THE FACTS. Guide to Jupiter Asian Income Fund ON THE PLANET TO PERFORM. On the planet to perform

Transcription

1 THE FACTS Guide to Jupiter Asian Income Fund ON THE PLANET TO PERFORM On the planet to perform

2 CONTENTS Why invest in Asia if seeking income? 3 The Jupiter Asian Income Fund 4 Investment process 5 Asset allocation 7 Risk management 8 Typical investor profile 8 Fund risks 8 Meet the Fund Manager 9 Important information 10 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. ACTIVE INVESTING

3 WELCOME We are delighted that you are interested in finding out more about the Jupiter Asian Income Fund. In this brochure we have provided you with information about investing for income and capital growth over the long term within the Fund. This document is for informational purposes only and is not investment advice. We recommend you discuss any investment decision with a financial adviser, particularly if you are unsure whether an investment is suitable, as Jupiter is unable to provide investment advice. Investment expertise Jupiter s investment approach revolves around one concept: seeking to optimise performance over the medium to long term without exposing our investors to unnecessary risk. We believe that talented fund managers perform best if they are given the freedom to invest as they see fit, subject to the constraints set by each fund s objective. We allow our managers to follow their strongest ideas, selecting what they believe to be the best opportunities the market has to offer. Our history Jupiter was founded in 1985 and has since become an established fund management group within the UK. From our origins as a manager primarily of investment trust and private client portfolios, we expanded into institutional fund management before mutual funds became the key engine of growth. In 2007, Jupiter s employees bought the Jupiter Group from its parent company Commerzbank through a management buyout supported by private equity firm TA Associates, and other minority investors. In June 2010 Jupiter listed on the London Stock Exchange. Many of our fund managers and other employees continue to hold shares in the Company and in addition, we encourage our fund managers to invest their own money into their own Jupiter funds, helping to create what we believe to be a stable environment in which the interests of our fund managers and other employees are aligned with those of our customers. The fund invests a significant portion of the portfolio in developing geographic markets where there is a greater risk of volatility due to political and economic change, fees and expenses tend to be higher than in western markets. These markets are typically less liquid, with trading and settlement systems that are generally less reliable than in developed markets, which may result in large price movements or losses to the fund. This fund invests mainly in shares and it is likely to experience fluctuations in price which are larger than funds that invest only in bonds and/or cash. The value of quarterly income payments will fluctuate. All of the fund s expenses are charged to capital, which can reduce the potential for capital growth. The Key Investor Information Document, Supplementary Information Document and Scheme Particulars are available from Jupiter on request. JUPITERAM.COM 01

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5 WHY INVEST IN ASIA IF SEEKING INCOME? For experienced investors seeking income and capital growth over the long term, the Asia Pacific region has become an increasingly attractive part of a diversified global portfolio, for the following reasons: Over the last ten years in the Asia Pacific region there has been a clear trend of companies returning profits to their investors through a regular dividend pay-out. This dividend paying culture together with a growing universe of income paying stocks, has led to appealing yields to be found across the region. The Asia Pacific region can offer a wide range of opportunities for investors to access countries at varying stages of economic development. As the region includes countries that are developing this can add an extra element of risk compared to investing in more developed regions. Nevertheless, many investors recognise the potential benefits of allocating a proportion of their long-term portfolios to this region. The Asia Pacific region generally has more favourable demographics than most Western economies. Nevertheless, populations are still ageing which has led local investment institutions to encourage companies to pay dividends to their investors. Development of trade within Asian countries for traditional manufactured goods and commodities, such as oil and gas, as well as the more recent impact of a growing service sector, can make the Asia Pacific region a diverse ground for dividend paying companies. JUPITERAM.COM 03

6 THE JUPITER ASIAN INCOME FUND The Manager The Jupiter Asian Income Fund is an actively managed fund that invests in the Asia Pacific region including Australia and New Zealand but excluding Japan. Fund objective: To generate income and capital growth over the long term. The fund manager aims to achieve the objective by investing primarily in equities (i.e. shares) and similar securities of companies listed or located in the Asia Pacific region (including Australia and New Zealand) excluding Japan. The key points of the fund are: It is managed by one of the UK s most experienced Asian Equity managers, with over 20 years of investing in the region. Jason Pidcock, the fund manager, has significant knowledge of the companies that make up this dynamic region. He also has access to the knowledge and expertise of Jupiter s wider emerging markets team and the broader skills of the global equity team. Jason Pidcock Head of Strategy, Asian Income Aiming to avoid unnecessary risk plays an important part in the manager s investment process. Jason employs an active approach and he tends to focus on the stock of larger, more liquid companies, those whose shares can be easily traded on a stock exchange. Jason tends to favour more developed markets within the region, although he may invest a significant portion of the portfolio in developing markets which carry a higher level of risk. Jason seeks opportunities where company valuations look compelling and where there is a commitment by a business to return profits by paying dividends to their investors when reasonable to do so. 04 ACTIVE INVESTING

