JPMorgan to launch mining commodities fund

JPMorgan Asset Management is planning to launch a commodities fund on 1 February that will invest in companies in and around the mining sector.

The new fund, JPM Global Mining, will be managed by Neil Gregson, who joined the group last year from CQS Asset Management, where he managed billions of dollars in the sector.

Gregson said he thought there was scope for growth from mining stocks despite a strong performance in the last few years.

He said: "While the mining sector has performed strongly in the last two years, there is still good reason for continued allocation to it. In fact, as a team we believe that an exposure to metals, both precious and base, remains one of the most compelling investment opportunities in 2011 and beyond."

He added: "Our investment approach on this fund will see us focusing on companies that can achieve growth of reserves and production, while at the same time identifying undervalued mining assets which will benefit the portfolio. This is a continuation of the existing philosophy and proven stock selection process."

Gregson is part of the highly regarded natural resources team at JPMorgan, which also runs the £2.5bn JPM Natural Resources fund, one of the biggest selling funds of the decade, and advisers have responded warmly to news of the launch.

"The long-term outlook for commodities remains positive and with strong past performance it is no wonder that investors are interested in this sector," said AWD Chase de Vere’s Patrick Connolly.

"There is the potential for high levels of volatility, especially if people are over-exposed or taking too much risk, so if investors are looking to increase their weighting to commodities then it is important to select investment teams that are experienced, well-resourced and proven in this area.

"JPMorgan Asset Management most certainly fits the bill."

Richard Hancock, analyst at Financial Management Bureau, said that there was high demand for precious metals and this fund is one way for investors to access that.

"The sector has captured headlines over the years but coverage has gone down recently, which may indicate potential in the fund. JPMorgan certainly has the skill set and established track record in the area," Hancock said.