View more on these topics

Jupiter’s Merlin team cuts bond weightings

John Chatfeild Roberts 480

The Jupiter Merlin multi-manager team is slowly bringing its bond weightings down to the “absolute minimum” and increasing exposure to equities as they
make a better inflation hedge than bonds.

Jupiter multi-managers Algy Smith-Maxwell and Peter Lawery say the real rise in the cost of living is even higher than CPI and RPI rates. As a result, even index-linked bonds cannot protect against inflation.

Lawery says: “The problem with index-linked is it has its inflation protected against the official measure of inflation. Does index-linked protect your capital and income against the real cost of living, which I think is much higher than CPI and RPI currently have you believe it is? Obviously it does not protect you against that.

“We are just letting the bond weighting come down to its absolute minimum and getting the equity weighting up to its maximum over time. It has not been an explicit sell of a huge amount of bonds.”

The Jupiter Merlin multi-manager team runs over £9bn across its five portfolios. According to the April factsheets, the £4.7bn Merlin Income fund currently has 34.5 per cent of its exposure in fixed income while the £1.6bn Merlin Balanced and £18m Merlin Conservative portfolios have fixed income exposures of 13.6 and 59.1 per cent respectively.

Smith-Maxwell does stress that some bonds are “better placed” against the economic climate. However, he points out that bonds are returning a negative real yield and also describes cash as a “terrible place to be” when looking at real yields excluding CPI.

Recommended

Govt could face big losses on Help to Buy, MPs warn

<!– <!– <!– <!– –> –> –> –> The Treasury select committee has slammed the Government’s Help to Buy mortgage indemnity guarantee, warning it could cause taxpayers significant losses and may not help first-time buyers or boost house building. The TSC’s Budget 2013 report, published last week, expressed concern that the Treasury will have an […]

MPs call for Lloyds/RBS ‘good’ and ‘bad’ banks

<!– <!– <!– <!– –> –> –> –> The Treasury select committee has called on the Government to investigate the pros and cons of breaking up Lloyds Banking Group and Royal Bank of Scotland and to publish an analysis by June. In its Budget 2013 report, the TSC said it wants to see an analysis […]

1

Govt risks missing target to pay Equitable Life policyholders

The Government is in danger of missing its March 2014 target to pay all traceable policyholders who lost out following the collapse of Equitable Life. A National Audit Office report, “Administering the Equitable Life Payment Scheme”, says although the Treasury had to set up a payment scheme in a short space of time, not enough […]

Inheritance tax and estate planning – exemptions and reliefs

By Kim Jarvis, technical manager with Canada Life’s ican Technical Services Team In this article we look at the main exemptions and reliefs that are available on death. Within the article, spouse also means civil partner.   Nil-rate band Under current rules, any part of the estate that falls within the available nil-rate band (NRB), […]

Newsletter

News and expert analysis straight to your inbox

Sign up

Comments

    Leave a comment