Thursday, July 18, 2013

JP Morgan US Value Equity Off-shore fund

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Riding high on a strong US market, JP Morgan Asset Management plans to come out with their 'JP Morgan US Value Equity Off-shore fund'. This would be the fifth offering by an Indian fund house to invest in world's largest stock market.

The JP Morgan US Value Equity Off-shore is an open ended fund and will be available for subscription from July 17th to 31st. Since it is a fund of fund scheme, the money will be invested in JP Morgan-US Value Fund which is an equity fund and invests in value-style biased portfolio of US companies. The fund will be benchmarked against Russell 1000 Value Index.

 

Nandkumar Surti, MD and CEO at JP Morgan AMC says, "One of the main aim to bring the US Value fund to Indian investors because of belief is that high quality picks in the US stock markets offers attractive valuations today. This fund offers a good diversification opportunity for the Indian investors."

 

The portfolio of US Value Fund is built by bottom-up stock selection and looks for quality companies which are trading at a discount to their intrinsic value. Such approach leads to a portfolio that has historically shown less volatility than the market with less exposure to the downside. The investment philosophy of the US Value Fund is founded on the belief that companies which possess the ability to consistently generate free cash flow and effectively allocate capital to generate growth in value per share will, over the long term, outperform stock market averages.

The rush to come up with the US dedicated fund started in early 2011, when Motilal Oswal came out with their Motilal Oswal MOSt NASDAQ-100 ETF. Later fund houses such as Franklin Templeton and DSP BlackRock launched fund of funds while ICICI Prudential unveiled their ICICI Prudential US Bluechip Equity which is an actively managed fund. In the past one year the US dedicated have given returns anywhere between 30-36 percent in the last one year. Currently total corpus of US based funds is nearly 420 crore.

 

Despite being a late entrant among the US dedicated funds, JP Morgan AMC espouses confident in the underlying fund with its track record. "As a fund house we know US markets inside out and we are very large player there. One should also look at the track record of the underlying scheme as in the last 12 years of its existence the fund has managed to outperform for 10 years."

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