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Please note that tax, investment, pension and ISA rules can change and the information and any views contained in this article may now be inaccurate.
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Please note that tax, investment, pension and ISA rules can change and the information and any views contained in this article may now be inaccurate.
JP Morgan Global Core Real Assets (JARA)
104.5p
Gain to date: 28.6%
We recommended buying JP Morgan Global Core Real Assets (JARA) in July 2021, noting that the shares were trading on a 12 month low and a 8% discount to net asset value.
This looked interesting given the shares had traded at a premium to net asset value of 15% at the beginning of 2021 and the fund also offered investors a degree of inflation protection given its exposure to real assets.
WHAT’S HAPPENED SINCE WE SAID TO BUY?
The share price has risen by 28.6% since our initial buy recommendation and the discount to net asset value has narrowed from 8% to 1.86%.
The trust has been a natural beneficiary of the recent surge in inflation.
This is due to the trust’s asset exposure that is split between real estate, infrastructure and transportation.
Speaking with Shares Philip Waller manager of the fund emphasised that inflation was relatively positive for core real assets given their ability to increase income earned over time in-line with inflation.
‘Power and energy contracts, for example, are invariably long term in nature, with an element of inflation protection built in,’ he said.
The fund has also benefited from dollar strength given that it has a 64% US dollar exposure and 53% of its assets are based in North America.
WHAT SHOULD INVESTORS DO NEXT?
Keep buying the shares.
The fund offers investors access to a pool of global real assets that are uncorrelated with equities and bonds.
It therefore offers a unique ability to offer diversification at a time when the traditional 60% shares 40% bonds portfolio model is looking broken.
The fund has a target return of 7% to 9%, with between 4% and 6% of this total return coming from income.
Looking forward Waller highlights that the fund is particularly interested in renewable and liquefied natural gas markets and will benefit from higher energy prices and Europe having a greater focus on energy independence.
These articles are provided by Shares magazine which is published by AJ Bell Media, a part of AJ Bell. Shares is not written by AJ Bell.
Shares is provided for your general information and use and is not a personal recommendation to invest. It is not intended to be relied upon by you in making or not making any investment decisions. The investments referred to in these articles will not be suitable for all investors. If in doubt please seek appropriate independent financial advice.
Investors acting on the information in these articles do so at their own risk and AJ Bell Media and its staff do not accept liability for losses suffered by investors as a result of their investment decisions.
The value of your investments can go down as well as up and you may get back less than you originally invested. We don't offer advice, so it's important you understand the risks, if you're unsure please consult a suitably qualified financial adviser. Tax treatment depends on your individual circumstances and rules may change. Past performance is not a guide to future performance and some investments need to be held for the long term.