6th January 2021

Markets ended December higher – with the UK increasing by approximately 3% – primarily due to further encouraging news regarding vaccines.

The following chart shows the US and UK market during December.  The FTSE 100 represents the 100 largest companies in the UK and the S&P 500 represents the 500 largest in the US.  The Dow Jones is often quoted but this only shows the top 30 companies and is dominated by technology companies.

As explained in my recent confirmation regarding the format of monthly newsletters, this month I am focusing on a fund.

J.P. Morgan US Select Fund

This fund is held within our Harmonic Growth Portfolios targeting risk levels 4 to 8 portfolios and represents between 4% and 9% of our portfolios.  We do use the JPM US Equity Income fund within the Pentatonic Income Portfolios, which is from the same fund management company albeit the manager has a different remit and style.

The USA is the largest economy in the World and fuels Global Growth, which is why within most of the growth portfolios, it represents the highest equity exposure and the JPM fund being one of three or four funds used.

J.P. Morgan have operated in in Europe for nearly 200 years and their headquarters for all European, Middle East and African Markets is based in London. They also have offices in Bournemouth, Glasgow, and Edinburgh.

The Bournemouth campus is the largest private sector employer in Dorset. They are also one of the largest technology employers in Scotland where they have over 2000 technology experts looking after JPM’s global operations.

The US Select Fund objective is to invest in a portfolio of North American Securities with the view to produce long term capital growth.

The fund is managed by Scott Davies and Steven Lee both of whom have a long and successful career in portfolio management and global equity research.   They have access to one of the strongest US analyst teams based in the States.

Currently the fund holds £717m in assets spread across various sectors including Semi & Hardware (for example mobile phone and component manufacturers) Media (Such as Amazon) and Financial Services.

Within the fund’s top 10 holdings, equities are held within companies we are all familiar with, for example Microsoft, Amazon, Apple and Mastercard.

The performance of this fund over the last 5 years has been reflective of J.P. Morgan’s expertise in this area producing an annualised 5-year return of 17.23% (at 30th November 2020) which is above the North American Benchmark.

Overall, this is a well performing, well diversified fund which gives the investor exposure to household names such as Amazon and Apple.

The information provided in this report is based on our own opinion and offers no guarantee that expectations will be met.  Past performance is no guide to future results.

As always, should you have any concerns you wish to raise, please do contact us.

Due to the current Covid situation we have closed the office but are still working full time.  We are available via telephone and video so please do contact us on the office number – which will be checked sporadically – or mobiles of 0791 665 2034 for Ian and 0796 459 4210 for Oliver.

Keep safe

Ian Pennicott AFPS

Chartered Financial Planner