The global fixed income markets are marked by sudden swings in macroeconomic narratives in recent years. Elevated geopolitical uncertainty, the unpredictability of policymakers’ reaction function and the fading attractiveness of money markets due to a decline in cash rates increasingly underscore the importance of flexible bond strategies. By actively managing exposures, such strategies seek to capture incremental yield over cash while exploiting dislocations caused by macroeconomic volatility.
Jupiter has a long history and deep experience in managing flexible bond strategies. The Jupiter Multi-Sector Fixed Income Team has been managing flexible fixed income strategies since 2008, while the Jupiter Dynamic Bond has been available to investors since 2012. This period has been punctuated by many seminal occurrences such as the aftermath of the Global Financial Crisis, the European Debt Crisis, Brexit and the surge in inflation following COVID-19 due to supply chain disruption. The ability to adapt to changing market conditions has been central to navigating fixed income markets effectively.
The Jupiter Dynamic Bond is an unconstrained, directional strategy that invests across a broad range of fixed income segments, with an aim to achieve a high income with the prospect of capital growth through a combination of top-down asset allocation (such as positioning across government bonds, high yield credit and duration) and bottom-up credit selection.
Three key principles drive the team’s approach to investing: staying flexible, gaining truly global exposure and a sustained focus on capturing the yield advantage.
Being flexible
A defining feature of today’s fixed income markets is their sensitivity to macroeconomic data and geopolitical developments. Market moves are often amplified by leverage and derivatives, at times leading to price action that appears disconnected from underlying fundamentals.
In this environment, flexibility is essential. The Fund actively adjusts its positioning across interest rates and credit, both in terms of geographic exposure and maturity profile, seeking to take advantage of market dislocations.
Active adjustment
Dynamic Bond Monthly Changes in Duration Contribution by Curve
Truly global
Fixed income benchmarks, whether for government or corporate debt, are often dominated by issuers from a few key countries. Bonds issued from the United States typically have an outsized weighting in these indices. This reflects the scale of debt issuance rather than the most attractive investment opportunities.
For Dynamic Bond, being truly global means providing diversified exposure to both interest rates and credit spreads across regions. While the portfolio includes the US, Europe and the UK, it also allocates to developed markets such as Australia and New Zealand, as well as emerging markets including Brazil, Mexico and Paraguay, thereby broadening the opportunity set, enhancing diversification and capturing attractive yield opportunities.
In the current environment, emerging markets offer particularly compelling opportunities, although investors need to be mindful of the risks associated with such investments including higher volatility, lower liquidity, as well as currency risks.
For instance, real yields on local currency debt in countries such as Brazil and Mexico are way higher than those in developed markets.
Real yield comparison
10-year local currency sovereign bond yield minus Bloomberg consensus estimate of 2026 inflation
In addition, emerging markets can provide idiosyncratic sources of return, with certain special situations delivering strong performance in recent years.
Offering a true yield advantage
A key characteristic of fixed income investing—particularly in credit—is that income tends to account for a large share of total returns over the long term.
Income is key
EUR corporate investment grade fixed income: income return vs price return
Jupiter Dynamic Bond Yield to Maturity vs. EUR Corporate Bond Market Segments
Quoted yields are not a guide or guarantee of the expected level of distributions to be received. The yield may fluctuate significantly during times of extreme market and economic volatility.
This yield is generated through disciplined portfolio construction, targeting areas of the market that offer attractive income while maintaining solid credit quality. This process is supported by detailed credit analysis from the well-resourced Jupiter Credit Research Team.
Jupiter is a high-conviction active asset manager focused on delivering strong client outcomes. Investment managers have the autonomy to act on their convictions, supported by risk specialists. The firm emphasises governance and client relationships, while its experienced and collaborative team—aligned through long-term incentives—drives differentiated strategies across a global distribution network.
Fund specific risks
- Share Class Hedging Risk - The share class hedging process can cause the value of investments to fall due to market movements, rebalancing considerations and, in extreme circumstances, default by the counterparty providing the hedging contract.
- Interest Rate Risk - The Fund can invest in assets whose value is sensitive to changes in interest rates (for example bonds) meaning that the value of these investments may fluctuate significantly with movement in interest rates.e.g. the value of a bond tends to decrease when interest rates rise
- Pricing Risk - Price movements in financial assets mean the value of assets can fall as well as rise, with this risk typically amplified in more volatile market conditions.
- Contingent convertible bonds - The Fund may invest in contingent convertible bonds. These instruments may experience material losses based on certain trigger events. Specifically these triggers may result in a partial or total loss of value, or the investments may be converted into equity, both of which are likely to entail significant losses.
- Credit Risk - The issuer of a bond or a similar investment within the Fund may not pay income or repay capital to the Fund when due.
- Derivative risk - the Fund may use derivatives to reduce costs and/or the overall risk of the Fund (this is also known as Efficient Portfolio Management or "EPM"). Derivatives involve a level of risk, however, for EPM they should not increase the overall riskiness of the Fund.
- Liquidity Risk (general) - During difficult market conditions there may not be enough investors to buy and sell certain investments. This may have an impact on the value of the Fund.
- Counterparty Default Risk - The risk of losses due to the default of a counterparty on a derivatives contract or a custodian that is safeguarding the Fund's assets.
- Sub investment grade bonds - The Fund may invest a significant portion of its assets in securities which are those rated below investment grade by a credit rating agency. They are considered to have a greater risk of loss of capital or failing to meet their income payment obligations than higher rated investment grade bonds.
- Charges from capital - Some or all of the Fund’s charges are taken from capital. Should there not be sufficient capital growth in the Fund this may cause capital erosion.
For a more detailed explanation of risk factors, please refer to the "Risk Factors" section of the Scheme Particulars.
Important Information
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This document is intended for investment professionals and is not for the use or benefit of other persons, including retail investors. This document is informational only and is not investment advice. The value of investments and income may go down as well as up and investors may not get back amounts originally invested. Exchange rate changes may cause the value of investments to fall as well as rise. Past performance does not predict future returns. The views expressed are those of the author(s) at the time of preparation, are not necessarily those of Jupiter as a whole and may be subject to change. Every effort is made to ensure the accuracy of the information provided, but no assurance or warranties are given. “BLOOMBERG®” and the Bloomberg indices listed herein (the “Indices”) are service marks of Bloomberg Finance L.P. and its affiliates, including Bloomberg Index Services Limited (“BISL”), the administrator of the Indices (collectively, “Bloomberg”) and have been licensed for use for certain purposes by the distributor hereof (the “Licensee”). Bloomberg is not affiliated with Licensee, and Bloomberg does not approve, endorse, review, or recommend the financial products named herein (the “Products”). Bloomberg does not guarantee the timeliness, accuracy, or completeness of any data or information relating to the Products. Issued in the UK by Jupiter Asset Management Limited (JAM), registered address: The Zig Zag Building, 70 Victoria Street, London, SW1E 6SQ is authorised and regulated by the Financial Conduct Authority. Issued in the EU by Jupiter Asset Management International S.A. (JAMI), registered address: 5, Rue Heienhaff, Senningerberg L-1736, Luxembourg which is authorised and regulated by the Commission de Surveillance du Secteur Financier. No part of this document may be reproduced in any manner without the prior permission of JAM/JAMI.