7 Diversified: The fund manager has the flexibility to invest across the market, within the fund s designated sector limits*. Typically the fund will invest in stocks across different markets at any one time. Investing in the Asia Pacific (excluding Japan) region, the fund can provide access to both developed and developing markets; however it is intended that a majority of the Fund will be invested in developed markets. Comprehensive research: As well as reviewing the macroeconomic environment across the region, the fund manager conducts his own research through regular company meetings and uses the research of the wider Jupiter team and external analysts to build a picture of where a company is positioned in its market to inform investment decisions. Income generating: The fund distributes income quarterly. The estimated gross yield is approximately 4.2%**. Yield is the income return on an investment. In the case of this fund the income will come from dividends. Please note that estimated yields are not guaranteed and may change in the future. Capital growth: While seeking to deliver a competitive income for the fund, the manager may also invest in company stocks that may have a relatively low yield but which the manager believes can provide capital growth across the portfolio. Risk management: Is built into the manager s investment process. (for more details, please see page 8) *The fund sits within the Investment Association (IA) Asia Pacific ex-japan sector, which features funds that invest at least 80% of their assets in Asia Pacific equities, but excluding Japanese equities. (for more details, please see page 7) ** The estimated gross yield reflects the amount that may be expected to be distributed over the next twelve months as a percentage of the mid-market unit price of the fund. This is based on the benchmark (FTSE World Asia Pacific ex Japan index) yield of 3.3% at It is estimated as the fund has insufficient dividend history to calculate an historic yield. Preliminary charges are not included and investors may be subject to tax on distributions. Estimated yields are not guaranteed and may change in the future. Investment process The Jupiter Asian Income fund benefits from the fund manager s deep knowledge of Asia Pacific stocks, which have the potential to offer attractive returns. By doing so, and to balance the risk, the manager brings together a portfolio of his strongest ideas drawn from across the Asia Pacific ex Japan region. The fund is not restricted to certain countries or sectors within the Asia Pacific region, so the manager can select, in his opinion, the best companies in the best countries. The fund manager, Jason Pidcock, runs a reasonably concentrated portfolio of typically high-quality, easy to trade stocks, which he looks to hold for the long term. As a result, the fund typically has a low turnover of stocks. The basis of Jason s investment process is research and analysis. His experience means he has a good understanding of the region, the variations between each of the countries and sectors, as well as the wider political and economic environments. He also has good access to companies in the region and the ability to conduct first hand research. Much of Jason s research time is spent reading; focusing on things such as news stories, company reports and in depth material of specialist topics. Jason will also use research from external analysts to inform investment decisions, as well as taking advantage of the wider emerging market and global equity teams at Jupiter. Stock selection The manager looks to invest in businesses which in his opinion have the ability to grow at an enduring rate, where the price of the stock is compelling and there is a commitment to passing on profits to shareholders through dividends. The manager looks to thoroughly understand a company s revenue stream. This means understanding not only what it is selling and to whom, but how revenues come in, what happens to the money when it is inside the company, how it leaves the company and what proportion ends up being paid as dividends to shareholders. While seeking to deliver an attractive yield, the manager may also invest in company stocks that may have a relatively low yield but which the manager believes can provide capital growth within the portfolio. Understanding both existing and potential investments is vital to the success of the fund s strategy and Jason maintains regular visits and contact with company management teams. A couple of decades in the industry have given him a deep knowledge of Asia s strongest businesses, as well as established communications channels with their management teams. His assessment of management teams is based on three basic criteria: honesty, ambition and ability. Possession of all three qualities is a fundamental requirement for investment. JUPITERAM.COM 05

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9 ASSET ALLOCATION The fund manager has the ability to invest across the region, within the fund s designated sector limits, set out by the Investment Association Asia Pacific ex Japan sector. The fund comprises typically stocks across approximately 10 different countries at any one time. As an active fund manager, Jason can focus on investments that he believes offer the best potential returns within a diversified portfolio. Jason employs an active approach to fund management rather than a passive approach. Active managers focus on choosing investments in which they have the highest belief, in effect they choose investments which they believe are most suitable for the fund. Passive management involves holding investments that attempt to replicate an index, such as the FTSE All Share Index. So unlike a passive strategy, Jason will not hold a security solely because it is a large constituent of the fund s benchmark (FTSE World Asia Pacific ex Japan index). Investing in the Asia Pacific (excluding Japan) region, the fund can provide access to both developed and developing countries; however Jason favours more developed countries. Potential countries include Australia, New Zealand and Singapore together with Hong Kong, Taiwan, South Korea, Malaysia, Thailand and the Philippines. The region provides a diverse investible universe across all major industrial, financial and consumer sectors. You may be wondering why the fund does not invest in Japan. This is because the Investment Association (IA) sector that the fund sits in excludes Japanese equities, Japan has its own independent IA sector. Portfolio Holdings - example allocations Australia New Zealand Hong Kong South Korea Malaysia Philippines Singapore Taiwan Thailand Cash For illustrative purposes only, not guarnateed and may change in the future. Example holding: The case for Australia Australia s demographics are favourable. It has the advantage of being a stable, English-speaking country that lacks the government debt problems of some of its peers. Its political stability compares favourably with those countries that are high producers of raw materials, for instance in the Middle East or Russia. But crucially, in Jason s view, it is also host to some appealing domestic-oriented businesses that often offer the likelihood of growth and higher regular dividend pay-outs. JUPITERAM.COM 07

