Outgoing Jupiter fund manager Tony Nutt says now is a “wonderful” time to be investing for income.
Nutt, who announced last week he is retiring from the asset manager in 2014, believes the low growth environment is set to continue in the UK in the future, making income an attractive option.
He says: “I think there is value for investors who are looking for appropriately priced assets, by which I mean assets in the space which are lowly valued, offer good dividend growth and have a sustainable business model. It is a wonderful time to invest in the income area. Would I be putting money in Brazil at the moment? No I would not.”
Nutt, who has been at Jupiter for almost 17 years, manages the £2bn Income Trust and £512m High Income fund. He will pass over management of the flagship Income Trust to Ben Whitmore on 1 January. Whitmore currently manages the UK Special Situations fund.
Philip Matthews will take over as lead manager of the £512m Jupiter High Income fund on 1 July and will remain as deputy manager of the Jupiter Income Trust and manager of the Jupiter Growth & Income Fund. Ariel Bezalel will continue to manage the bond element of the Jupiter High Income fund.
Nutt joined Jupiter in 1996 when the firm launched the High Income fund. He took over as manager of the flagship income trust in 2000, replacing the hugely popular William Littlewood.
Nutt garnered strong IFA support during his time at Jupiter, however, he has had performance issues with both funds in recent times. The £2bn income trust is currently fourth quartile over three years in the Investment Management Association UK Equity Income sector, having returned 17.9 per cent compared to an average return of 26.3 per cent for the sector. The High Income Trust is third quartile over three years in the IMA UK equity and bond income sector, having returned 22.7 per cent compared to a sector average of 23.9 per cent.
Nutt says he has left the his mandates in a very stable condition.
He says: “It is almost too stable at the moment. I almost wish I had been in on the dash for trash in the past few weeks. The Nokia’s and Lonmin’s, which all fell sharply and have now led the market up.
“I do not feel I should apologise for the income mandates at the moment as that is the path I have laid and we will see how good the path will be in the next few years.”
Nutt will continue to manage the Jupiter Dividend & Growth Investment Trust for the time being. He will be supported by Alastair Gunn, who also manages the equity element of the Jupiter Distribution fund.
Nutt says: “I have been thinking about my retirement for the last 10 years. There are a number of things I want to do and I also want to help my colleagues in terms of succession here.
“I am proud of what we have achieved at Jupiter in the past 17 years. The company has grown in strength during the volatile market conditions of the past 12 years. I am looking forward to continuing to work with my colleagues over the coming year and to hand over my funds to Ben and Philip.”