Jupiter’s £30bn assets ‘modestly ahead’ of expectations

Jupiter Fund Management has reported a rise in its assets under management to almost £30bn in its latest market update which brokers said was “modestly ahead of estimates”.

The group saw net mutual fund inflows of £278m during the third quarter, according to its interim management statement.

But outflows from its mutual funds have remained stubbornly above the £1bn mark. Gross outflows had been below £1bn for much of 2012 but they have remained above the £1bn mark for all of 2013 so far. Gross outflows from its mutual funds were above £1.3bn in Q1 and Q2 this year while the Q3 level was more than £1.2bn.

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The group said inflows were spread across fixed income fund such as Ariel Bezalel’s Strategic Bond and Dynamic Bond while its UK Special Situations, run by Ben Whitmore, and European fund, run by Alexander Darwall, were also picked out as gaining traction with investors.

A broker note from Numis said the update was positive overall.

“Funds under management at £29.9bn was 0.6 per cent ahead of our £29.7bn estimate, driven by better than expected net mutual fund flows (£278m versus our estimate of £43m) and partially offset by slightly weaker performance (£573m versus our estimate £634m).

“Flows in the period were mainly seen in fixed income, UK Special Situations and European funds, more than offsetting outflows in absolute return.”

A note from RBC Capital Markets added that “today’s statement gives us confidence that our full-year forecasts, which are inline with consensus, remain achievable” while JPMorgan Cazenove said the rise in assets under management was “fractionally ahead of our estimate”.

RBC added while the group’s investment performance was “slightly disappointing” in comparison with the FTSE 100 and FTSE All-Share indexes it thought its full year forecasts for Jupiter “remains achievable”.

The group’s £9.2bn Merlin range, headed by chief investment officer John Chatfeild-Roberts was not mentioned in the trading update.

Mr Chatfeild-Roberts told Investment Adviser last month that an overweight to emerging markets – particularly in Asia and Latin America – had worked against the funds’s short term performance.

He added that the funds also had low exposure to the UK, which had “surprised with good cyclical performance” and that a higher dollar exposure than peers and a high gold weighting had also hurt his returns.

Speaking about the latest trading update, Edward Bonham Carter, chief executive, said: “Our broadened distribution presence, diverse product range and strong investment performance enabled us to deliver net mutual fund inflows of £278m in the quarter.

“These steady inflows helped Jupiter’s AUM increase to £29.9bn at 30 September 2013.”

The statement added the company would continue to build out relationships with with key distributors on a global basis meaning it was “confident we can continue to deliver profitable growth at attractive margins and, within our sustainable balance sheet structure, to share the rewards of this growth with our investors”.