Aim: Growth by investing globally in equities, bonds, convertible bonds, currencies, money market securities and cash, taking long positions and short positions through derivatives
Minimum investment: Lump sum £1,000, $1,000, euro 1,000
Investment split: 100% in equities, bonds, convertible bonds, currencies, money market securities, cash and derivatives
Place of registration: Luxemburg
Charges: Initial 5%, annual 1.25%, performance fee 10%
Commission: Initial up to 5%, renewal 0.5%
Tel: 020 7412 0703
The Jupiter strategic total return fund is a Ucits III compliant Luxemburg Sicav. It aims to generate positive long-term returns across various market conditions from an actively managed global portfolio of asset classes, including equities, bonds, convertible bonds, currencies and money market securities.
Fund managers Miles Geldard and Lee Manzi have worked together for 12 years. They previously worked for RWC Partners, formerly MPC Investors and prior to that at Flemings, which became JPMorgan Asset Management.
Putting the fund in to its market context, Chelsea Financial Services head of research Juliet Schooling Latter says: “Absolute return funds are cropping up wherever you look these days. The question of whether this is in response to investor demand or whether providers are jumping on the bandwagon, with one eye on a performance fee, remains to be answered. In essence, one can only applaud the proliferation of investment funds that aim to produce a positive return in an upward market and protect those gains when markets fall. “ However, she wonders whether the Jupiter strategic total return fund, the latest new entrant in the absolute return field, can fulfil that promise.
“There is no doubt that diversification is important in an investor’s portfolio and this fund offers global and asset class diversification. It invests across equities, bonds, convertible bonds, currencies and money market securities, with Jupiter’s macroeconomic analysis driving asset allocation,” says Schooling Latter. She adds that the fund has the ability to take short positions through derivatives, which will hopefully protect any gains in a downward market.
Assessing the charges, Schooling Latter says: “The very respectable 1.25 per cent annual management charge is marred somewhat by the performance fee. Admittedly, the performance fee is only 10 per cent but it is the benchmark that it has to beat that annoys me. For the sterling share class the benchmark is 1 month Libor.”
The performance fee is viewed by Schooling Latter as one of the less attractive features of the fund. She looked up the current rate for 1 month Libor and found that it stands at 0.26 per cent. “It worries me that to achieve a performance fee, a fund only has to produce a return of one tenth that of my savings account,” she says.
In Schooling Latter’s view, Jupiter fund managers Lee Manzi and Miles Geldard have considerable experience and strong track records. Their focus on risk management is reassuring.” She feels the fund looks suitable for a lower-risk investor or investora who want to reduce the overall level of risk in their portfolios.
Summing up Schooling Latter says: “I will watch the progress of this fund with interest. I think only time will tell if the managers can deliver the holy grail of producing positive long-term returns throughout all market conditions.”
Suitability to market: Good
Investment strategy: Good