Decisive in the face of uncertainty
Harry Richards and Adam Darling take a deep dive into how they manage the Jupiter Corporate Bond Fund with an approach that is active, pragmatic and risk aware.
Plainly that repricing of risk happened more quickly than we had anticipated as the pandemic wrought considerable economic damage across the globe. But it also became clear to us, after credit spreads dramatically widened in March, that governments and central banks would move swiftly to shore up confidence, support economies and credit markets in particular. Given our cautious positioning and strong fund liquidity, we had the ability and conviction to take advantage of market dislocation and buy bonds at prices that we felt over the course of a cycle would prove to be excellent value for the fund.
Credit spread evolution
Covid-19 sell off presented attractive opportunities to add spread risk
Source: Bloomberg, as at 31.07.2020
We are part of a large, fixed income team at Jupiter, covering the whole global bond universe. This team dynamic is invaluable in helping us to monitor the global macroeconomic backdrop, understanding the rates cycle and appreciating the broad credit trends in the market. That top-down macro context is combined with our bottom-up intensive credit research that gives us conviction on which companies to own. We both have a strong background in high yield credit research, where due diligence is absolutely paramount, and we apply those principles just as stringently to investment grade credit.
Past performance is no guide to the future. Source: Fund and sector returns from FE FundInfo, in GBP, from 30.04.18 to 31.12.20; ICE BofA Sterling Corporate Index spread to worst from Bloomberg. Fund performance data is calculated on a NAV to NAV or bid to NAV basis dependent on the period of reporting, all performance is net of fees with net income reinvested. Target benchmark: IA Sterling Corporate Bond. Note: Alpha is the difference between return of fund and the sector.
Performance
% | YTD | 1 month | 3 months | 1 year | 3 years | 5 years | Since inception* |
---|---|---|---|---|---|---|---|
Jupiter Corporate Bond I Acc | 12.6 | 1.2 | 3.9 | 12.6 | 22.4 | 36.2 | 206.5 |
IA Sterling Corporate Bond | 7.9 | 1.3 | 3.3 | 7.9 | 15.5 | 32.4 | 180.2 |
Quartiles | 1st | 3rd | 2nd | 1st | 1st | 2nd | 2nd |
Rolling performance
% | 01 Jan ’16 to 31 Dec ’16 | 01 Jan ’17 to 31 Dec ’17 | 01 Jan ’18 to 31 Dec ’18 | 01 Jan ’19 to 31 Dec ’19 | 01 Jan ’20 to 31 Dec ’20 | Fund manager inception** |
---|---|---|---|---|---|---|
Jupiter Corporate Bond I Acc | 7.6 | 3.4 | -1.5 | 10.5 | 12.6 | 24.4 |
IA Sterling Corporate Bond | 9.0 | 5.1 | -2.2 | 9.5 | 7.9 | 17.1 |
Quartiles | 4th | 4th | 1st | 2nd | 1st | 1st |
Risk metrics
Sharpe ratio*** | Sortino ratio*** | |
---|---|---|
Jupiter Corporate Bond I Acc | 1.31 | 1.20 |
Sector ranking | 1/93 | 3/93 |
Important information