Talking factsheet: Global Flexible Bond Strategy

Ariel Bezalel gives an overview of Jupiter’s global flexible bond strategy, how the investment process works, and how the team seek to generate alpha. 

Flexible, active and unconstrained fixed income

The Jupiter Dynamic Bond fund is a ‘go anywhere,’ high-conviction fund, meaning the managers are able to seek out the best opportunities within the fixed interest universe on a global basis while carefully managing downside risk.

Experienced, diversified

The large and highly experienced fund management team led by Ariel Bezalel, Head of Strategy, Fixed Income, and Harry Richards, Fund Manager, are constantly assessing the dynamics of global fixed income markets, managing risk in the portfolio through adjustments to asset allocation, security selection and duration management. The result is a flexible and highly diversified, global, unconstrained bond fund that can be the cornerstone of an investor’s fixed income allocation.

Go anywhere approach
The fund managers aim to deliver returns for investors through a range of market conditions by diversifying across different types of debt and across the credit spectrum. As a ‘go anywhere’ bond fund, the team have the freedom to seek the best opportunities in the global fixed income universe. The team is structured to be able to react quickly to new ideas and changing market circumstances rather than having to go through investment committees.

No benchmark

The unconstrained approach means that investors are not tied to a benchmark, as the fund shifts between government, investment grade and high yield bonds. It also has access to more complex assets such as derivatives (which are primarily used to mitigate risk), contingent capital and emerging market debt.
Diversification potential
The ability of the fund managers to balance the portfolio between different subsectors of the fixed income universe can allow the fund to perform through a range of market conditions. Fixed income assets can act as a diversifier to investments in equities as the asset classes typically exhibit relatively low correlation to one another. The income stream from bonds may be more consistent than that provided by shares due to the defined nature of coupon payments. Furthermore, bonds can offer a means of providing an income above the interest rates available on savings accounts.
Investment philosophy
The team aims to maintain a balance between macro and credit risk. Long-term fundamental research underpins the active views. The team has an unconstrained investment approach and an emphasis on special themes. They favour credits with a clear commitment to de-leveraging and aim to identify and manage downside risk.

Credit research for ESG

The team ensures credit research captures environmental, social and governmental risks and opportunities. They also use access to management to highlight ESG issues.

Active interest rate risk management

The possibility to flexibly alter the portfolio duration of the fund provides the managers with an additional lever to cushion portfolio risk or even to benefit from changes in interest rates.

Please note

Market and exchange rate movements can cause the value of an investment to fall as well as rise, and you may get back less than originally invested. The views expressed are those of the individuals mentioned at the time of writing, are not necessarily those of Jupiter as a whole, and may be subject to change. This is particularly true during periods of rapidly changing market circumstances. 

Fund-specific risks
  • Investment risk – Market and exchange rate movements can cause the value of an investment to fall as well as rise, and you may get back less than originally invested, even if the share class is hedged against the main currency of the Fund.
  • High Yield bond risk – The fund can invest a significant portion of the portfolio in high yield bonds and bonds which are not rated by a credit rating agency. While such bonds may offer a higher income, the interest paid on them and their capital value is at greater risk of not being repaid, particularly during periods of changing market conditions.
  • Interest rate risk – Bonds are very sensitive to interest rate changes and it is possible that issuers of bonds will not pay interest or return the capital promised. Bonds may also be downgraded by rating agencies. These events can reduce the value of bonds and have a negative impact on performance.
  • Liquidity risk – In difficult market conditions, reduced liquidity in bond markets may make it harder for the manager to sell assets at the quoted price. This could have a negative impact on the value of your investment. In extreme market conditions, certain assets may become hard to sell in a timely manner or at a fair price. This could affect the Fund’s ability to meet investors’ redemption requests upon demand.
  • Derivative risk – The Fund may use derivatives to generate returns and/or to reduce costs and the overall risk of the Fund. Using derivatives can involve a higher level of risk. A small movement in the price of an underlying investment may result in a disproportionately large movement in the price of the derivative investment.
  • Short Selling risk – There is a risk that any company providing services such as safe keeping of assets or acting as counterparty to derivatives may become insolvent, which may cause losses to the Fund.
  • Capital Erosion risk – All the share class charges are taken from income. Should there not be sufficient income charges will be taken from capital.

 

The fund may be subject to other risk factors, please see the Prospectus for further information. An investment constitutes the acquisition of shares in the fund, not in the fund’s underlying assets.

 

Please refer to the latest sales prospectus of the fund and to the Key Investor Information Document (KIID) or Key Information Document (KID), particularly to the fund’s investment objective and characteristics including those related to ESG (if applicable), before making any final investment decisions. These are available from the Document Library. We recommend you discuss any investment decisions with a financial adviser, particularly if you are unsure whether an investment is suitable. Jupiter is unable to provide investment advice.

The Prospectus and Key Investor Information Document (KIID) or Key Information Document (KID)are available in English and other languages required by the local applicable law free of charge in the document library. A summary of investor rights in English can be found here or in the document library. The Management Company may terminate marketing arrangements.

Meet the team

Jupiter Fixed Income Team

Investors in the fund can benefit from the expertise and experience of our fund managers and credit analysts, who optimise exposure to all parts of the global bond market in any environment. The team is headed by Ariel Bezalel, Head of Strategy, Fixed Income, who has over 20 years of experience in sovereign and credit markets, along with Fund Manager Harry Richards, Fund Manager Vikram Aggarwal, a team of dedicated credit analysts led by Luca Evangelisti, Head of Credit Research, with additional expertise provided by Matthew Morgan, Investment Director, Fixed Income. The whole team is based in London, with the single location fostering strong team interaction, communication, and agility of active fund management.

Important information

Market and exchange rate movements can cause the value of an investment to fall as well as rise, and you may get back less than originally invested.

 

 

Jupiter Dynamic Bond

The Prospectus and Key Investor Information Document (KIID) are available in English and other languages required by the local applicable law free of charge in the document library. A summary of investor rights in English can be found here or in the document library. The Management Company may terminate marketing arrangements.