Jupiter has launched a UK-domiciled fund with a concentrated, actively managed portfolio of around 30-50 stocks.
The Jupiter Global Value Equity offering is co-managed by head of strategy and value equities Ben Whitmore, and Dermot Murphy, fund manager on the firm’s value equities team.
The fund will look to achieve capital growth over the long term by investing in a portfolio of global companies viewed by the managers to be “undervalued”, meaning their intrinsic value is not reflected in their share price.
Jupiter said the duo have developed a strong reputation for managing value strategies, including the firm’s £1.8bn UK Special Situations fund, which Mr Whitmore took on in November 2006, and the £2.4bn Income Trust, which he has managed since January 2013.
Since Mr Whitmore began managing these funds, both have delivered top-quartile returns, the company added.
Mr Murphy was appointed assistant fund manager on the UK value strategies in April 2016, having supported the strategies as an equities analyst since 2014.
As value investors, Mr Whitmore and Mr Murphy believe the key determinant of a company’s future returns is whether the valuation paid for a security is high or low relative to its long-term history.
Their investment process is focused on identifying lowly valued securities with resilient balance sheets and good businesses in an attempt to capture a value premium.
The team’s global portfolios are run with the same process, philosophy and value style as their UK strategies.
Under Mr Whitmore’s management, the Jupiter UK Special Situations Fund has delivered 156 per cent since 2006, versus the 89 per cent rise of its FTSE All-Share benchmark and the Investment Association (IA) UK All Companies sector average of 91 per cent.
The Jupiter Income Trust has delivered 72.6 per cent under Mr Whitmore’s management, versus the FTSE All-Share’s gain of 54.6 per cent and a 59.8 per cent average return by its IA UK Equity Income peer group.
Provider view
Stephen Pearson, chief investment officer at Jupiter, said: “Ben and Dermot have demonstrated that they can deliver robust returns for clients over the long term. All the work and analysis that goes into the new fund will help inform the process for clients in the team’s fund range and vice versa.
“We believe the new fund will sit neatly alongside the team’s portfolios, offering clients the option of greater diversification while retaining access to Ben and Dermot’s value strategy.”
Adviser view
Darren Cooke, director at Red Circle, said: “Both managers have good track records, albeit with Mr Murphy it is over a very short term, and I think value investing is one area that there is value in active management as opposed to passive funds. A quick search shows a limited number of alternative funds in this space, with a few of those launched in recent years, so it is clearly seen as a potential growth area by fund managers.
“That said, it is a huge field they are picking from to try and find a small number of companies to buy into. Research on that scale is not going to be easy. I’m unlikely to be recommending this to clients, but I will be interested to see the costs and performance data in a year or two’s time.”
Charges
Estimated ongoing charges on the fund are: retail at 1.7 per cent and institutional at 0.95 per cent.
Verdict
Jupiter is trying to tap into an area where perhaps not a lot of players are, so there is a potential for growth. But it might be some time before they are able to win over advisers.
