Home > Trading Ideas > Would you invest in JP Morgan Greater China Fund ?

Would you invest in JP Morgan Greater China Fund ?

Tuesday, July 21, 2009 Leave a comment Go to comments

One wonders as to how these asset management companies keep on coming with new ideas. Latest on the block is Greater China Fund by JP Morgan. Looks like they have run out of ideas on Indian equities, so they are turning eastwards. To me this is just naother ploy to attract investor money before July 31.

For those who don’t know, MF entry load is banned after July 31. This means that distributors won’t have any incentives to sell MFs. This might be good for MF advisory business and people might be willing to pay for good professional advice. At the same time this is bad for MFs who won’t be able to sell every crap they launch in the market.So they seem to be in a hurry to raise as much as they can before the deadline.

Also what happenned to these funds in 2008? Same old wine in a new bottle. Most of these funds actually don’t offer any diverisification. Have a look at the 2008 performance of JP Morgan funds in 2008:

JP Morgan India Equity-G :  -55.39% (vs 51.79% for NIFTY

JP Morgan India Smaller Companies-G: -65.95%

I know they might sell this fund on the “diversification” theme but one has to ask if an investor really gets any diversification advantage by investing in international equities. To me most of the global equity returns are correlated. So one needs to look further in order to diversify.

Categories: Trading Ideas
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