The Jupiter Strategic Absolute Return Bond Fund aims to deliver returns in all market conditions by investing across the full range of the liquid fixed income and currency universe. The team are also able to take short positions, which can often add meaningfully to performance. The fund has no benchmark and targets an average volatility in its portfolio construction.
Diversified opportunity set
The manager uses global government bonds, foreign exchange, global credit, emerging market debt and full derivative flexibility to achieve their absolute return target.
The fund targets high risk-adjusted returns and small drawdowns via diversification, with a dynamic and speedy approach to asset allocation, country, and security selection.
Focus on total return and liquidity
The team invests on a true absolute return basis, focusing on price movements for their returns rather than carry. The high-quality portfolio delivers liquidity and flexibility for the fund and its investors.
Construction is at the forefront
Construction is at the forefront of the investment process and embeds risk management along the way. In seekingto hit the fund’s risk and return targets, the manager uses a formulaic risk-budgeting approach.
The fund avoids a central and persistent investment theme: each position exists only if it is part of the team’s forward-looking view on the market. Risk is controlled actively to avoid drawdowns via a short-term tactical approach working alongside longer term strategic views.
The Jupiter Strategic Absolute Return Bond team combine both top-down economic fundamentals and bottom-up market mechanics to formulate their strategy. Sector specialists from Jupiter’s 25-member strong fixed income team provide high conviction ideas from within their asset classes. The management team feeds this into their construction framework, deciding on asset allocation and the total risk budget to create a highly diversified portfolio.
- Investment risk – while the Fund aims to deliver above zero performance irrespective of market conditions, there can be no guarantee this aim will be achieved.
Furthermore, the actual volatility of the Fund may be above or below the expected range, and may also exceed its maximum expected volatility. A capital loss of some or all of the amount invested may occur.
- Emerging markets risk – less developed countries may face more political, economic or structural challenges than developed countries.
- 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. Bonds which are rated below investment grade are considered to have a higher risk exposure with respect to meeting their payment obligations.
- CoCos and other investments with loss absorbing features – the Fund may hold investments with loss-absorbing features, including up to 20% in contingent convertible bonds (CoCos). These investments may be subject to regulatory intervention and/or specific trigger events relating to regulatory capital levels falling to a pre-specified point. This is a different risk to traditional bonds and may result in their conversion to company shares, or a partial or total loss of value.
- Bond Connect Risk – The rules of the Bond Connect scheme may not always permit the Fund to sell its assets, and may cause the Fund to suffer losses on an investment.
- Interest rate risk – investments in bonds are affected by interest rates and inflation trends which may affect the value of the Fund.
- Liquidity risk – some investments may become hard to value or sell at a desired time and price. In extreme circumstances this may affect the Fund’s ability to meet redemption requests upon demand.
- Derivative risk – the Fund uses 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. Derivatives also involve counterparty risk where the institutions acting as counterparty to derivatives may not meet their contractual obligations.
- Currency risk – the Fund can be exposed to different currencies. The value of your shares may rise and fall as a result of exchange rate movements.
- The Fund may be more than 35% invested in Government and public securities. These can be issued by other countries and Governments. Your attention is drawn to the stated investment policy which is set out in the Fund’s prospectus.
For a more detailed explanation of risks, please refer to the “Risk Factors” section of the prospectus.
Meet the team
The portfolio manager, Mark Nash, is supported by a 25-member fixed income team, with expertise across global multi-sector, emerging market debt and credit, and draws on Jupiter’s wealth of expertise across fixed income and multi-asset.
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