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Jupiter reveals focus of its strategic bond fund

Jupiter has revealed its new strategic bond fund will focus on investment grade bonds issued by large European/US banks, with around a third of the portfolio held in financials.

The fund, which has a 7 per cent target yield, will be managed by Ariel Bezalel and will focus on high quality financials to take advantage of the current volatility on the credit markets.

Despite the potential earnings risk from slowdown on some of the major economies, Bezalel expects to see “less leverage, tighter regulation and more transparency in this sector” with further possible consolidation following the Bear Stearns/JP Morgan tie-up which could bolster balance sheets and fund perfomance.

At launch, Bezalel intends to have an average BBB credit rating with 60 per cent of the portfolio positioned in investment grade funds and the remaining 40 per cent in high yield corporate bonds, managed on a ‘go anywhere’ basis to benefit from global investment conditions.

Bezalelsays says: “While I intend to take positions in high yield bonds, I will be looking at defensive sectors and credits that are well protected by a large equity cushion.”

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