A look at the current 1-year return of all funds throws up an interesting chart topper. JPMorgan JF ASEAN Equity Off-shore Fund is one of the best performers with a current return of 27.50%, way ahead of the Sensex or Nifty which both display single digit returns over the same time period.
JPMorgan JF ASEAN Equity Off-shore Fund is a feeder fund that invests in JPMorgan Funds - JF ASEAN Equity Fund. The fund invests in companies of countries which are part of the 10-member ASEAN bloc*. Though the universe gives the fund managers ample flexibility to span across countries, the bulk of the investments are in Singapore, Indonesia, Thailand and Malaysia (September 2012 portfolio).
It is ironical that the region mired in a financial crisis in 1997 has proved itself more resilient to the global gloom. Some media commentaries actually dub it as a safe haven in these tumultuous times. But behind the obvious need for public investment in infrastructure, the consumption theme and good demographics, the nations that comprise this 10-member bloc are a very diverse lot and no generalization is justified.
This fund follows a bottom-up stock picking strategy by first looking at the economic view on a country before scouting for individual stocks. The portfolio is well diversified with the top 10 holdings comprising 30% of the portfolio. The sector exposure is just a reflection of this process and has stayed constant over the past few months (Financials, Industrials, Consumer Discretionary).
This fund has the capability of providing a diversified tilt to your portfolio. But, on a closing note, do remember that there is the currency risk to contend with when investing in international funds. Though your investment is in rupee terms, it would have been converted into foreign currency. It will then need to be re-converted into rupees when you sell your units. If the rupee appreciates when you do so, you would lose out. Over the long term, if the fund continues to deliver well, that negative impact would be nullified to some extent.
* Association of South East Asian Nations (ASEAN): The Philippines, Indonesia, Thailand, Malaysia, Vietnam, Singapore, Brunei, Cambodia, Laos and Myanmar