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Jupiter Income Fund research update

Investments can go down as well as up so there is always a danger that you could get back less than you invest. Nothing here is personalised advice, if unsure you should seek advice.

In the current low-interest rate environment, investors have looked to purchase shares in high-quality, high-yielding companies. This heightened demand has helped push up share prices and Ben Whitmore, manager of the Jupiter Income Fund, believes many stocks with these characteristics are now overvalued.

As a contrarian investor, he seeks out of favour companies whose shares he believes are under-priced, despite them being well-run and having sound balance sheets. As such, he has taken profits from stocks such as medical device business Smith & Nephew, which he feels is no longer attractively priced, in favour of unloved stocks such as Tesco and Centrica.

Ben Whitmore began managing the fund in January 2013. Since this time, it has returned 35.51% compared with 33.7% for the IA UK Equity Income sector and 25.8%* for the FTSE All Share Index. The fund currently yields an attractive 3.8% which is variable and not guaranteed and past performance is not a guide to future returns.

Performance of the Jupiter Income Fund over the manager's tenure

Annual percentage growth
Apr 10 -
Apr 11
Apr 11 -
Apr 12
Apr 12 -
Apr 13
Apr 13 -
Apr 14
Apr 14 -
Apr 15
Jupiter Income 7.32% 1.76% 16.52% 10.22% 10.36%
IA UK Equity Income 9.19% 2.15% 18.68% 12.99% 7.63%
FTSE All-Share 9.2% 1.47% 16.17% 8.43% 6.2%

Our analysis suggests the fund's outperformance is due to the manager's successful sector positioning and stock picking. He has made use of his ability to invest overseas and his recent stock selections within the technology, pharmaceuticals and financial services sectors have been particularly good. The fund's holdings in AstraZeneca; US firm Hewlett Packard; and European publishing firm Wolters Kluwer, have all had a positive impact on returns. The fund's performance was also helped by the manager's avoidance of companies within the basic materials sector as many have struggled amid falling commodity prices.

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Our view on this fund

Ben Whitmore has managed the Jupiter Income Fund for just over two years, though he has built a considerably longer track record in managing the Jupiter UK Special Situations Fund. Although the main objective of the Jupiter UK Special Situations Fund is to focus on capital growth rather than income, he applies the same investment approach to both funds. His style means he naturally favours dividend-paying companies, which he believes plays an important part in overall total returns. The fund operates a concentrated portfolio, currently at 54 holdings, which enables each to make a significant impact on returns but this is a higher risk approach.

We rate Ben Whitmore highly and his performance has so far been encouraging; however, we would prefer to further monitor his ability at running an income fund before considering it for inclusion on the Wealth 150 list of our favourite funds across the major sectors.

Please note the fund's charges can be taken from capital, which can increase the yield but reduces the potential for capital growth.

Find out more about this fund including how to invest

Please read the key features/key investor information document in addition to the information above.

The value of investments can go down as well as up, this means you could get back less than you invested. Therefore all investments should be regarded with a long term view. No news or research item is a personal recommendation to deal. If you are unsure about the suitability of an investment please contact us for advice.
Important information - Please remember the value of investments, and any income from them, can fall as well as rise so you could get back less than you invest. This article is provided to help you make your own investment decisions, it is not advice. If you are unsure of the suitability of an investment for your circumstances please seek advice. No news or research item is a personal recommendation to deal.

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