New Jupiter Merlin fund targets risk-averse investors
The group’s CIO John Chatfeild-Roberts says it launched the Conservative fund in response to demands from its clients for a lower-risk multi-manager product.
By Joshua Ausden, News Editor, FE Trustnet
Tuesday September 18, 2012
Jupiter is expanding its Jupiter Merlin range with the launch of the Conservative fund – available to investors from 28 September 2012.
The fund, which will sit in the IMA Mixed Investment 0-35% Shares sector, will be the least risky of the five Merlin products, and will also be the cheapest, with a total expense ratio (TER) of just under 2 per cent.
, chief investment officer at Jupiter and co-manager of the Merlin range, says the new product is ideal for investors who are worried about the current macro environment and who may have had their fingers burnt in past crises.
"This fund is for people who are scared of equity markets but still want to retain a little bit of equity exposure," he explained.
"It’s a little bit like getting on the property ladder in that respect – you’ve got to start somewhere."
"It has a maximum equity exposure of 35 per cent and a minimum investment exposure of 45 per cent to investment grade bonds."
"There is no minimum equity exposure, so in theory we could hold nothing in the markets. By and large it’s a hard-currency fund and so will have little non-sterling exposure."
Like all of the other Jupiter Merlin portfolios, the Conservative fund will be headed up by Chatfeild-Roberts and fellow FE Alpha Managers Peter Lawery
and Algy Smith-Maxwell
Jupiter says the launch follows demand from its clients, who have outlined the need for a lower-risk alternative to the existing multi-manager portfolios.
Chatfeild-Roberts says there is a great deal of overlap between the Conservative and other portfolios, but expects the new addition to be significantly less volatile.
"We’re not reinventing the wheel – just some of the balances will be different," he explained. "The Conservative portfolio’s fixed interest exposure is capped at 61 per cent, while in the Income fund it is currently at 31 per cent."
"Many of the holdings will be the same."
Among the funds that go straight into the Conservative portfolio are Neil Woodford’s Invesco Perpetual Income, Jupiter UK Special Situations
, M&G Global Dividend
, Newton Asian Income
, Jupiter Corporate Bond
and Threadneedle Emerging Market Debt
Like all of the Merlin funds, Conservative will have a minimum investment of £500 and a minimum monthly top-up of just £50. With a TER of around 2 per cent, it will be cheaper than all of the other Merlin options, which all fall between the 2.33 to 2.57 per cent range.
Chatfeild-Roberts says the fund’s significant weighting to fixed interest – typically a cheaper area of investment than equities and alternative asset classes – and to in-house products, has allowed the team to keep costs below the 2 per cent barrier.
Performance of funds vs sectors over 10-yrs
Source: FE Analytics
||1-yr returns (%)
||3-yr returns (%)
||5-yr returns (%)
||10-yr returns (%)
|Jupiter - Merlin Growth Portfolio
|IMA Flexible Investment
|Jupiter - Merlin Worldwide Portfolio
|Jupiter - Merlin Income
|IMA Mixed Investment 20%-60% Shrs
|Jupiter - Merlin Balanced
|IMA Mixed Investment 40%-85% Shrs
The four Jupiter Merlin funds, which all have either four or five FE crowns to their name, are among the best-performing multi-manager funds – and indeed multi-asset funds – in the entire unit trust and OEIC universe of recent years.
According to FE Analytics
, Jupiter Merlin Income
are top quartile in their respective sectors over three-, five- and 10-year periods. Jupiter Merlin Worldwide
is top quartile over five and 10 years, but only second quartile over three.
The youngest of the three, Jupiter Merlin Balanced, is top quartile over three and five years, but has yet to achieve a 10-year track record.
The funds have around the same volatility as their sector average, but tend to protect more effectively against the downside. All four outperformed in both 2008 and 2011, for example.