View more on these topics

Adviser Fund Index: Jumping Jupiter

As banks helped bring the global economy to its knees, financial stocks have over the past year lost their status as dividend deliverers and some became pariahs of the equity world.

Yet one of the most successful funds in the Adviser Fund Index is Jupiter financial opportunities, which. according to Financial Express, returned 11.37 per cent over the 12 months to April 6. It features in all three AFI portfolios – aggressive, cautious and balanced.

Its fellow specialist financials funds underperformed the specialist sector average drop of -21.04 per cent over the same period. New Star’s global financials fund lost 36.37 per cent, Swip financial lost 39.76 per cent, and JP Morgan global financials lost 45.4 per cent.

James Davies, the investment research manager at Chartwell and an AFI panellist, says the Jupiter vehicle “has barely been an equity fund.” According to Jupiter, financial opportunities held 67.32 per cent in cash at the end of 2008.

Davies says that the fund’s “trustees might take a dim view of all that cash” but says of its manager, Philip Gibbs: “If he has preserved the wealth for his investors, then that is a great job.”

More broadly, given the crisis, how do advisers look at exp- osure to financials when they consider a fund?

According to Mick Gilligan, the head of research at Killik and another panellist, time horizons are crucial. “Managers are moving in and out of bank stocks quickly because they are not out of the woods yet.”

There is “good money to be made if you are trading the banks freely because there has been a lot of volatility,” agrees Sam Sibley, a portfolio manager at Beckett Invest.

Panellists Sibley and Tim Cockerill, the head of research at Rowan, cite Richard Buxton’s Schroder UK alpha plus – which also features in all three AFI indices – as an example of successful short-term trading.

In the three months to April 6, it lost 0.36 per cent against its sector’s 7.43 per cent loss. In an update, Buxton said Barclays and Lloyds had been among the portfolio’s strongest performers since the beginning of March.

According to Sibley, bond managers are looking “selectively” at banks. However, Davies notes cautionary tales such as that of Old Mutual corporate bond, which lost 34.56 per cent over the 12 months to April 6, having “made some bad decisions in terms of bank debt”.

Cockerill notes the sector is far broader than just banking, but adds that “of late, stocks such as Legal & General have had a very difficult time.” In this climate, “A large financials’ exposure suggests a lot of risk.”

Davies argues that financials are an essential part of any portfolio, “Because they are an important part of our econ- omy and you want to benefit from any rally. As long as the fund manager has a good investment rationale, I would cert- ainly consider it.”


BlackRock to run Eastern European Trust

The board of the Eastern European Trust (TEET) has handed the £86.4m mandate to BlackRock, after removing Pictet as the manager last year following a period of underperformance. Agne Zitkute, a fund manager at Pictet, ran the investment trust between March 2004 and May 2008. The mandate was then handed to Peter Jarvis, a TEET […]

Unlocking lending

American insurer Genworth has called on lenders to make use of mortgage insurance to help them increase lending.


News and expert analysis straight to your inbox

Sign up


    Leave a comment


    Why register with Money Marketing ?

    Providing trusted insight for professional advisers.  Since 1985 Money Marketing has helped promote and analyse the financial adviser community in the UK and continues to be the trusted industry brand for independent insight and advice.

    News & analysis delivered directly to your inbox
    Register today to receive our range of news alerts including daily and weekly briefings

    Money Marketing Events
    Be the first to hear about our industry leading conferences, awards, roundtables and more.

    Research and insight
    Take part in and see the results of Money Marketing's flagship investigations into industry trends.

    Have your say
    Only registered users can post comments. As the voice of the adviser community, our content generates robust debate. Sign up today and make your voice heard.

    Register now

    Having problems?

    Contact us on +44 (0)20 7292 3712

    Lines are open Monday to Friday 9:00am -5.00pm