JP Morgan is to launch a global healthcare Ucits fund underneath its Luxembourg umbrella. The JPM Gl...
JP Morgan is to launch a global healthcare Ucits fund underneath its Luxembourg umbrella.
The JPM Global Healthtech Equity fund, to be run by Andrew Cormi and Shawn Lytle, will have a portfolio of 40 to 70 stocks invested in pharmaceuticals, biotech, medical technology and healthcare services.
Although JP Morgan has not sold a healthcare fund before, the company is not hiring a healthcare team. The new fund is a mirror of a e2.3bn healthcare fund that JP Morgan sub-advises for a German bank. The migration to a Sicav will provide the opportunity for the team to open its fund to the whole of the European market.
Once authorised by the Luxembourg authorities, the fund should become available to both private and institutional investors by the end of July.
It will have a transparent charging structure, costs being measured as a total expense ratio (TER).
There will be three classes of shares. Class 'A' shares will be for investments of $50,000 to $5m and will have a TER of 2%, Class 'B' shares will be from $5m to $10m, with a 1.5% TER. Class 'C' shares will be from $10m upwards and have a TER of 1.3%.
The investment style will be bottom-up stock selection from a global universe, although there will probably be a bias towards the US. Similarly, the fund will be overweight pharmaceuticals by virtue of the relative size of that sector - the biotech sector is worth $300bn, whereas the world pharmaceutical market is worth $15 trillion. The aim of the fund is to outperform the MSCI World Healthcare Index.
Terry Johnson, client adviser at JP Morgan, said: "As investors move out of tech, media and telecoms, this sector presents defensive characteristics. After successive rate hikes, healthcare and pharmaceuticals tend to do well.
"Pharmaceuticals usually run at a 30% to 40% premium to the market but are now closer to 15%. If a return to normal levels occurs, there may be a 15% to 25% performance advantage."
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