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Product Matters – new ISA fund launches

The Isa season has kicked off and the number of fund launches is increasing steadily. There is no particular theme this season and the launches span aggessive growth, fixed interest and equity income.

So it is no easy task for marketing types to come up with a sure-fire way of raking in investors&#39 cash. The only real thirst investors have is for income, which is not surprising against the background of pitiful deposit returns.

Jupiter&#39s new distribution fund is an interesting launch although you might think it is as dull as dishwater. There will be no fireworks and many will find it hard to get excited about. But therein lies the point – it is not supposed to excite.

The fund will be in the cautious managed sector and has an approximate split of 65 per cent in corporate bonds and 35 per cent in equities. Jupiter anticipates an Isa yield of 5 per cent annually, which is attractive compared with the very best deposits or cash Isas.

John Hamilton will manage the corporate bond element, which will be invested 90 per cent at BBB+ or above and 10 per cent in the lower-risk end of high yield. The anticipated yield is 6.3 per cent gross.

Tony Nutt will manage the equity portfolio, aiming to achieve a yield of between 4.25 and 4.5 per cent.

Jupiter is very keen to manage investors&#39 expectations in terms of future returns and this fund certainly does not have an ounce of hype about it. I agree with Jupiter that, as an industry, we have a duty to make sure investors do not expect double-digit returns in future.

Thumbs up to Jupiter for its responsible approach.

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