Investor Information Document (KIID) and either the Supplementary Information Document (SID) or Key Features/Terms and Conditions, copies of which can be obtained free of charge from JPMorgan Asset Management (UK) Limited. This communication is issued by JPMorgan Asset Management (UK) Limited, which is authorised and regulated in the UK by the Financial Conduct Authority. Registered in England No: 01161446. Registered address: 25 Bank Street, Canary Wharf, London E14 5JP. 0903c02a8205fab0

Go to the profile of Andrew Robbens

Andrew Robbens

Client Portfolio Manager, UK Equity Group, J.P. Morgan Asset Management

Andrew Robbens is a client portfolio manager within the J.P. Morgan Asset Management UK Equity Group.

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