The alternative path to uncorrelated returns

The alternative path to uncorrelated returns

It is nice to have alternatives, especially in periods of market volatility, when equity and fixed income returns are under strain. Trade tensions, geopolitical conflict and concern about the pace of economic growth have forced many investors to review their financial goals. In these times, it can make sense to look beyond long-only stock and bond funds. Alternative investment strategies can supplement traditional stock, bond, and cash allocations. Alternative investments can include hedge funds, private capital, natural resources, and real estate.

Many of these types of investments aim to generate positive returns regardless of the market backdrop, although such an outcome cannot be guaranteed. Alternatives can also have a low correlation to major asset classes. Although correlation can change over time, and there is a risk that diversification benefits decrease, some kinds of alternatives have exhibited low correlation over a long period. 1 In this way, they can be used to diversify portfolio returns and to help investors to achieve their long-term goals.

At Jupiter Asset Management, we have a range of actively managed alternative investment strategies that aim to offer uncorrelated returns. Four funds that we highlight here are: Jupiter Merian Global Equity Absolute Return Fund (GEAR), Jupiter GEARx Strategy, Jupiter Gold & Silver Fund and Jupiter Strategic Absolute Return Bond Fund (SARB).

1 Source: Morningstar, from 01.07.2009 to 30.04.2025.


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Jupiter Merian Global Equity Absolute Return Fund (GEAR)

GEAR is a global market-neutral equities strategy designed to generate returns even in challenging environments. It is “macro agnostic”, meaning the fund managers do not attempt to predict macroeconomic outcomes. The GEAR investment process is data-led, using a diversified set of stock selection criteria. The fund systematically analyses thousands of stocks daily as it seeks to find the best portfolio for the current environment.

 

“We strongly believe that absolute return strategies like global equity market neutral should form part of a permanent allocation of well-diversified, multi-asset portfolios thanks to their ability to generate uncorrelated returns and therefore to improve the overall risk profiles of portfolios.”

 

Amadeo Alentorn, Lead Investment Manager, Global Systematic Equities.

GEAR fund manager since 2009, director of research 2009-2014.

Jupiter GEARx Strategy (GEARx)

GEARx is a Cayman-domiciled market neutral strategy which adopts a similar investment process to the well-established Ireland-domiciled Jupiter Merian global equity absolute return (GEAR) strategy, which has been running since 2009. Both are market neutral, holding a long and a short book in balance and targeting a beta of approximately zero. The investment process is designed to generate alpha with low correlation to both equity and bond markets.

 

The main differences lie in the constraints applied; for example, GEARx targets twice the targeted maximum annualised volatility limit of GEAR. While the GEAR strategy has a maximum annualised volatility limit of 6%, GEARx has a maximum annualised volatility limit of 12%.

 

“We apply a scientific approach to understanding global equity markets, and to how alpha can be consistently extracted with a multi-factor dynamic model.”

 

Amadeo Alentorn, Lead Investment Manager, Global Systematic Equities.

GEARx fund manager since its launch in 2025. 

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Jupiter Gold & Silver Fund

Gold & Silver blends allocations to gold and silver (via holdings in listed gold and silver bullion trusts) with shares of mining companies. Precious metals, being tangible assets with no counterparty risk, may be viewed as liability-free currencies that can be a safe harbour in periods of interest rate or financial market volatility. In times of high inflation, holding some gold may help to mitigate the effects of rising prices on an investment portfolio. Investors often overlook the potential benefits of monetary metals like gold and silver.

 

“We think allocating to a strategy that includes exposure to physical gold and silver via listed bullion funds, along with gold and silver mining companies in good jurisdictions — for us that means Australia and the Americas — can help investors to reduce portfolio volatility in difficult market environments.’”

 

Ned Naylor-Leyland, Investment Manager, Gold & Silver.
Manager of the fund since 2016.

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Jupiter Strategic Absolute Return Bond Fund (SARB)

SARB aims to generate returns in all market conditions by investing across the liquid fixed income and currency universe. The team is also able to take short positions, which generate profit when the value of an asset declines. This can potentially add meaningfully to performance, particularly in rising rate environments, when long-only bond strategies may struggle. The fund’s benchmark is the US Fed Funds Effective Overnight Rate, and the fund targets attractive risk-adjusted returns and low drawdowns.

 

“We have a much more flexible approach than traditional long-only bond funds. We look across a large universe as we seek to pick the right investments. We can take long and short positions and hedge out any unwanted risk. What we aim to achieve is a portfolio that is uncorrelated with the wider market.”

 

Mark Nash, Alternative Fixed Income.
Manager of the fund since 2016.

