The income fund that goes further

Today, on the day of its official launch, JPMorgan Asset Management (JPMAM) announces further details and industry feedback to the new JPM Global Equity Income Fund.

The fund, developed in response to growing client demand and the changing investment landscape, will have an estimated gross yield of 4% and aims to provide increasing dividends as well as long-term capital growth. Dividends are key, but with this Fund, cash is most certainly king.

Why cash flow rather than just dividends?

Targeting companies with high dividend yield supported by free cash flow (which tend to outperform over time)

Strategies which just target the highest yielding companies tend to only be successful in defensive markets and cyclical sectors

Stocks with the highest dividend yield are often not cheap by other measures

Avoiding companies that cut dividends

Gerd Woort-Menker, manager of the JPM Global Equity Income fund comments: “The ‘go-anywhere’ JPM Global Equity Income Fund brings together the most attractive dividend-yielding companies from across the world. By focusing on companies with the potential for strong dividend growth, we believe investors could enjoy a rising income for years to come.”

Typical portfolio positioning

The Fund will invest globally across a range of different sectors. It is expected that over half of the portfolio will be positioned in Europe including UK, with the rest being made up from stocks from North America, Pacific ex Japan, Emerging Markets and Cash.

The Fund has already been very well received by IFAs and investment professionals.

Mark Dampier, Wealth Manager at Hargreaves Lansdown comments: “For clients who hold traditional UK equity income funds, this new launch gives you the opportunity to diversify your portfolio overseas without sacrificing the ability to obtain income.”

Graeme Currie, Alan Steel Asset Management explains: "We like the idea of a Global Equity Income fund. The outperformance of high yielding stocks with high dividend growth is widely accepted as the key to investing and with the depth of research and global capabilities of JP Morgan this is an attractive offering. Furthermore, the fact that only 13 of the top 100 yielding stocks are based in the UK, a global income fund offering makes sense."

JPM Global Equity Income Fund – Key Characteristics

Can be used as a core or satellite investment
No foreign exchange risk - fully hedged into sterling
Potential to beat inflation - growing level of income from capital appreciation
Fairly defensive - holdings are by nature stable
Potential to outperform through the cycle
Available for inclusion in an ISA