JP Morgan Natural Resources

mike88

With the World in recession and confidence low this fund is unlikely to do well over the short term - say for the next 5 years. However as you are saving monthly then that is to your advantage. Eventually the fund will recover and your low cost monthly contributions may well prove to be excellent value.

As your savings horizon is long term I would hang in there. Alternatively keep existing holdings and start investing monthly into an alternative.

JohnRo

mike88 wrote: »

With the World in recession and confidence low this fund is unlikely to do well over the short term - say for the next 5 years. However as you are saving monthly then that is to your advantage. Eventually the fund will recover and your low cost monthly contributions may well prove to be excellent value.

That's how I view JPM natural resources, and some others it has to be said. They're suffering the effects of global factors above and beyond anything the fund management can control and when those factors improve the fund should prosper. If the global economy does improve significantly and this fund doesn't then that's the time for alarm bells to start ringing, at the moment its performance is fairly typical of the sector.

sabretoothtigger

The difference between commodities, cash and bonds is limited supply.
Its not a bad idea to accumulate one but the others not so much

grey_gym_sock

i'm a little surprised at the concept of buying into a fund if you expect it to do badly in the next 5 years. don't know if it will do well or badly over 5 years, but expect it to recover later if it does badly at first? ok. but expect it to do badly? hmmm.

when looking at its historical performance, just remember it's a single sector fund. over any period of (say) 5 or 10 years, there are always going to be some sectors that do extremely well, others that do extremely badly. sometimes that performance will continue over the next few years, sometimes it will reverse. a single sector is riskier than the broader market because it's a more concentrated portfolio. that does not imply that a single sector has higher expected returns; it can't, because the broader market is just the average of all the sectors. there may be good fundamental reasons for believing a sector will outperform, but not just because it's higher risk (like any single sector), or has outperformed over the last few years.

srcandas

grey_gym_sock wrote: »

i'm a little surprised at the concept of buying into a fund if you expect it to do badly in the next 5 years. don't know if it will do well or badly over 5 years, but expect it to recover later if it does badly at first? ok. but expect it to do badly? hmmm.

With you all the way grey. If the recovery is in 5 years then buy in 4.5 years time, not now. In the meantime put the money in cash savings if you have no optimism for any sector. At least you will get something.

But the other thing is this concept that the next five years will be gradual doom and gloom. If you look at the last 5 years my choice in this sector, which I believe is similar to others, you will see two major drops, one gigantic rise. Can't see any reason to suddenly expect 5 years of consistency :beer:

Jegersmart

As stated many many times before, equities prices do not reflect what is happening now - and prices tend to overshoot in both directions. The natural resources sector is one of the most sensitive to economic conditions. The JPM fund has lost 34% in the last year, but it made 96% in 2009 alone. Overall pretty flat performance over 5 years which is why I would look at some graphs and make a stab at entry and possibly exits...personally....

J
p.s. again remember that mining equities and other equities relating to the natural resources sector do not necessariyl correlate well to the price of commodities all the time....

Linton

srcandas wrote: »

With you all the way grey. If the recovery is in 5 years then buy in 4.5 years time, not now. In the meantime put the money in cash savings if you have no optimism for any sector. At least you will get something.

But the other thing is this concept that the next five years will be gradual doom and gloom. If you look at the last 5 years my choice in this sector, which I believe is similar to others, you will see two major drops, one gigantic rise. Can't see any reason to suddenly expect 5 years of consistency :beer:

And if the recovery happens to start early in 4.4 years ? You could easily only get in after a price rise in excess of what you gained from your cash savings - after all you may well not believe that the recovery is the real thing. No, timing the market is a mugs game IMHO.

If you are investing for the long term, you have got to take the view that what happens between now and your long term target date is pretty irrelevant. If you want to invest in JPM Nat Res for the long term the best one can do under current circumstances is to drip feed. If you arent investing for the long term I would suggest that this fund is not the most appropriate.

The_White_Horse

so, what do people think of this fund now? one to keep feeding until the recovery or get rid?

Jegersmart

The_White_Horse wrote: »

so, what do people think of this fund now? one to keep feeding until the recovery or get rid?

I entered a few months ago and am still happy to hold this until May-July as I think commodities prices in general will remain bullish until the summer and it may support these equities a little longer than non-nat res equities. I will probably start to reduce in April unless things change in the meantime.

I should add that I think commodities in general will enter a structural bear market later in the year (for some time) so whilst the equities in these funds are not strictly correlated with commodities prices, I am not going to be a holder longer term - again as things stand now at least.

HTH

J

The_White_Horse

Jegersmart wrote: »

I entered a few months ago and am still happy to hold this until May-July as I think commodities prices in general will remain bullish until the summer and it may support these equities a little longer than non-nat res equities. I will probably start to reduce in April unless things change in the meantime.

I should add that I think commodities in general will enter a structural bear market later in the year (for some time) so whilst the equities in these funds are not strictly correlated with commodities prices, I am not going to be a holder longer term - again as things stand now at least.

HTH
J

so what are you going to go into instead?