 


Fund specific risks

Jupiter Merian Global Equity Absolute Return Bond Fund

  • Currency risk - the Fund is denominated in USD and may use hedging techniques to try to reduce the effects of changes in the exchange rate between the currency of the underlying investments and the base currency of the Fund. These techniques may not eliminate all currency risk. The value of your shares may rise and fall as a result of exchange rate movements. 
  • Investment risk - whilst the Fund aims to deliver above zero performance irrespective of market conditions, there can be no guarantee this aim will be achieved. Furthermore the Fund may exceed its volatility limit. A capital loss of some or all of the amount invested may occur.
  • 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.
  • Company shares (i.e. equities) risk - the value of Company shares and similar investments may go down as well as up in response to the performance of individual companies and can be affected by daily stock market movements and general market conditions.
  • Stock Connect risk - the Fund may invest in China A-Shares through the China-Hong Kong Stock Connect (“Stock Connect”). Stock Connect is governed by regulations which are untested and subject to change. Trading limitations and restrictions on foreign ownership may constrain the Fund's ability to pursue its investment strategy.
  • Sustainability Article 8 - Investments are selected or excluded on both financial and non-financial criteria. The Fund's performance may differ from the broader market or other Funds that do not utilize ESG criteria when selecting investments.

For a more detailed explanation of risks, please refer to the "Risk Factors" section of the prospectus. The funds may be subject to other risk factors, please see the Prospectus for further information.

Jupiter GEARx Strategy specific risks

  • Lack of Operating History - The Fund is recently formed. There can be no assurance that the Fund will achieve its investment objectives. The past investment performance of the Manager or the Investment Manager cannot be construed as an indication of the future results of an investment in the Fund. The Fund is a newly established company with no track record upon which investors may base an evaluation. Although the Board will devote such time and effort as it determines to be reasonably required to implement the objectives of the Fund, there can be no guarantee that its undertaking will be successful.
  • Risks related to Short Selling - The Fund’s investment portfolio may include short positions. Short selling involves selling securities that may or may not be owned and borrowing the same securities for delivery to the purchaser, with an obligation to replace the borrowed securities at a later date. Short selling allows the investor to profit from a decline in the price of a particular security. A short sale creates the risk of an unlimited loss, in that the price of the underlying security could theoretically increase without limit, thus increasing the cost to the Fund of buying those securities to cover the short position. There can be no assurance that the security necessary to cover the short position will be available for purchase. Purchasing securities to close out the short position can itself cause the price of the securities to rise further, thereby exacerbating the loss. In addition, if a sufficient number of market participants have entered into a short position, the short position may not react in the same way as a security would with no or limited short interest. In the case of a market downturn the short position may therefore not provide the investment return the Investment Manager expected.
  • Prime Broker/Counterparty Risk - The Fund may appoint one or more Prime Brokers or Counterparties. With respect to the Fund’s right to the return of assets equivalent to investments of the Fund which a Prime Broker (if any) borrows, lends or otherwise uses for its own purposes, the Fund will rank as one of the Prime Broker’s unsecured creditors and, in the event of the insolvency of the Prime Broker, the Fund might not be able to recover such equivalent assets in full.
  • Investment risk - whilst the Fund aims to deliver above zero performance irrespective of market conditions, there can be no guarantee this aim will be achieved. Furthermore the Fund may exceed its volatility limit. A capital loss of some or all of the amount invested may occur.
  • 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.
  • Company shares (i.e. equities) risk -  the value of Company shares and similar investments may go down as well as up in response to the performance of individual companies and can be affected by daily stock market movements and general market conditions. 
  • Stock Connect risk - the Fund may invest in China A-Shares through the China-Hong Kong Stock Connect (“Stock Connect”). Stock Connect is governed by regulations which are untested and subject to change. Trading limitations and restrictions on foreign ownership may constrain the Fund's ability to pursue its investment strategy.

For a more detailed explanation of risks, please refer to the "Risk Factors" section of the offering memorandum.

Jupiter Gold & Silver Fund

  • Currency risk - the Fund is denominated in USD but may hold assets denominated in, or with exposure to, other currencies. The value of your shares may rise and fall as a result of exchange rate movements.
  • Sector concentration risk - the Fund's investments are concentrated in natural resource companies, and may be subject to a greater degree of risk and volatility than a fund following a more diversified strategy. Silver tends to outperform gold in a rising gold price environment and it tends to underperform gold when sentiment moves against the sector.
  • Investment risk - there is no guarantee that the Fund will achieve its objective. A capital loss of some or all of the amount invested may occur.
  • Concentration risk (number of investments) - the Fund may at times hold a smaller number of investments, and therefore a fall in the value of a single investment may have a greater impact on the Fund's value than if it held a larger number of investments.
  • Derivative risk - the Fund may use derivatives to generate returns as well as to reduce costs and/or 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.
  • Strategy risk - as the Fund invests in other collective investment schemes, which themselves invest in assets such as bonds, company shares, cash and currencies, it will be subject to the collective risks of these other funds. This may include emerging markets risk and smaller companies risk.
  • 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.
  • Company shares (i.e. equities) risk - the value of Company shares and similar investments may go down as well as up in response to the performance of individual companies and can be affected by daily stock market movements and general market conditions.
  • Smaller companies risk - smaller companies are subject to greater risk and reward potential. Investments may be volatile or difficult to buy or sell.

