Absolute Return  

Jupiter inflows gather momentum in Q2

Jupiter inflows gather momentum in Q2

Jupiter secured net inflows of £2.2bn in the second quarter of 2017, with James Clunie's Absolute Return and Avinash Vazirani's India funds singled out for praise.

The second quarter showing adds to £1.4bn of net inflows in the first quarter taking the firm's first half net sales to £3.6bn, 94 per cent of which went to its mutual funds business.

This is far above the £0.6bn seen in the same period in 2016, and the £1bn seen over the whole of last year, as the firm joins its peers in enjoying a significantly better environment in 2017.

The first half inflows added to market returns to bring the firm's assets under management (AUM) to £47bn at the end of June. This is 16 per cent higher than the start of the year and 27 per cent higher than 12 months ago.

The firm's chief executive Maarten Slendebroek said the direction of mutual fund inflows in the second quarter matched that of the first, with strong demand for its fixed income, absolute return and emerging market strategies.

"With the Jupiter Absolute Return and Jupiter India [funds] having attracted significant assets in the first half, 12 of our mutual funds are now over £1bn in size, accounting for £33.4bn of our AUM," Mr Slendebroek added.

The increase in inflows and AUM provided a foundation for rising profits at the firm. Management fee revenue hit £187m in the six months, compared with £157m for the same period in 2016. A similar outcome in the second half could see Jupiter easily surpass its 2016 management fee revenue of £330m. Overall profits were £94m, 8.4 per cent higher than last year.

However, Jupiter said its overall net management fee margin dropped over the six months as a result of inflows into its lower-margin fixed income products.

The firm, which already announced it would stop taking risk-free box profits from next year, said this accounted for £7.2m over the six months. The practice was heavily criticised by the FCA in its asset management market study, with it consulting on outlawing the practice.

Mr Slendebroek added: "The FCA published its final report on the asset management industry at the end of June and has made a number of proposals, including remedies to enhance governance and disclosure of fund objectives and charges.

"We welcome these developments and await further details from the FCA once its consultation period is completed."