Jupiter Asset Management has unveiled an Enhanced Distribution fund that will invest in a range of assets including equities and bonds. The fund aims to target investors seeking regular income following retirement.
Managed by Alastair Gunn and Rhys Petheram, the fund will be run using the same strategy as the group’s existing Distribution and High Income funds.
The managers aim to take investment decisions based on thorough analysis of a company and investing either in that company’s bonds, equity or both thereafter.
A multi-asset fund, it will be flexible in its holdings and initially seeks to hold around 60 per cent in fixed income, such as corporate and government bonds, and the remaining 40 per cent in stocks. Fund managers will consider cash holdings when appropriate.
The managers aim to deliver an estimated yield of around 4 per cent and the income will be paid on a monthly basis. The fund will sit within the Investment Association (IA)’s Mixed Investment 20-60% Shares sector.
A fully actively managed fund, it works on the principle of diversification and believes the risk is spread across three asset classes in order to generate a stable income. The minimum investment for the fund is £500, and there is a 1.52 per cent ongoing charge.
www.jupiteram.com
Comment:
While there is a huge range of multi-asset funds in the market, adding one more to the list may not necessarily be a bad thing. It can give further choice and flexibility to investors.
It is also a positive that the managers have years of experience in managing two other funds that use the same strategy and have had successful returns. For example, the Distribution fund has returned 40.9 per cent (7.1 per cent annualised)over five years to the end of July against an average sector return of 24.9 per cent.
All three funds sit within the Mixed Investment 20-60% Shares sector and can have a significant overlap between holdings across Jupiter’s other funds.
While the fund has a strong diversification measure, there are risks attached. Events like market and exchange rate movements can cause the value to go both ways. And with events like a rate hike expected from the Fed in the coming months, investors need to be cautious with global exposure.
FUND FACTS:
• Invests in range of assets
• Decisions based on thorough company analysis
• Aims to deliver an estimated yield of 4 per cent
• Managers have experience managing similar funds
• Sits within IA’s Mixed Investment 20-60 per cent shares sector
