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Nutt takes own flight path at Jupiter

The new manager of Jupiter&#39s income fund aims to put the waning star back

in stellar company

Tony Nutt denies there has been a rush of redemptions and is bemused by

media suggestions that the fund will be aff- ected by the recent departure

of chiefexecutive and founder John Duffield.

He says: “Whether John is here makes no difference to how I or my

colleagues run our funds. John never had any influence on how we managed

our portfolios. In terms of the profitability of the Jupiter International

Group, he wasa very material component but not really in terms of running

the funds.”

Having worked alongside Littlewood for the past five years, Nutt has a

good knowledge of the portfolio and the rationale but he is not on a

mission to turn himself into a new Littlewood.

Nutt admits there have been a few changes because his investment style

differs from Littlewood&#39s but he says these will be minimal.

He says: “We do not feel, given the in-house investment policies, that

this needs radical restructuring. William was a far more active trader than

I am. I am very comfortable trading the markets when I think it is suitable

but William tended to be a more consistent trader, which is not really my

style. We have both got our returns from backing our judgement.”

The main change Nutt will be making is to reduce the number of stocks in

the portfolio. Littlewood&#39s active trading style saw the fund holding

hundreds of stocks.

He says: “William had more than 200 stocks in the portfolio and he had a

rather active portfolio at the bottom, where he was taking opportunities on

a regular basis. I have gone from 205 stocks to about 180 and I will lose

another 30 of those.

“I have also now taken out the US treasury position. William had 10 per

cent-plus in US treasuries – all hedged so there was not a currency issue –

and I have taken that out because interest rates look like they are going

to move up further in the US than we had anticipated.”

IFAs remain split into three categories. Best Investment deputy managing

director Jason Hollands leads the brigade of sceptics and is quite possibly

Jupiter&#39s least favourite person this month after appearing in almost every

trade and national paper with advice to abandon ship.

The middle ground is filled by IFAs such as Premier and Plan Invest which

are advising selected selling of Jupiter funds such as the income fund.

The pro-Jupiter camp includes Hargreaves Lansdown, which is so concerned

over what it sees as churningthat it has produced a two-page report on the

income fund and why investors should not panic.

With many IFAs taking commission of up to 3 per cent on switches, there is

undoubtedly a commercial incentive to advise selling. Hargreaves also

points out that most groups pay 0.5 per cent renewal commission whereas

Jupiter does not.

The income fund has had a bad year – ironically, much of which was due to

decisions made by Littlewood. But it remains number one in its sector over

10 years and has started to make a recovery in the past three months.

Last week, Standard & Poor&#39s downgraded the fund from an AAA rating to AA

but this is almost certainly a reflection of Littlewood&#39s departure rather

than Duffield&#39s.

S&P often, but not always, downgrades funds following a change in fund

manager. It would have been a useful boost for S&P to have shown confidence

in Nutt and maintained the rating.

But Nutt remains confident in the fund and his ability to manage it. The

problem now is to repair the damage done by the negative publicity.


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