10 RISK MANAGEMENT Risk management is built into the manager s investment process. The manager considers potential market scenarios with the aim to ensure the portfolio performs in a variety of different circumstances. This process can act as a natural limit on the concentration of stocks within a particular country or sector. For example, if the fund manager believes the 10 best companies are in one particular sector in just one country he will not focus all his investment there as this may increase risk through a lack of geographical and sector diversification. Risk management Jupiter s three lines of Defence The Manager aims to avoid investing in countries where there are significant risks relating to state, political or social structure factors that can cause unpredictable disruptions to businesses. The fund manager is encouraged to pursue outperformance through Jupiter s active fund management culture. He does this in line with a risk management policy that coordinates closely with Jupiter s risk management team in assessing the portfolio on a regular basis as part of the risk management process. Independent risk oversight is also conducted under Jupiter s risk management process, which is overseen by the Board. The Compliance department provides oversight of the portfolio in line with UCITS directive. 1. Risk owner Individual Fund Manager Charles River, Beauchamp, Bloomberg Port, Investment Restrictions 2. Oversight Daily, weekly, monthly, quarterly reports Independent in-house monitoring RiskMetrics / FactSet / Barra Chaired by head of risk monthly meeting Chaired by CIO quarterly meeting Counterparty review committee Portfolio review committee Risk assessment Risk tolerance thresholds Policy & procedure Chaired by CFO quarterly meeting Risk MGT committee Compliance review 3. Independent review Internal audit review Audit Committee INVESTOR CONSIDERATIONS Typical investor profile The Jupiter Asian Income Fund may be suitable for those investors who are: Looking to invest in equities primarily located in the Asia Pacific region (including Australia and New Zealand) excluding Japan. Seeking geographical diversification potential within Asia through exposure to both moredeveloped and developing countries (emerging markets). Prepared to accept the risks associated with investing in the Asia Pacific region within their portfolios. Fund risks The Jupiter Asian Income Fund has the following fund risks: The fund invests a significant portion of the portfolio in developing geographic markets where there is a greater risk of volatility due to political and economic change. Fees and expenses tend to be higher than investing in western markets. Developing geographic markets are typically less liquid, with trading and settlement systems that are generally less reliable than in developed markets, which may Source: Jupiter risk management process as at result in large price movements or losses to the fund. This fund invests mainly in shares and it is likely to experience fluctuations in price which are larger than funds that invest only in bonds and/or cash. The value of quarterly income payments will fluctuate. All of the fund s expenses are charged to capital, which can reduce the potential for capital growth. 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. 08 ACTIVE INVESTING

11 THE JUPITER TEAM Head of Strategy, Asian Income Global team Stephen Mitchell Head of Strategy, Global Guy de Blonay Jupiter Financial Opportunities Fund Stuart Cox Global Emerging Markets team Ross Teverson Head of Strategy, Emerging Markets Avinash Vazirani Jupiter India Fund Franklin Adatsi Emerging Markets Ben Surtees Jupiter Asian Fund Colin Croft Jupiter Emerging European Opportunities Fund Amélie Thévenet Emerging Markets Charles Sunnucks Emerging Markets The Fund Manager: Jason Pidcock joined Jupiter in November 2015 to build an Asian Income strategy and manages the new Jupiter Asian Income Fund. Jason brings over 20 years experience investing in the Asia Pacific (ex Japan) region, 12 of which were focused on income generation as part of the overall strategy of creating income and growth of capital. Prior to Jupiter, Jason ran the Newton Asian Income Fund from its launch in Before joining Newton in 2004, Jason was responsible for stock selection and asset allocation in the Asia ex-japan region for the BP Pension Fund. Prior to that, he worked at Henderson Asset Management for more than two years as an assistant fund manager. JUPITERAM.COM 09

12 In need of advice We recommend you discuss any investment decisions with your financial adviser as Jupiter is unable to provide investment advice. If you do not have a financial adviser, we have included the details of two organisations that can help you find one. Findanadviser.org The personal Finance Society provides a free search service designed to help you find a local professional financial adviser. Website: Address: Personal Finance Society 20 Aldermanbury Londo, EC2V 7HY Unbiased.co.uk You can confidentially search for details of a local financial adviser by using the online Search for a financial adviser facility. Website: Address: Unbiased Ltd 2nd Floor 117 Farringdon Road London, EC1R 3BX Contact us Please do not hesitate to contact us if you require more information or would like to be sent further literature. Tel: (0) Fax: (0) Web: Jupiter Customer Services Department PO Box Chelmsford, CM99 2BG For your security we may record or randomly monitor all telephone calls. Further details and downloadable literature (including application forms) can be found by visiting: Important information: 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 at the time of preparation, 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. Jupiter Unit Trust Managers Limited (JUTM) and Jupiter Asset Management Limited (JAM), registered address: The Zig Zag Building, 70 Victoria Street, London SW1E 6SQ 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 and/or JAM