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S&P cuts Jupiter income’s AAA rating

Anthony Nutt’s £2 billion Jupiter income trust has lost its Standard & Poor’s AAA rating because of poor performance over the last five years.

The ratings agency’s review of the fund acknowledged Nutt’s “experience, investment horizon and prior track record” but lowered its rating to AA after saying recent performance has been disappointing.

“Nutt’s longer-term track record is strong and up until 2006 the fund comfortably outpaced our peer median in each full calendar year since he assumed control. Subsequent returns, however, have been some way below that high standard,” S&P’s report says.

“The fund’s performance since 2006 is below what we would expect from an AAA-rated product, so the rating falls by one band.”

The Jupiter Income trust has made a loss of 10.1 per cent over the last five years compared with a 4 per cent gain in its benchmark, according to its most recent factsheet.

Last month, S&P lowered the rating of Nutt’s £523m Jupiter high income fund from AAA to AA, also citing the portfolio’s “disappointing” performance in the years since 2006.

October also saw Bestinvest downgrade Nutt’s Jupiter income and high income funds to a one-star rating after saying it has “higher conviction in other managers within the peer group”.

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Comments

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  1. I am very puzzled! I have always admired Anthony Nutt and have over the years supported his Income fund. But, as is mentioned, since 2006, it is quite a poor performer.

    So, how after 5 years of underperformance, can it still be rated AA?

    In other words, does 5 years of underperformance equal the loss of one A rating. If so, will it take 15 years of underperformance to lose all 3 A’s?

    Just a thought.

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