JPM emerging markets infrastructure fund one year on

Whilst the global downturn has cut state spending in a number of areas, infrastructure in emerging markets is not one of them says J. P. Morgan Asset Management. Fiscal stimulus packages around the world are, in many cases, proving to be a catalyst to countries' long term commitment to infrastructure spending, particularly in emerging markets, and are providing investors with a unique growth area in the current market.

After the fund's first year, Richard Titherington, portfolio manager for the JPM Emerging Markets Infrastructure Fund explains: "The fundamental reasons to invest in infrastructure in the emerging world are long term and have not suffered nearly as much by the global economic downturn as those in developed regions. For example, emerging urban populations are projected to grow between 133% and 150% faster than current overall population growth, with more than 350 million people, moving to urban areas between 2010 and 2015. That's five times the population of the UK and the building and development to accommodate these people is forging ahead. In addition, more than half (59%) of the medium and long-term loans made in China during the first half of 2009 went to the infrastructure sector, typically into central and local government projects."

JPM Emerging Markets Infrastructure Fund, and its Luxembourg-domiciled SICAV, are designed to benefit from those companies at the forefront of the infrastructure boom and positioned to benefit from fiscal stimulus infrastructure spending. All over the emerging world, governments and businesses are recognising the need for heavy investment in infrastructure. In fact, infrastructure spending in emerging markets is projected to reach USD 21.7 trillion over the next decade, as countries seek to support growing urban populations and sustained economic growth.

On the positioning of the fund, Titherington explains: "The fund's mandate allows it to gain varied exposure to the infrastructure theme, from raw materials to construction, real estate to air freight. Investing across seven sectors including energy, materials, capital goods, transportation, real estate, telecommunication services and utilities, the fund has access to a diverse range of infrastructure opportunities that are growing faster than the broader market."

The JPM Emerging Markets Infrastructure Fund has returned 39.9% YTD in 2009 against a return of 28.9% for the MSCI customised EM Infrastructure index and 33% for the wider MSCI Emerging Markets index.