New fund marches to own drummer
Tired of watching the value of your mutual funds fluctuate with the roller coaster of the global stock markets?
Jardine Fleming Asset Management sees more than a few investors ready to sign on for a product whose performance is independent of the benchmark indices. The result is the recently launched JF Evergreen Fund - the first 'total return' fund released by the brokerage house.
Instead of tracking the performance of a particular stock market index, the Evergreen Fund can swap among different asset classes or stock markets, depending upon market conditions. This kind of dynamic portfolio strategy is said to enable the fund to provide better returns and reduced risk in rocky markets.
'The idea is by allocating quite aggressively between different asset classes during a time of rising equity trends, we will be able to participate in some of that upside, but when the outlook for equities is much more cloudy ... we have an option to be invested outside equities into bonds and cash,' says the London-based manager of the Evergreen Fund, Jonathan Lowe.
Unlike hedge funds which also employ a dynamic portfolio strategy, the Evergreen Fund's mandate does not include the ability to short sell.
Evergreen will adopt the structure of a fund of funds, investing in a wide range of equity, bond and money market funds managed by JF Asset Management and JPMorgan Asset Management.
'The pallet of fund choices that we have available is as full and varied as anyone else is to offer, and that gives me a variety of choices to be able to construct a portfolio,' Mr Lowe says.
Subscribers to the fund before February 27 will be offered a discounted preliminary charge of 1 per cent, a reduction from the published rate of 3 per cent.
The minimum lump sum investment is set at US$5,000, or HK$1,000 on a regular monthly savings programme.
Mr Lowe says initially the fund will put roughly 50 per cent of its assets into equities and 50 per cent into bonds and cash. In terms of regional allocation, Mr Lowe says he favours Japan and Europe.
'We will retain significant exposure to the euro, against which the dollar should continue to weaken,' he says. 'This is an intermediate product on the low to medium end of the risk scale.'
