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Jupiter launches Enhanced Distribution Fund for income-seeking investors


Jupiter has launched the Juliter Enhanced Distribution Fund, managed by the investment team of Alastair Gunn and Rhys Petheram.

The mixed-asset unit trust will invest in a mix of stocks and bonds and aims to provide a monthly income with the prospect of capital growth over the long term. Jupiter believes this Fund may appeal to investors seeking regular income following retirement, or those looking for capital growth through accumulated income.
Fund managers Gunn and Petheram, who have more than 40 years of combined market experience, will run the new Fund in a similar way to the Jupiter Distribution Fund and the Jupiter High Income Fund, two other mixed-asset funds which they have co-managed with great success on behalf of investors – under their watch, the GBP584m Jupiter Distribution Fund has outperformed its peers over one, three and five years. Over five years, it has delivered a return of 40.9 per cent against an average sector return of 24.9 per cent. The GBP538m Jupiter High Income Fund, which Alastair has co-managed since July 2013, first with Jupiter manager Ariel Bezalel and from January 2014 with Rhys Petheram has delivered a return of 11.0 per cent over 12 months versus a peer average of 7.3 per cent[5].
Central to the managers’ investment approach is the integration of the fixed income and equity research and selection process into one, consistent investment view.  Alastair, as the equities specialist and Rhys, as the expert in fixed income, work closely together to develop a co-ordinated view of the economy, individual companies and their industries. Investment decisions are made based on thorough company analysis and can result in an investment in a company’s bonds, equity or both. 
The split between stocks and bonds in the Jupiter Enhanced Distribution Fund will be flexible although the managers will generally seek to hold around 60 per cent in fixed income, such as corporate and government bonds, and 40 per cent in stocks. Cash will be held when considered appropriate. It will sit in the Investment Association’s (IA) Mixed Investment 20-60 per cent Shares sector.
The managers believe this approach can help the Fund deliver an estimated yield, of around 4.0 per cent. The income will be paid on a monthly basis, making it relevant to people planning for or moving into retirement, but not exclusively so.
In the managers’ view, this yield figure is achievable and sustainable without incurring undue capital risk to the portfolio.  In practice, the bond exposure of the portfolio should offer a regular income while providing a degree of stability in weak or volatile markets while the equity element of the Fund should be responsible for delivering the Fund’s prospect of capital growth over the long term.
Stephen Pearson (pictured), Head of Investments for Jupiter, says: “Jupiter has long-acknowledged skills in managing multi-asset funds both through multi-manager solutions and through single funds that invest in mixed assets. With two talented managers at the helm, a competitive fee structure and a monthly income, we believe that the Jupiter Enhanced Distribution Fund should quickly make its mark with advisers and investors. The new fund complements our mixed asset product range, sitting between the lower risk Jupiter Distribution Fund aimed at cautious investors, and the Jupiter High Income Fund, with its higher risk profile due to its greater stock exposure.”

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