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Fund Profile

JPMorgan Global Core Real Assets 24 January 2024

Disclaimer

This is a non-independent marketing communication commissioned by JP Morgan Asset Management. The report has not been prepared in accordance with legal requirements designed to promote the independence of investment research and is not subject to any prohibition on the dealing ahead of the dissemination of investment research.

Overview
Prospective returns on the real assets sectors JARA invests in have been written up…
Overview

JPMorgan Global Core Real Assets (JARA) uses an innovative structure to invest in a vast portfolio of real assets spread across the world, all with the aim of providing resilient income and growth. The strategy invests in core assets, meaning those which are of high quality and expected to be relatively stable in value and defensive.

JARA is managed by JPMorgan’s Alternative Solutions Group, and they invest in a number of private, open-ended funds run by internal teams largely for institutional clients. These core allocations are supplemented by a liquid strategy which is invested across REITs, infrastructure- and transport-related listed equities. With the exception of this liquid strategy, the underlying private funds are subject to lock-ups and large minimums so JARA offers access to these strategies to the ordinary investor.

JARA’s NAV has proven relatively resilient over the past few years as the global economy has been rocked by a number of events, as we discuss under Performance. However, it has not been immune from the sell-off in asset prices seen over the past year as interest rate hikes bite. That said, NAV losses have been limited and income generation has remained solid, while the long-term return outlook for real assets now looks particularly attractive after a sell-off, according to JPM’s long-term capital market assumptions for 2024.

The shares now trade on a significant Discount to NAV of 27% after a period in which discounts have widened across the investment trust space. This could arguably add to the attractions for an investor looking now, particularly given the ongoing buyback programme and the continuation vote due next year.

Kepler View

JARA is a unique proposition, which we think could be an excellent sole investment in real assets for an otherwise diversified portfolio. The structure allows the NAV to be exposed to a vast number of over 1,000 individual assets focused in the faster-growing economies of Asia and in the US. Exposure to specific transportation assets, to specific types of infrastructure and to some segments of the real estate market – such as Asian logistics or US residential – is otherwise hard to find, and the overall proposition is a deeply diversified portfolio which we think potentially adds something to a long-term investor’s portfolio.

Despite the diversification, JARA has not been immune to the effects of a period in which interest rates have risen substantially in many key geographies around the world, and this is likely the reason behind the current discount to NAV. We cannot be sure that further falls to asset values will not be booked, particularly in US commercial real estate which is currently under pressure in specific sectors. However, it is striking that the long-term return prospects from real assets have seen the largest mark-up over the past year by JPM’s strategists. Given the potential good entry point at the portfolio level and the wide discount at the share price level, we think an allocation now may reward the brave in the long term.

Bull

  • JARA offers access to a huge global platform of alternatives, usually restricted to institutions
  • Real assets typically offer low correlation to equities or bonds
  • Attractive dividend from diversifying sources

Bear

  • Asset values could see declines if key interest rates remain higher for longer
  • Although dollar exposure has fallen, JARA is still heavily exposed to that currency
  • Underlying holdings are illiquid, as are the investments in most constituent funds
Continue to Portfolio

Fund History

24 Jan 2024 Fund Analysis
Prospective returns on the real assets sectors JARA invests in have been written up…
10 May 2023 Flash update: JPMorgan Global Core Real Assets
JARA’s diversification should bring resilience in troubled markets…
15 Dec 2022 Beyond the Rubicon
Our first live event since March 2020 saw three fund managers describing their different perspectives on a vastly-changed investment landscape…
07 Dec 2022 Live sessions today - Live from London
Forgot to register for our Live from London event? Here are the details of today’s line-up of investment companies. Join us with an easy-access link to the presentations...
09 Nov 2022 Flash update: JPMorgan Global Core Real Assets
JARA continues to deliver strong capital and income returns in troubled markets…
31 May 2022 Five alternative trusts for income investors
Slides and audio from our event last week, featuring five trust managers discussing different strategies to deliver income for shareholders in challenging market conditions...
27 May 2022 Slides and Audio: JPMorgan Global Core Real Assets
Download the presentation and listen to the audio from our 'Alternatives for income investors' virtual week from 27 May...
20 Apr 2022 Flash update: JPMorgan Global Core Real Assets
JARA is firing on all cylinders and has recorded strong returns over the past year with the share price discount narrowing as a result…
06 Apr 2022 Private markets: A closer look at the expanding private debt opportunity
We look at the attractions of the private debt market, historically the hunting ground of the institutional investor…
01 Dec 2021 How to protect your portfolio from inflation
We highlight trusts which could appeal in an environment where 'transient' inflation is here to stay...
04 Aug 2021 Fund Analysis
JARA is now fully invested and offers a 4.4% yield from a diversified portfolio…
10 Mar 2021 Spring Conference '21
Audio and presentations from 21 of the UK’s leading investment trust managers…
04 Mar 2021 Slides and Audio: JPMorgan Global Core Real Assets
Download the presentation and listen to the audio from our 'Ideas for your ISA' Spring Conference on 04 March...
20 Nov 2020 Flash update: JPMorgan Global Core Real Assets
JPMorgan 'real asset' trust to issue C-Shares and declares evolution of investment policy…
14 Oct 2020 Fund Analysis
JARA has fully invested initial IPO proceeds which will generate a yield of c. 5%…
05 Jun 2020 Deep impact
Audio and presentations from our conference this week, where fifteen of the world's best fund managers described a profoundly altered investment landscape...
23 Apr 2020 Sucker punch
Two of our analysts debate the merits of equity income and alternative income trusts at this point in time...
23 Oct 2019 Flash update: JPMorgan Global Core Real Assets
JARA showing momentum in the aftermarket following IPO...
16 Oct 2019 Life on Mars: could inflation take us back to the '70s?
We discuss two potential catalysts for inflation - and the assets that could offer a hedge against it...
09 Oct 2019 Bond proxy?
As a replacement or complement for longer duration bonds, listed alternative income funds look an interesting, well… alternative..
31 Jul 2019 Fund Analysis
JARA is a proposed investment company that will aim to generate an attractive income and total return by investing in diverse real assets sectors that are usually only accessible to institutional investors...
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