With more than £7.5bn in combined assets under management (AUM) and three FE Alpha Managers at the helm, Jupiter Merlin is arguably the team to beat in the multi-manager universe.
Aside from the newly launched Conservative portfolio, all of the funds are top-quartile performers in their respective sectors over five years, and all those with a long enough track record are
over 10 years as well.
While there is a significant degree of crossover in the funds’ holdings, they have different asset weightings and risk levels.
Other factors such as cost, yield and size also distinguish the portfolios from one another.
Here is the information that anyone interested in the range should consider before picking one of the options:
Jupiter Merlin Income
With £3.7bn AUM, this is the largest of the Merlin portfolios. Like all the others, it is headed up by Peter Lawery
, Algy Smith Maxwell
and John Chatfeild-Roberts (pictured)
, the last of whom is also chief investment officer at Jupiter.
The fund sits in the IMA Mixed Investment 20-60% Shares sector, meaning that between 20 and 60 per cent of its assets must be invested in the equity market at any given time.
It currently has 57 per cent in equities, with around half of this exposure in the UK market.
It holds a number of pure UK equity funds, including Artemis Income
, Invesco Perpetual Income and Jupiter UK Special Situations.
The rest of Jupiter Merlin Income’s equity exposure is split between developed markets and emerging markets, with the M&G Global Dividend
and Newton Asian Income
funds featuring prominently.
Much of Merlin Income’s 33 per cent fixed interest exposure is invested in Ariel Bezalel’s Jupiter Strategic Bond
fund, though M&G Strategic Corporate Bond
and Kames High Yield Bond
also have a significant weighting.
The remaining 10 per cent of the fund is invested in cash and alternative assets, including a physical gold ETF.
Performance of fund vs sector over 10-yrs
Source: FE Analytics
|Jupiter - Merlin Income
|IMA Mixed Investment 20-60% Shares
While all of the funds are strong performers, Jupiter Merlin Income is arguably the pick of the bunch relative to its sector.
Not only has it significantly outperformed its peer group over one, three, five and 10 years – and since launch – but it has beaten its sector average in 11 of the last 11 calendar years.
The fund has a specific income focus and is currently yielding 2.9 per cent.
Like all of the Merlin portfolios, it has a minimum investment of £500 and a minimum top-up of £50.
With a total expense ratio (TER) of 2.33 per cent, it is expensive even for a multi-manager fund, although it is less costly than all but one of the other Jupiter Merlin funds.
It has an FE Crown Fund Rating of five.
Jupiter Merlin Growth
For investors who want something a little bit punchier and are only interested in equities, the Jupiter Merlin Growth portfolio may be of interest.
Although it can hold fixed interest funds, it currently has 90 per cent in global equities, with the rest in cash. Around one-third of this equity exposure is in UK funds, with the rest split between US, Asia Pacific, Japan, European, and global funds.
Many of the names held by Jupiter Merlin Income are also held by Jupiter Merlin Growth, although the latter also has exposure to AXA Framlington UK Select Opps
, Findlay Park American and Jupiter Japan Income
The managers have more leeway to hold niche investments in this portfolio, with areas such as technology and energy well represented.
Performance of funds over 10-yrs
Source: FE Analytics
Jupiter Merlin Growth has easily beaten its IMA Flexible Investment sector over one, three, five and 10 years.
While it has outperformed the Merlin Income fund in the longer term, it has also been far more volatile and has lost more in falling markets.
According to FE data, it has an annualised volatility of 12.68 per cent over the last decade, compared with 7.51 per cent from Jupiter Merlin Income.
Merlin Growth is the oldest of the five, launched in September 1992. Since then it has amassed AUM of £1.66bn. The fund has a TER of 2.57 per cent and has four FE crowns.
Jupiter Merlin Balanced
This is somewhere between the Income and Growth portfolios – on one hand it targets a competitive yield and low volatility, but it can hold up to 85 per cent in equities and therefore can take advantage of rising markets.
As the graph above shows, Jupiter Merlin Balanced falls short of the Growth portfolio in the total return stakes, but has a volatility more in keeping with Jupiter Merlin Income.
It is another consistent top-quartile performer in its sector – in this case IMA Mixed Investment 40-85% Shares – and also has a lower volatility than its peer group in the long-term.
The £1.3bn fund has 23 per cent in bonds, around 9 per cent in cash and gold, and the rest in equities. Again the UK makes up the biggest proportion, but it also has significant exposure to the US, Asia Pacific and Japan.
This is the fund that Chatfeild-Roberts has the largest bulk of his own assets invested in at the moment.
"It’s got quite a lot in equities and has a decent yield, which I like," he told FE Trustnet last month
The fund has a TER of 2.41 per cent and four FE crowns. It is currently yielding 2.1 per cent.
Jupiter Merlin Conservative
Launched only last month, Jupiter Merlin Conservative has a lot to live up to given the stellar performance of the other four portfolios.
As Chatfeild-Roberts said last month, this is a fund for investors who are "scared of equity markets but still want to retain a little bit of equity exposure".
It will target a lower volatility than even the Merlin Income portfolio, with a maximum of 35 per cent in equities and a minimum of 45 per cent in investment grade bonds at any given time.
There is a large degree of overlap with the other mixed asset portfolios, with Invesco Perpetual Income, M&G Global Dividend and Jupiter Strategic Bond all core holdings.
It is the cheapest of the five, with a TER of 1.8 per cent. The fund also has the highest yield [3.8 per cent] of all the Merlin portfolios.
Jupiter Merlin Worldwide
Last but not least is the £771m Jupiter Merlin Worldwide fund – the only one of the five that does not sit in one of the Mixed Investment sectors.
It is in a similar mould to the Jupiter Merlin Growth portfolio in that it is a globally diversified equity-focused fund; however, it does not have a UK core, but instead has a greater proportion of its assets in US and global funds.
Asia Pacific and Japanese funds also have a high weighting, with First State Asia Pacific
and CF Morant Wright Japan particularly large holdings.
Performance of funds vs sector over 10-yrs
Source: FE Analytics
Merlin Worldwide has beaten the average IMA Global fund by a significant margin over three, five and 10 years, with less volatility.
It has fallen short of the Merlin Growth fund over all three time periods and has also been slightly more volatile.
It has the same TER as the Merlin Growth portfolio [2.57 per cent] and also has four FE crowns.