JPM Emerging Markets Infrastructure fund
Sheridan Admans, investment adviser at The Share Centre, sets out the case for long term infrastructure investment in emerging markets via JPM Emerging Markets Infrastructure fund.
As emerging markets pursue economic growth at pace, improvements in infrastructure should help improve competition and stimulate growth.
Improvement and development of infrastructure in emerging markets is an important factor when seeking to compete on the global stage. With the emerging markets set to out grow developed economies by 2050, investment in strategic assets such as roads, rail, seaports, gas, electricity, telecommunication and water utilities is key.
"By the very nature of the businesses involved with these key services, the companies are naturally seen as being defensive and mature, suggesting reasonable levels of dividends and dividend growth. This is further aided by high barriers to entry, strong pricing power, sustainable growth and predictable cash flows making the asset class a relatively safe haven in an uncertain financial world.
"What makes the JP Morgan fund stand out in this space is that the manager takes a long term view of the assets he holds. He not only invests in the operators of the assets such as utility companies, but also invests in the providers of the raw materials such as cement and steel companies and also the industrial companies which construct, for example, the roads, railways and power stations.
"The fund is managed by the highly respected Richard Titherington of the JP Morgan Emerging Markets team and together they bring local knowledge to the fore when selecting potential investment opportunities.
"This fund is suitable for those investors wanting emerging market exposure, albeit with a form of defensive feel through the underlying companies. Investment in this fund should be seen to be with a minimum 5 year time horizon.
"As the fund offers exposure to emerging markets, we have rated this fund as high risk, albeit in respect of more common mainstream funds focusing on this investment arena, this fund would rank at the lower end of those given the natural defensive qualities of the underlying investments.
"The JP Morgan Emerging Markets Infrastructure fund has an annual charge of 1.75% and an initial charge of 4.25%. The minimum initial investment is £1000, with top ups of £100.
"As the fund features in The Share Centre's Platinum 120 range, customers wishing to invest in the JPM Emerging Markets Infrastructure fund will not have to pay the initial charge or purchase dealing commission. Customers can also invest in the fund from as little as £10".