The JPMorgan Mutual Fund House is launching their JPMorgan JF ASEAN Equity Off-shore Fund. Interestingly, this is not the first off-shore fund launched by JP Morgan. In the past as well, they have launched other country specific funds (like JPMorgan JF Greater China Equity Off-shore Fund and JPMorgan India Alpha Fund)
In this article, we will analyze how good is this JPMorgan JF ASEAN Equity Off-shore Fund NFO, whether this JPMorgan JF ASEAN Equity Off-shore Fund offers anything new or unique for the investors and whether the investors should invest in JPMorgan JF ASEAN Equity Off-shore Fund.
JPMorgan JF ASEAN Equity Off-shore Fund NFO: Review Analysis & Details
Let's begin with some basic details about JPMorgan JF ASEAN Equity Off-shore Fund.What are the NFO dates for JPMorgan JF ASEAN Equity Off-shore Fund?
The NFO period for JPMorgan JF ASEAN Equity Off-shore Fund is from 10 June 2011 and will close on 24 June 2011. After the NFO period, the regular buying and selling of fund units will start from 5th July 2011.
What is so unique about this JPMorgan JF ASEAN Equity Off-shore Fund?
First things first - it's an offshore fund, basically a Fund of Funds (What's this?). In this particular case, this JF ASEAN Equity Off-shore Fund will collect money from investors, and then invest in an foreign fund called JPMorgan Funds - JF ASEAN Equity Fund, by purchasing the units of that fund. So ultimately, your money will reach the JPMorgan Funds - JF ASEAN Equity Fund (end-fund).
What this end-fund will do is invest that money in stocks/shares of compnaies which belong to ASEAN countries i.e. members of the Association of South East Asian Nations (ASEAN). There are around 10 member countries of ASEAN group - Combodia, Malaysia, Indonesia, Vietnam, Thailand, etc.
So this becomes a regional fund investment, and will be a good option for investors who wish to bet their money on the companies of countries from the ASEAN region.
Don't like ASEAN country investments, but want to go west? Then there is the Brazil focussed fund called the HSBC Brazil Fund-HBF, from HSBC.
The asset allocation for JPMorgan JF ASEAN Equity Off-shore Fund will be as follows:
80% to 100% will be invested in the units of the end-fund, i.e. JPMorgan Funds - JF ASEAN Equity Fund
Rest 0-20% will be in debt and money market instruments for unit redemption and creation purposes.
What are the other competitor products available in comparison to JPMorgan JF ASEAN Equity Off-shore Fund?
As mentioned above, there are lots of other country specific funds available in the market which are similar to this JPMorgan JF ASEAN Equity Off-shore Fund - the only difference in that they focus on different countries - China, Brazil, ASEAN, etc. There is another unique fund which offers a mix of both China and India, called the Mirae India-China Consumption Fund. So as an investor, you have a lot of choice specific to countries.
The JPMorgan JF ASEAN Equity Off-shore Fund will track the benchmark Morgan Stanley Capital International (MSCI) South East Asia Index (Total Return Net) for tracking its performance.
What are the risks of investing and trading JPMorgan JF ASEAN Equity Off-shore Fund?
To repeat again, its a fund of funds. So ultimately the performance depends upon the end fund and how that fund manager plays around with your money.
Then, there is a big currency risk. Remember, this fund will invest in companies of 10 different ASEAN countries, which trade in differnt currencies. Hence, you will have to take the currency risk. What if the end fund gives a faboulous return of 50% in its own currency, but because of currency fluctuations, the net returns you get go down substantially.
Then, also note that only 80% to 100% will be invested in the end fund, rest 0 to 20% will be kept in debt instruments. So not all of your money will acctually get invested.
Final Thoughts about JPMorgan JF ASEAN Equity Off-shore Fund?
A good option for investors who are interested in overseas destinations like ASEAN and other countries. If you trust the fund managers of JP Morgan, and believe the ASEAN country companies will generate good returns, and you will not get hit by the fores rates fluctuations, this is the fund for you.
See List of All Mutual Fund and NFO Articles here
During NFO period each unit cost Rs. 10 per unit plus the premium, during NFO period
Minimum investment Rs 5,000 and in multiples of Re 1 afterwards.
No tax benefit will be available in JPMorgan JF ASEAN Equity Off-shore Fund
Mr. Namdev Chougule will be the fund manager for JPMorgan JF ASEAN Equity Off-shore Fund.
Only Growth Option is available in JPMorgan JF ASEAN Equity Off-shore Fund
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