JP Morgan Asset Management plans to raise more than £150m for the launch of its first multi-asset investment trust, JPMorgan Multi-Asset Trust.
The trust is the asset manager’s first foray into multi-asset space in a UK-listed, closed-end vehicle and will be managed by Talib Sheikh, Katy Thorneycroft and Gareth Witcomb, who currently run open-end funds
It will aim to return 6 per cent per annum (net of fees) including an initial 4 per cent dividend to be paid quarterly as part of the total returns to its shareholders.
The investment team intends to achieve these returns with a typical volatility at two thirds that of a traditional equity portfolio.
The new trust will also serve as a rollover option for shareholders of JP Morgan Income & Capital Trust, which is scheduled to wind up imminently.
While JPMorgan Income & Capital Trust was limited to UK equities and high-quality bonds, JPMorgan Multi-Asset Trust, is designed to offer investors both income and capital growth from a globally-diversified, flexible, multi-asset strategy.
“This represents our first move into the multi-asset space with a UK investment trust” said Simon Crinage, head of investment trusts at JP Morgan Asset Management.
“Investing in less liquid areas of the market, such as through an allocation to infrastructure, plays well to the strengths of an investment trust’s closed-ended structure.”
JP Morgan Multi-Asset Trust will invest across six different asset classes in more than 40 geographies and may also include allocations to alternatives, such as infrastructure, which Crinage believes has the potential to offer “an attractive source of income, a degree of inflation protection and diversification alongside traditional asset classes”.
Lead portfolio managers Sheikh, Thorneycroft and Witcomb currently work within the firm’s Multi-Asset Solutions team, a group of investment professionals managing assets of over £200bn.
Commenting on the new fund launch, co-manager Sheikh said: “We know UK investors are feeling the income squeeze, so we recommend widening the net.
“We believe looking globally should be a priority for income seekers in order to achieve the best risk-adjusted returns as well as to maintain the flexibility and diversification needed to navigate the changing macro environment.”
Talib Sheikh and Gareth Witcomb both manage the £146.9m JPM Global Macro Balanced together with manager James Elliot.
The fund was a top quartile performer in the IA Mixed Investment 0-35% Shares sector last year, and was one of the best performing multi-asset funds of 2017 with a total return of 9.70 per cent, as the chart below shows.
Performance of fund vs sector and benchmark in 2017
Source: FE Analytics
Thorneycroft, a senior portfolio manager in the Global Multi-Asset Group, focuses on multi-strategy investing, including benchmark-oriented, flexible and total return strategies, as well as funds of investment trusts.
Thorneycroft is currently a co-manager on JPMorgan Multi Manager Growth, JPMorgan Elect Managed Growth, and JPMorgan Elect Managed Cash.
The management fee for JPMorgan Multi-Asset Trust will be 0.65 per cent of net asset value up to £250m and 0.60 per cent thereafter. The trust will not carry a performance fee.
Shares will be priced at 100p each and a minimum subscription amount of £1,000.
Chelsea Financial Services managing director Darius McDermott said the launch of the investment trust launch was broadly positive.
“They are very credible multi-asset investment managers so we give our thumbs up to the new launch, not a huge thumbs-up but a thumbs-up.
“The structure looks strong and their charges are reasonably competitive, so we like it. We have also known the team for a long time.”