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‘Fund selection is key rather than allocation’

Individual fund selection rather than asset allocation is the driver for returns in the current economic climate, according to Jupiter’s multi-manager team.

With no major moves in the stockmarket, Jupiter believes the themes it identified at the start of the year, such as natural resources, are still in place. In the current environment it expects the best returns to come from managers who think differently to the rest of the pack.

One example is Morant Wright Management’s CF Morant Wright Japan fund, which Jupiter says has performed well despite the uninspiring performance of the Japanese market. Buying natural resources funds has also contributed to Jupiter’s returns this year. Jupiter head of independent funds John Chatfeild-Roberts says: “Our fund sel- ection has made a bigger contribution to our returns this year than asset allocation. This is a completely different situation to 2003, when asset allocation had a bigger influence on returns.

“In 2003, we made two major asset allocation dec- isions, both of which had a very positive impact on returns. This year, we have not needed to make these kind of funda- mental decisions as equity markets have not been as volatile and the themes we favoured at the start of the year remain in place today. Instead, finding fund managers that are prepared to think outside the box has been crucial.”

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