JP Morgan Asset Management shows appetite for Turkey

J.P. Morgan Asset Management has announced that effective from 5 December 2012, the JPM Europe Convergence Equity Fund (SICAV) will be renamed and repositioned as the JPM Turkey Equity Fund.

The decision has been made in order to concentrate on the very best investment opportunities and to offer investors access to the more sustainable long-term growth opportunities that Turkey has to offer.

Richard Titherington, CIO of Emerging Market Equities at J.P. Morgan Asset Management said: "Whilst European Convergence has been a dominant and successful theme for over a decade, we now feel that the sector looks more challenging and therefore, less compelling over the medium term. As investors move beyond asset allocating between the major BRIC markets, we want to give investors direct access to the most attractive second-tier markets that provide structural growth and high-quality businesses. Turkey is such a market and has sufficient liquidity for a single-country fund."

Sonal Tanna and Oleg Biryulyov will continue to manage the JPM Turkey Fund but the fund itself will move from a regional strategy to a single-country strategy with the investment objective and benchmark changing accordingly. Instead of the MSCI Custom Converging Europe 10/40 Index (Total Return Net), the fund will now be benchmarked against the MSCI Turkey 10/40 Index (Total Return Net).

There will be no change to the investment approach and research, which remains fundamental and bottom-up. The investment team adds value primarily through fundamental stock selection based on local knowledge and frequent company contact. They look to identify businesses with above average quality and growth prospects and build high-conviction portfolios.

On the investment case for Turkey, Titherington commented: "Turkey has demonstrated consistent macroeconomic normalisation post the 2002 crisis. Several key reforms have taken place, notably the liberalisation of foreign investments and a wide privatisation programme, mainly in the utility sector. There has also been an upgrading of the institutional framework encouraging modernisation and market friendly policies. However, the disinflation process since the beginning of 2000 has perhaps been the most notable development and reflects a strong commitment in terms of focused monetary policies and productivity improvements.

"Like many other emerging market investors, we think Turkey is a structurally attractive market because of its strong demographic profile. Turkey benefits from one of the most growth friendly demographics in the emerging world with half of the population being under the age of 29 providing a ready supply of labour and support for solid consumption growth."