Jupiter has launched a flexible multi-asset income fund for recent hire Talib Sheikh (pictured).
The Flexible Income fund, a sub-fund of the Jupiter Global fund, is fully unconstrained and will target assets globally that can deliver a sustainable level of regular income.
It is expected to yield between 4% and 6%.
Sheikh will be lead manager on the fund and will be supported by a team of three managers, Lee Manzi, Rhys Petheram and Joseph Chapman.
The team will also be partnering with other Jupiter equity and fixed income managers, including Jupiter Asian Income manager Jason Pidcock, who will be running individual “sleeves” or bespoke portfolios with an income bent for the fund.
Sheikh said the decision to leverage the track record and experience of Jupiter’s in-house specialists was to reflect that there is “active management working at every level of the portfolio”.
Better way to run multi-asset
Sheikh joined Jupiter in June from JP Morgan Asset Management where he worked as a manging director and portfolio manager for nearly 20 years, running the £1.25bn JPM Global Macro Opportunities fund among other vehicles.
Speaking at a press briefing on Tuesday he said he decided to leave his former employer because he was looking for “a better way” to run multi-asset funds.
“JPMAM was a brilliant organisation but over the last couple of years I thought perhaps there was a better way, perhaps there was a different way of running these types of multi-asset products, and I think Jupiter is the place to do that and has the platform to do that.”
He said that while the multi-asset income sector has ballooned in the decade since the financial crisis, growing from €9bn (£7.98bn) to €111bn (£98.45bn), most of the growth has been driven by a handful of big players.
“There are some huge funds out there; I used to run one of them in my old life at JPMAM,” said Sheikh.
The goal of the Flexible Income fund is to get investors to think more creatively about diversifying their underlying income exposures, he said.
“That’s why we feel this more active, innovative product at Jupiter is worthy of consideration.”
Medium risk
Sheikh said there is a “real structural growth” argument for multi-asset income funds targeting a medium level of risk as people are living longer and negative real rates are eroding the purchasing power of cash faster than ever before.
“The need for income isn’t going away but those traditional sources of income that people could rely on historically aren’t going to come back any time soon,” he said.
The Flexible Income fund will target volatility between 6% and 8%, half the level of volatility of equity markets. It currently sits within Morningstar’s Moderate Allocation category.
Allocation
The portfolio will be comprised of 400 different securities across 12 asset classes.
On day one the fund will be invested in US high yield (30%), UK and European equities, which will be equally weighted at 12%, and US equities, which will make up 10% of the portfolio.
It will have zero exposure to investment grade bonds.
While the fund will have positions in emerging markets corporate and sovereign debt (4% and 5% respectively), it will not have anything invested in EM stocks.