For a more detailed explanation of risks, please refer to the "Risk Factors" section of the prospectus.

Jupiter Strategic Absolute Return Bond Fund

  • 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.
  • 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.
  • 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.
  • 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.
  • 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.
  • 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.

For a more detailed explanation of risks, please refer to the "Risk Factors" section of the prospectus.

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. The fund may be subject to other risk factors, please see the Prospectus for further information.




Important Information

This is a marketing communication. Please refer to the latest sales prospectus of the sub-fund and to the Key Information Document (KID) (for investors in the EU)/ Key Investor Information Document (KIID) (for investors in the UK), particularly to the sub-fund’s investment objective and characteristics including those related to ESG (if applicable), before making any final investment decisions.

  • Europe: This webpage relates to a Cayman Islands-domiciled Alternative Investment Fund (AIF) which is not subject to the supervision of any EU member state. This webpage is intended solely for professional investors, as defined under the Alternative Investment Fund Managers Directive (AIFMD) and offered only in a limited number of jurisdictions.
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An investment constitutes the acquisition of shares in the sub-fund, not in the sub-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 communication 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. Company/Holding/Stock examples are for illustrative purposes only and are not a recommendation to buy or sell. Quoted yields are not a guide or guarantee for the expected level of distributions to be received. The yield may fluctuate significantly during times of extreme market and economic volatility. Awards and Ratings should not be taken as a recommendation. Every effort is made to ensure the accuracy of the information provided but no assurance or warranties are given. This is not an invitation to subscribe for shares in the Jupiter Asset Management Series plc (the Company). The Company is 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 sub fund may be subject to various other risk factors, please refer to the latest Prospectus for further information. Prospective purchasers of shares of the sub fund of the Company should inform themselves as to the legal requirements, exchange control regulations and applicable taxes in the countries of their respective citizenship, residence or domicile. Subscriptions can only be made on the basis of the latest Prospectus and the Key Information Document (KID/ Key Investor Information Document (KIID), accompanied by the most recent audited annual report and semi-annual report. These documents are available for download from www.jupiteram.com. The Manager may terminate marketing arrangements. Information on sustainability-related aspects is available from www.jupiteram.com

For investors in Singapore

Please note that Jupiter Merian Global Equity Absolute Return Fund (GEAR), Jupiter Gold & Silver Fund and Jupiter Strategic Absolute Return Bond Fund (SARB) have been entered into the List of Restricted Schemes by Monetary Authority of Singapore) as defined in regulation 2 of the Securities and Futures (Offers of Investments) (Collective Investment Schemes) Regulations 2005) under paragraph 3 or 4 of the Sixth Schedule of the Regulations. This document is not to be distributed to the retail public of Singapore.

The document is prepared for the use of existing investors of the Fund for information purposes only. Please make sure that this document is included as part of the Information Memorandum of the Fund and distributed in a bundle if it is intended to be used as an offering document to new investors of the Fund.

If you did not obtain this document through your relationship manager, please dispose of it immediately as the information contained in this document may not be up to date, and it may not be legal for you to be provided this document or to subscribe for shares in the Sub-fund. Please contact your relationship manager for further assistance.

This document has not been registered as a prospectus with the Monetary Authority of Singapore pursuant to the exemptions under Sections 304 and 305 of the SFA. Accordingly, this document may not be circulated or distributed, nor may the Securities be offered or sold, whether directly or indirectly, to any person in Singapore other than (i) to an institutional investor pursuant to Section 304 of the SFA, (ii) to an accredited investor or other relevant person, or any person pursuant to Section 305(2) of the SFA, and in accordance with the conditions specified in Section 305 of the SFA or (iii) otherwise pursuant to, and in accordance with the conditions of, any other applicable provision of the SFA.

Jupiter Asset Management Limited, registered address: The Zig Zag Building, 70 Victoria Street, London, SW1E 6SQ is authorised and regulated by the Financial Conduct Authority whose address is 12 Endeavour Square London E20 1JN. This document is intended for Singapore institutional professionals/accredited investors and not for the benefit of private retail investors. However anyone attending the presentation or who has the opportunity to view the accompanying slides should bear in mind that the value of an investment in a fund and the income from it can go down as well as up. It may be affected by exchange rate variations and you may not get back the amount invested. Initial charges are likely to have a greater proportionate effect on returns if investments are liquidated in the shorter term. Quoted yields are not guaranteed. Past performance should not be seen as a guide to future performance. No information in this document should be interpreted as investment advice and it is not an invitation to subscribe for shares of Jupiter managed funds. Any holdings and stock examples are used for illustrative purposes only. The views expressed are those of the presenter at the time of preparation and may change in the future. If you are unsure of the suitability of this investment please contact your Financial Adviser. Please ensure you read the Prospectus (including the Singapore Addendum) for this Fund before making an investment decision. These documents contain important information including risk factors, details of charges and selling restrictions.