JPM taps into emerging markets infrastructure

JP Morgan has launched an Emerging Markets Infrastructure fund.

JP Morgan has launched an Emerging Markets Infrastructure fund.

The new fund, soft-launched last week, is an open-ended investment company (Oeic) version of a Sicav, the JPM Emerging Markets Infrastructure Equity fund.

Managed by Leon Eidelman, it aims to capture the growth opportunities created by infrastructure spending within emerging markets.

It will use a bottom-up process with a structured approach and will hold between 80 and 120 stocks.

Factors such as urbanisation and an increasing demand for natural resources are among the key drivers behind the huge spending in infrastructure.

According to JPM, infrastructure spending in emerging markets is expected to reach $21.7 trillion (£11.9 trillion) over the next decade.

The Emerging Markets Infrastructure fund aims to invest in companies positioned to benefit from this spending.

JPM says the money spent on infrastructure in emerging markets will improve power, water, railway, ports and airport networks. This should in turn lead to growth in businesses involved along the supply chain.

The current infrastructure in emerging markets is sufficient for existing needs only, the fund manager says, and does not cater for the development of these countries.

As at July 31, the largest country weighting in a model portfolio of the new fund, was Brazil at 21.5%. The second largest was Russia, at 17%, followed by China at 11%.

In terms of sector, the largest weighting was in energy at 31.9%, followed by 25.6% in materials.

The benchmark for the JPM Emerging Markets Infrastructure fund is an MSCI customised emerging markets infrastructure index.