A heavy leaning towards both UK and US equities has put the Jupiter Merlin Growth fund’s portfolio in good stead, with the fund continually outstripping its peer group average since late 2014, FE data reveals.
The fund, which holds £1.8bn in assets, invests across several investment management groups, including a fifth of its holdings in the Findlay Park American fund, 12.6 per cent in CF Woodford Equity Income, and 9.7 per cent in Jupiter UK Special Situations.
Fund managers John Chatfeild-Roberts and Algy Smith-Maxwell have retained a strong bias towards shares, with approximately 80 per cent invested in equities.
Of this, a third is allocated to UK equities, a quarter to US shares, almost 15 per cent to European equities, and 6.8 per cent is exposed to Japanese equities.
This strategy appears to have worked well, with the fund delivering returns of 16.6 per cent over three years, against the Investment Association Flexible sector’s return of 10.3 per cent, according to FE figures.
The fund, which has been given four crowns by FE and ranked 20th in the sector, invests in unit trusts, open-ended investment companies (OEICs), exchange-traded funds and other collective investment schemes.
The minimum investment is £500 and the annual charge is 1.5 per cent.
By comparison, the M&G Managed Growth fund – which sits in the same peer group – has seen a fall of 3.8 per cent over three years.
The £777.8m fund, which is ranked 119th in the sector, also has a large equity bias and is similarly spread accross the US, UK, Europe and Japan, but with particular exposure to US equities at 42 per cent.
While the fund is theoretically able to invest in other asset classes, fund managers Randeep Somel and Craig Moran believe equities represent the best opportunities for long-term growth.
Investments in financials are the fund management team’s favourite sectors, comprising a chunky 38 per cent in the portfolio, while industrials make up 13.6 per cent, and consumer goods make up 11 per cent.
Top holdings include the M&G Global Select fund at 16.8 per cent and M&G Global Emerging Markets fund at 10.8 per cent.
The minimum investment is £500 and the annual charge is also 1.5 per cent.
| Jupiter Merlin Growth | M&G Managed Growth |
| 1. Findlay Park American 19.7% | 1. M&G Global Select A Inc 16.8% |
| 2. CF Woodford Equity Income 12.6% | 2. M&G Global Emerging Markets A Inc 11% |
| 3. Jupiter UK Special Situations 9.7% | 3. Source Financials S&P US Select 10.7% |
| 4. Aptus Global Financials 9.7% | 4. Source S&P 500 ETF 9.5% |
| 5. Odey European Focus 8.4% | 5. M&G Japan A Inc 9.4% |
Adviser View
Darius McDermott, managing director at Chelsea Financial Services, said: “I like the Jupiter fund, indeed most of the Merlin range.
“The process is perhaps not as well-defined as its peers, but the team’s experience means they have used the flexibility afforded to them in a cautious and consistent manner.
“The intention is to invest in the optimum blend of asset classes via the right fund managers, and critically, at the right time.
“The team are pragmatic in their approach and are prepared to move quickly if they believe their original analysis was wrong or market conditions have changed.”
“The M&G fund had a change of manager in September last year, when Randeep Somel handed the reins to David Fishwick.
“Performance over those past six months has been improved, although it’s early days yet, and the fund has struggled, really, since 2011.
“It’s a fettered fund of funds, so getting asset allocation right is very important, and it is reliant on the performance of the in-house funds, some of which have struggled in more recent times.
“David has been at M&G for a long time now and will no doubt both steady the ship and bring all his experience to bear on the fund. It seems to be in a safe pair of hands.”
katherine.denham@ft.com