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September 8, 2013 7:28 am
Fund of funds veteran Tony Lanning is looking to the US stock market to drive the performance of his new JPMorgan Fusion product range.
The five multi-manager funds, which avoid buying individual companies and instead focus on buying other funds, were launched in March to cater for a variety of risk appetites.
The JPMorgan Asset Management (JPMAM) range includes Income, Conservative, Balanced, Growth and Growth Plus, which takes the highest levels of risk.
Mr Lanning, who was once head of multi-manager operations at Gartmore and until recently ran funds at Henderson Global Investors, that group’s new owner, says his initial portfolios are characterised by a focus on US equities.
“The US economy is in rude health. US equities have performed well – we do need earnings growth to come through for companies to move on, but there is no evidence that this won’t happen,” he says.
The Fusion range’s US equity exposure varies from 10 per cent in the lowest-risk Income fund, to 43 per cent in Growth Plus.
Holdings include exchange traded funds that track the S&P 500 and MSCI USA indices of US shares.
The manager has also invested in a number of JPMAM’s funds, such as Clare Hart’s £1.8bn US Equity Income fund, and has additionally bought into the US Large Cap Equities fund from Robeco, the Dutch asset manager.
Mr Lanning is broadly positive about equities on a global basis, though he remains more cautious on Europe and Japan than many of his peers.
In those two regions his Fusion funds are neutrally positioned, compared with the basic strategic asset allocation model set by JPMorgan’s private bank strategists.
“I am very aware that when markets sell off, Europe sells off more, and there are still some bumps along the road,” Mr Lanning says.
“In Europe, we have moved from underweight to neutral. We have not gone overweight yet, but we have gone more cyclical with the holdings we have.”
He admitted that having a lower weighting towards Japan than many of his peers had been “a bit of a headwind” so far in 2013, as the nation’s markets rallied.
He maintains, however, that the Japanese government “still has some work to do”.
Other star names backed by Mr Lanning include Hugh Young’s Aberdeen Asia Pacific fund, which makes up a significant portion of each of the five Fusion funds’ Asian equity exposure, and Liontrust’s Jan Luthman and Stephen Bailey.
The duo’s Liontrust Macro Equity Income fund features in three of Mr Lanning’s funds.
Within fixed income, Ian Spreadbury’s Fidelity Moneybuilder Income fund and Bill Gross’s Pimco Total Return bond fund feature heavily in four of the five portfolios, alongside the JPMorgan Aggregate Bond fund, run by Nick Gartside and Iain Stealey, and Pimco’s UK Corporate Bond fund.
“In fixed income we have a much lower duration – about three years – than most, but we are adding duration a little,” Mr Lanning says.
“It is clear interest rates are going to rise, but not in the next 12 months.
“There is a difference between travelling and arriving. Markets should interpret tapering as a good thing.”
Nick Reeve is a senior reporter at Investment Adviser
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