Jupiter shares slide as retail arm hit by £1.9bn outflows

Unconstrained fixed income funds and UK and European equity strategies main culprits behind Q1 redemptions

Jupiter’s retail fund arm has suffered another quarter of outflows as anxieties around the war in Ukraine and rising inflation prompted investors to bolt for the exit.

The FTSE 250 fund group closed out the first quarter with £55.3bn in assets under management, down from the £60.5bn it had at the end of December 2021.

The 9% drop in assets was driven by £1.6bn of net outflows and negative returns of £3.6bn as markets turned volatile.

Shares in the asset manager sank 4% off the back of the announcement. Year-to-date it has lost close to 30% off the value of its share price.

Investors continue shunning UK and European equity funds

Jupiter said worsening geopolitical events and inflationary concerns weighed on investor demand and created a “risk-off” environment for both equities and fixed income.

This was acutely felt in its retail funds arm, which haemorrhaged £1.9bn during the quarter, over double the amount it lost in the same period a year ago.

Once again, Jupiter blamed redemptions on continued weak demand for its UK equity and European strategies, as well as outflows from its unconstrained fixed income funds.

Though its wholesale business continued leaking cash, its institutional channel ended the period in positive territory with net inflows of £200m. This was thanks to a mandate from Brunel into its global sustainable equities range and two client wins in UK Value equities.

Across both channels, inflows into its sustainable funds held up well, with clients adding £200m.

Investment trusts assets tumble

Its investment trust division, which includes Chrysalis Investments, brought in £100m, though assets tumbled to £900m thanks to negative returns of £400m.

Jupiter’s closed-ended fund stable has been in the spotlight, following reports Chrysalis managers Nick Williamson and Richard Watts raked in £112m in performance fees.

The unprecedented fees were sharply criticised due to the fact they were calculated over a shorter time frame of one year in which the £1.2bn trust saw NAV jump 57%. At the time Stifel said there was a “high risk that the management fee is high one year largely on unrealised gains”.

To its point, in the first quarter the trust has endured a sharp reversal of fortunes, with NAV falling 13% as a slew of its late stage growth holdings were written down.

See also: Eyewatering Chrysalis performance fee throws investment trust charges in the spotlight

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