Eaton (pictured), who manages the £74.83m JM Finn Global Opportunities fund, is unconcerned by the slowdown in China and recent grumbling from industry commentators that certain sectors, such as commodities, are being adversely affected by the back-pedalling giant. He says that the rise of the developing world against the West is creating ever-expanding demand that favours established large cap companies controlling the market for goods the East wants to buy.
"We are going through a period like the 40s and 50s when you want to buy those companies that dominate the markets," he said.
"In the 70s and 80s you wanted the competitors of the leading companies because they were stealing their market share, but now we are back in a similar environment to the 50s."
Eaton says that a secular shift is making western markets irrelevant to global growth and he points to the example of L’Oreal, which is opening the world’s largest cosmetics factory in Indonesia.
"I take a top-down view of the world and it seems to us we now live in a single global economy and the one billion westerners now only account for half of the global economy," he commented.
"Half the global economy is made up of aging, demographically troubled countries and half is made up of 6 billion in a better demographic space, their income is going up and causing total demand to rise against total supply."
"Next year the West will make up less than half of the global economy. We are fast becoming an irrelevance."
"From 2002 to 2008 the spending power remained with westerners; we were the only active consumers in the global economy, so there were not any new buyers. This time the developed world is adding to that demand."
The standard performance table for JM Finn Global Opportunities is a good lesson in how misleading the figures can be.
Over five years the fund comes out as a bottom-quartile performer, while it is only in the second quartile over three- and one-year periods.
However, data from FE Analytics shows that the fund has made 132.27 per cent since launch in 2004, more than doubling the average return of the IMA Global sector in that time.
These figures make it the eighth best-performing fund out of 123 through that period.
Performance of fund vs sector since 2004
Source: FE Analytics
The reason for the disparity is the portfolio’s dismal 2008, during which period it lost 47.48 per cent while the average fund in the sector fell 24.32 per cent.
In the only other year the sector finished down since then, 2011, the fund almost doubled the 9.27 per cent losses of the sector. However, Eaton says that his is not just a fund for a bull market.
"People like to accuse it of being a PMI [purchasing manager’s index] fund – when the PMI goes up the fund goes up, but if you look at it closely we have had only two bad periods, one in 2008 and the first six months of 2011."
Data from FE Analytics confirms the fund had a poor first half of 2011, which corresponded to a poor period for the sector as a whole.
Performance of fund vs sector
Source: FE Analytics
Eaton has positioned the portfolio with one-third in the supply chain, one-third in logistics and one-third in aspirational brands.
He explains that these are the areas where he sees a mismatch between the rising demand in the developed world and available supply, causing the industry leaders to have a huge advantage.
This is currently manifesting itself in rising dividends, as the successful companies find themselves with a rising cash-pile they are wary of investing.
"It was yielding 0.7 per cent on the fund at launch but it is now 3.5 per cent. When you take into account currency changes it represents a seven-fold rise on an adjusted basis," Eaton said. "We are not looking for yield but it is coming to us."
Eaton says that while commodities may seem momentarily less attractive, the long-term secular story is constantly throwing up new winners.
"Our positions in healthcare and education have risen hugely with consumer brands along with these, as a consequence of demographics and numbers," he continued.
The fund has a minimum initial investment of £1,000 and a total expense ratio of 1.66 per cent.