Jupiter suffers £2.3bn redemptions as investors shun bond fund

Jupiter has continued to suffer outflows in the second quarter as investors remain standoffish from its multi-billion pound Dynamic Bond fund.

Jupiter battered in downbeat industry forecasts

Over the first half of the year redemptions reached £2.3bn compared with net inflows of £3.6bn during the same period last year.

Assets under management fell 4% to £48.2bn.

Analysts from JP Morgan, Cazenove and Numis Securities had previously predicted total outflows for the FTSE 250 asset manager of about £1bn based on their channel checks of Morningstar and Bloomberg fund data.

As with the first quarter, in which the firm saw £1.3bn redemptions, negative flows were driven by the fund group’s Dynamic Bond fund.

Jupiter blamed the fund’s current defensive positioning and wider industry sentiment shift away from fixed income products for the persistent outflows.

The firm said that the £7.1bn Sicav vehicle, run by Ariel Bezalel, was the sole cause of net outflows over the first six months of the year. Mutual fund outflows totalled £1.9bn compared with £3.4bn in inflows in the first half of 2017.

Jupiter chief executive Maarten Slendebroek (pictured) previously cautioned investors that the firm’s future flow pattern will be “less predictable” as it continues to diversify its business outside the UK.

The firm reiterated in the interim figures that expanding its geographical footprint and product line remains a key focus. It recently made three senior distribution hires, including appointing a new head of Latin America and US offshore and a new head for its Netherlands office, which will open later this year.

However, Jupiter said it came in ahead of consensus in terms of revenue, profits and assets under management.

Net revenue for the period was £214.8m, above analysts’ predictions of £207.7m. Meanwhile, profit before tax edged up 3% from £93.9m to £96.5m.

Slendebroek said: “The first half of 2018 reflected a more challenging operating environment against a more volatile global geopolitical backdrop. Despite net outflows in the period, it was clear our resilient business model and strong balance sheet continue to deliver for all our stakeholders.

“In 2018 we reaffirmed our strategy of delivering active outperformance for our clients through a diversified operating model based on a culture of accountability, high performance and independent thinking.”

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