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Alpha generation through appropriate risk positioning
The sterling corporate bond universe is not homogeneous, so recognising and respecting the wide dispersion in risk/return characteristics within the market is key to generating sustainable alpha over time. The Jupiter Corporate Bond Fund is style agnostic, guided by the fund managers’ in-depth assessment of the macro environment and bottom-up fundamental credit analysis. The fund managers place an emphasis on being active, pragmatic and risk aware in their search for strong risk-adjusted returns.
Disciplined and flexible
The fund’s investment process begins with an assessment of the global macroeconomic landscape and combines this “top down” framework with detailed credit analysis on each bond issuer. The process is both holistic and highly repeatable, with the aim of ensuring optimal fund positioning throughout the market cycle.
Active and pragmatic
The fund managers take a high conviction, active approach to managing the fund. They use duration and credit exposure as they sweat the asset class in search of strong risk-adjusted returns. The fund managers look to avoid dogmatism – they are not inherently aggressive or defensive investors, instead striving to ensure that the fund’s positioning adapts to their assessment of an ever-changing economic landscape.
Risk management is at the heart of the fund’s investment process. The fund managers focus on in-depth credit research to understand business and financial risks, believing that minimising the risk of permanent capital loss is key to generating sustainable returns for investors.
Core to the fund’s investment process is therefore (i) the identification of issuers with robust business models where the credit profile will improve further going forward, and (ii) the avoidance of those companies where the credit profile is at risk of further deterioration.
In addition to understanding the underlying credit risks, the fund managers focus on liquidity and market technical factors to ensure that fund positioning can be rotated as necessary.
The fund can invest up to 20% in non-rated bonds. These bonds may offer a higher income but carry a greater risk, particularly in volatile markets. In difficult market conditions, it may be harder for the manager to sell assets at the quoted price, which could have a negative impact on performance. The fund may use derivatives which may result in large fluctuations in the value of the fund. Counterparty risk may cause losses to the fund. In extreme market conditions, the Fund’s ability to meet redemption requests on demand may be affected. The Key Investor Information Document, Supplementary Information Document and Scheme Particulars are available from Jupiter on request. This fund can invest more than 35% of its value in securities issued or guaranteed by an EEA state. 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.
Meet the team
The Jupiter Corporate Bond Fund has been jointly managed by Harry Richards and Adam Darling since April 2018. The pair bring complementary skills to credit portfolio management, combining detailed analysis on corporates and their capital structures, with a deep understanding of the macro environment. Harry and Adam have significant credit research resources at their disposal, while benefiting from the holistic view of global fixed income markets that comes from being part of Jupiter’s broader fixed income team.
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