US giant JP Morgan has unveiled the first thematic multi-asset fund in Hong Kong, according to the firm.
The JPMorgan Future Transition Multi-Asset Fund is a global diversified portfolio focusing on trends shaping the future.
The newly launched fund from JPMorgan Asset Management (JPMAM) has exposure to five future transition themes which the firm believes are shaping society’s transition to a better future.
They include: smart cities; autonomous vehicles; digital education; medical technology; and social and environmental development.
“Advances in technologies such as artificial intelligence, robotics and the internet of things are accelerating efficiencies in urban policy and paving the way for transformative changes to every aspect of our lives, making the future world more intelligent, communicative and connected,” Leon Goldfeld, portfolio manager of the fund, told our sister publication Fund Selector Asia.
The asset manager also sees a collaborative, multi-stakeholder process across governments, businesses and individuals supporting these transition themes.
Finding the right balance
The strategic asset allocation of the fund is 65% equity and 35% fixed income. “At the start of the fund launch, we expect to invest a slightly higher exposure to equity, which reflects our positive outlook on the global economy and a preference for risk assets,” Goldfeld explained.
Within the equity portion, the largest sectors are healthcare and information technology, followed by consumer discretionary, industrial and communication services, which lie in themes such as autonomous vehicles, smart cities, medical technology and digital education.
JPMAM also uses ThemeBot, a natural language processing tool that combines big data research and artificial intelligence to help select equities with the most relevant exposure to future transition themes.
“ThemeBot’s ability to screen thousands of stocks and efficiently analyse hundreds of millions of data sources in a short period of time enhances our portfolio construction and our investment decision making, enabling us to better focus on these secular investment themes,” added Goldfeld.
While the fund has a biased exposure towards equity to capture a longer term growth opportunity associated with the themes, there is also a fixed income allocation in the portfolio. This is to help diversify the risks and keep the fund within the moderate risk category, the firm said.
The fixed income portion is focused on the social and environmental development theme, with exposure to sustainable fixed income funds from JPMorgan and green bond ETFs.
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