Talking factsheet: Sovereign Debt Strategy

Vikram Aggarwal gives an overview of Jupiter’s sovereign debt strategy, how the investment process works, and how the team seek to generate alpha.

Jupiter Global Sovereign Opportunities

Rethinking government bond investments

Our aim when investing in sovereign fixed income is to deliver superior returns versus global sovereign bonds with a similar degree of volatility.

Why invest in Jupiter Global Sovereign Opportunities

Fulfilling the traditional role of sovereign bonds

2. Where are sovereign opportunities?

3. Investment philosophy

Our philosophy when investing in sovereign fixed income

Investment Philosophy

4. Investment process

Unconstrained instrument selection across “Country Complex”

5. Investment toolkit

Typical trades

6. Geopolitically-aware fund

Positioning for the New World Order

 

  • We believe that the unipolar world order has changed to a bi- or multi-polar world order
  • Sovereign fixed income universe is unique as it provides directly-correlated investment instruments to position for geopolitical events
  • Identifying geopolitical (tail-)risks is a natural by-product of our investment process
  • We seek to hedge against or position for these risks, which are often non-linear
  • We often implement this via credit-default-swaps (CDS) – these are effectively put options on the underlying bond(s), offering asymmetric payoff structures
  • Our aim is to achieve portfolio resilience

Fund specific risks

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. Investors should carefully read the Prospectus and the Key Investor Information Document (KIID) before making an investment decision. The fund can invest a significant portion of the portfolio in high yield bonds and bonds which are not rated by a credit rating agency. While such bonds may offer a higher income, the interest paid on them and their capital value is at greater risk of not being repaid, particularly during periods of changing market conditions. The value of quarterly income payments will fluctuate. In difficult market conditions, reduced liquidity in bond markets may make it harder for the manager to sell assets at the quoted price. This could have a negative impact on the value of your investment. In extreme market conditions, certain assets may become hard to sell in a timely manner or at a fair price. This could affect the Fund’s ability to meet investors’ redemption requests upon demand. Some share classes charge all of their expenses to capital, which can reduce the potential for capital growth. Please see the Prospectus for information. The KIID and Prospectus 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. For definitions please see the glossary of this factsheet or at www.jupiteram.com.

For a more detailed explanation of risk factors, please refer to the “Risk Factors” section of the Scheme Particulars.

This is a marketing communication. Investors should carefully read the Key Investor Information Document (KIID), Supplementary Information Document (SID) and Scheme Particulars, particularly to the fund’s investment objective and characteristics including those related to ESG (if applicable), before making any final investment decisions. These are available from the document library.

Important information

This document is intended for investment professionals and is not for the use or benefit of other persons, including retail investors. 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. Past performance is no guide to the future. The views expressed are those of the Fund Manager(s) 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 any information provided but no assurances or warranties are given. Holding examples 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. Issued by Jupiter Unit Trust Managers Limited (JUTM), registered address: The Zig Zag Building, 70 Victoria Street, London, SW1E 6SQ which is authorised and regulated by the Financial Conduct Authority. No part of this document may be reproduced in any manner without the prior permission of JUTM. 28032