A range of flexible fixed income solutions

Jupiter Dynamic Bond

If inflationary pressures continue to subside and recession takes hold, investments in bonds may benefit as that may trigger a fall in yields. As yields decline bond prices should rise as they move in inverse directions. Such an environment may be helpful for funds like the Jupiter Dynamic Bond fund. The investment management team for the fund currently supports a view of slowing inflation and lower growth in the coming months.

Jupiter Strategic Absolute Return Bond Fund

In order to navigate the ups and downs of the market, you need to be flexible and the portfolio needs to be rejigged constantly. In 2022, the steep and rapid rise in interest rates roiled the fixed income and equity markets. Elevated inflation could pose many challenges, including eroding the value of money and depressing the price of existing bond holdings. In such a scenario, an unconstrained strategy with the ability to ‘go anywhere’ in the market may be popular. For example, the Jupiter Strategic Absolute Return Bond Fund invests primarily in bonds and similar debt instruments issued by governments and companies anywhere in the world. Portfolio construction is driven by an on-going assessment of the drivers of returns such as interest rates, bond prices, the economic outlook, inflationary expectations, and global political issues.

Jupiter Strategic Absolute Return Bond Fund

Sometimes it’s unclear what’s going to happen and even harder trying to make a prediction about the path inflation and global growth will take. The Jupiter Strategic Absolute Return Bond Fund invests primarily in bonds and similar debt instruments issued by governments and companies anywhere in the world. Portfolio construction is driven by an ongoing assessment of the drivers of returns such as interest rates, bond prices, the economic outlook, inflationary expectations, and global political issues.

Jupiter Emerging Market Debt Fund

In an environment where economic growth remains resilient, inflation subsides and interest rates fall, one asset class that could perform well is Emerging Market Debt. These conditions, coupled with stable commodity prices and a weaker US dollar would attract investors seeking higher yields compared to debt in developed markets. The Jupiter Emerging Market Debt Fund takes a blended approach to asset allocation, with a short duration constrain in order to limit volatility. It also focuses on hard currency sovereign debt, which mitigates currency risk as the debt is denominated in major currencies that are widely seen as being more stable than local currencies.

Jupiter Financials Contingent Capital Fund

If inflation subsides enough to stop central banks from continuing to aggressively hike interest rates, a recession could be prevented, and economic growth could start picking up. In such an environment, a strategy that may be benefits is the Jupiter Financials Contingent Capital Fund. The strategy invests in CoCos, which are a type of security issued by banks and insurance companies. They were first issued after the financial crisis to ensure that financial institutions remained well-capitalised. In the last 10 years, banks have seen a significant improvement in their fundamentals, with reduced leverage, better asset quality and much stronger capital positions. We believe that Contingent Convertibles bonds are currently trading cheaply on a historical perspective and are attractive compared to the European and US “high yield” markets.

Jupiter Global High Yield Bond

High yield bonds typically provide a higher income than bonds that are considered less likely to default on their principal payment. Reduced demand in the economy or a recession could expose such bonds to higher risks as the revenue of companies issuing such bonds may suffer. Investments in such bonds therefore call for thorough research, which means sifting through the profile of thousands of companies operating in a range of geographies and sectors. Selection of assets that are most likely to maximise profits and minimize losses is crucial. The Jupiter Global High Yield Bond aims to achieve income and capital gain over a medium to long term by investing in such bonds.

Jupiter Dynamic Bond ESG

Investors are looking for income in a turbulent world marked by low interest rates without losing sight of their responsibility to society at large. Tackling the climate emergency and boosting equality and diversity in society are critical focus areas for governments and corporates alike. Addressing these issues through a credible investment strategy calls for specialised skills, deep knowledge of the markets and active management to maximise value and minimize risks. The Jupiter Dynamic Bond ESG Fund aims to achieve a high income with the prospect of capital growth over the long term by investing in a portfolio of investments in global debt securities in respect of which consideration is given to certain environmental, social and governance (“ESG”) characteristics. The Investment Manager’s investment process includes consideration of the following two environmental and social characteristics, support of the transition to a low carbon economy and pursuit of a positive stakeholder agenda.

This is a marketing communication. Please refer to the latest sales prospectus/scheme particulars of the funds and to the Key Information Documents (KIDS), particularly to the funds’ investment objective and characteristics including those related to ESG (if applicable), before making any final investment decisions.

An investment constitutes the acquisition of shares in a fund, not in the fund’s underlying assets. 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.

This document is for informational purposes only and is not investment advice. 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. Initial charges are likely to have a greater proportionate effect on returns if investments are liquidated in the shorter term.

Past performance is not a guide to future performance. The views expressed are those of the author 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. Every effort is made to ensure the accuracy of the information provided but no assurance or warranties are given.

Investment risk – while the Funds 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 Funds 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.

Credit risk – the issuer of a bond or a similar investment within the Funds may not pay income or repay capital to the Funds when due. Bonds which are rated below investment grade are considered to have a higher risk exposure with respect to meeting their payment obligations.

Liquidity risk – some investments may become hard to value or sell at a desired time and price. In extreme circumstances this may affect the Funds’ ability to meet redemption requests upon demand.

The Funds 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 Funds’ prospectus/Scheme Particulars.

CoCos and other investments with loss absorbing features – the Funds 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.

Interest rate risk – investments in bonds are affected by interest rates and inflation trends which may affect the value of the Funds.

The Jupiter Dynamic Bond ESG Fund is a sub fund of the Jupiter Global Fund SICAV, a UCITS fund incorporated as a Société Anonyme in Luxembourg and organised as a Société d’investissement à Capital Variable (SICAV) with registered office: Citibank Europe plc, Luxembourg Branch, 31 Z.A. Bourmicht L-8070 Bertrange, Grand Duchy of Luxembourg. The Management Company is Jupiter Asset Management International S.A. (JAMI), registered address: 5, Rue Heienhaff, Senningerberg L-1736, Luxembourg, authorised and regulated by the Commission de Surveillance du Secteur Financier.

The Jupiter Strategic Absolute Return Bond Fund is a sub fund of Jupiter Asset Management Series PLC an investment company with variable capital established as an umbrella fund with segregated liability between sub-funds which is authorised and regulated by the Central Bank of Ireland pursuant to the European Communities (Undertakings for Collective Investment in Transferable Securities) Regulations 2011, as amended. Registered in Ireland under registration number 271517. Registered office: 33 Sir John Rogerson’s Quay, Dublin 2, Ireland.

The Key Investor Information Document (KIID), Supplementary Information Document and Scheme Particulars for the Jupiter Corporate Bond Fund, Jupiter Strategic Bond Fund, Jupiter Monthly Income Bond Fund and the KIID and Prospectus for the Jupiter Dynamic Bond ESG Fund and the Jupiter Strategic Absolute Return Bond Fund are available for download from www.jupiteram.com. A summary of investor rights in English can be found in the Document Library at www.jupiteram.com. The Management Company may terminate marketing arrangements.

No part of this document may be reproduced in any manner without the prior permission of JUTM and/or JAMI/JAMEL.