Jupiter  

Majority of Jupiter funds provide value

Majority of Jupiter funds provide value

Jupiter Asset Management has found almost 84 per cent of classes in its funds have demonstrated value for investors in the past year.

In its annual value assessment report, released today (July 30), the firm said 14.6 per cent had demonstrated value but not consistently, and the remaining 1.6 per cent had “not demonstrated value”.

The worst performing fund was the Jupiter Absolute Return Fund, which aims to provide a positive absolute return, net of fees, higher than LIBOR GBP 3-month, or the future index SONIA.

The fund did not achieve this, with Jupiter saying the key driver of underperformance was “the equity market environment did not favour the style employed by the previous manager”.

Jupiter has already appointed a new manager to the fund, and said following this it believes the fund will “once again be well placed to deliver strong investment performance for investors in the future”.

Other funds highlighted as having inconsistent value for investors included the Jupiter European Special Situations Fund, the Jupiter Distribution and Growth Fund, and the UK Growth Fund.

Andrew Formica, chief executive, said the firm did not underestimate the trust its clients had put in the group. 

“As the world works to find a way out of the pandemic, our clients will inevitably continue to face a degree of uncertainty. Over the past year we have done our best to find new and innovative ways of demonstrating our commitment to our clients,” he said.

In Jupiter’s inaugural value assessment last year, it said that it had closed three funds after finding the interests of its investors could be "more effectively" served by other products. 

Two of the funds, Jupiter Enhanced Distribution and Jupiter UK Alpha, closed in July last year after Jupiter Strategic Reserve was shut in May 2019. 

As part of the Financial Conduct Authority’s asset management review, fund houses are now required to carry out an annual assessment of whether the firm provides value for their clients.

The value rules — which have been in effect since the start of 2020 — require asset managers to look at their performance, costs, economies of scale, comparable market rates, services and share classes.

In July the FCA warned fund managers it will take action after a review found most have not implemented value assessments that met FCA standards.

The FCA conducted a review of 18 fund managers of different business models and sizes between July 2020 and May 2021 and found while some had been conducting value assessments well, “too many AFMs often made assumptions that they could not justify to us”, undermining the credibility of their assessments.

sally.hickey@ft.com