Jupiter Strategic Bond: September 2026 fund update

• Fund managers Ariel Bezalel and Harry Richards have decades of experience of investing in bond markets

• The fund is diversified across different types of bonds

• The management style means that the fund could see more ups and downs compared to peers

• This fund is on our Wealth Shortlist of funds chosen by our analysts for their long-term performance potential

How it fits in a portfolio

The Jupiter Strategic Bond fund aims to generate a combination of income and capital growth and outperform the IA £ Strategic Bond sector average over the long term. The fund invests in different types of bonds from all over the world, meaning that it could be used as the foundation for the bond portion of a portfolio or could add some diversification to a portfolio focused on shares. However, investors should be aware that the managers’ investment style means that this fund can experience more ups and downs than peers.

Manager

The fund is co-managed by Ariel Bezalel and Harry Richards. We think that Bezalel is a talented and experienced bond manager who has added value for investors compared to the peer group since the fund launched in 2008. He has managed the fund since inception and has worked at Jupiter since 1997.

Bezalel was joined by Richards in 2013 when he began working on the fund as an analyst. He became assistant fund manager in 2016 and co-manager in May 2018.

The managers also have other fixed income responsibilities. We’re comfortable that they have the support and resources to balance these commitments effectively.

Process

Bezalel and Richards analyse the state of the economy to help them decide where to invest. This includes the future direction of global interest rates to build up a picture of how different economies might evolve. The managers invest in bonds from around the world, though at least 70% of the fund must invest in bonds that are bought and sold in British pound sterling or whose currency exposure is hedged back to sterling. They also use other derivatives, which increases risk.

Bezalel and Richards are willing to take more risks when they’re positive on markets. At times, they will increase their investments in higher-risk areas like emerging markets and high-yield bonds. Typically, at least 25% of the fund invests in high yield corporate bonds, which provide a high level of income. But when the outlook is less certain, they can be more defensive and invest more in government or higher quality corporate bonds.

In recent years, the managers have reduced investments in developed market government bonds in favour of emerging market government bonds (particularly those from Brazil, Mexico, Paraguay and South Africa) that they think are attractive compared with developed markets.

At the end of August 2026, the fund invested 40.5% in high yield corporate bonds, 19.9% in developed market government bonds and 21.1% in emerging market government and corporate bonds.

The fund’s duration currently stands at 5.9 years, down from a peak of 10.5 years at the end of January 2025. Duration is measured in years and reflects how sensitive the fund is to interest rate changes. The lower the duration value, the less sensitive the fund is to interest rate changes.

The fund has sold all its investments in US government bonds. The managers believe that stronger economic growth and persistent inflation in the US could keep borrowing costs higher for longer, which may put pressure on bond prices. They see better opportunities in the UK and Europe, where weaker economies could make further rate rises (and, therefore, price falls) less likely, and in Australia, where they believe that previous increases are already largely reflected in bond prices.

Culture

The fund managers at Jupiter are given autonomy to invest the way they see fit. They believe that this will benefit investors in the long run, but the autonomy comes with an appropriate level of challenge from others in the business. This business setup allows Bezalel and Richards to focus on fund management and their team and to maintain flexibility.

Fund managers at Jupiter are incentivised in line with the performance of their funds over various timeframes. We think that this aligns their interests with those of investors and helps the managers to focus on delivering strong performance for clients.

ESG Integration

Jupiter’s approach to ESG is fund manager led, so the fund managers themselves are responsible for implementing ESG in their investment decisions. They typically approach ESG issues with a materiality-based approach, meaning they focus on the ESG risks most material to each company. The firm also subscribes to several third-party data providers (including Sustainalytics, RepRisk, ISS and MSCI) which offer information that fund managers can use in their research. Where red flags are raised, the managers investigate. Fund managers work closely with central ESG experts on ESG integration, engagement, and proxy voting and the fund managers’ commitment to these topics is a consideration in their annual appraisals.

We like that engagement is not delegated to a separate department. Instead, the fund manager who made the decision to invest in the company leads engagement activity directly, allowing more meaningful and relevant engagement. More information about the firm’s ESG policies and engagement case studies can be found in its annual Stewardship report.

Bezalel and Richards have incorporated ESG factors into their analysis and have an ESG risk score for all bonds that they assess. They have also launched other funds with exclusions based on ESG criteria. It’s good to see the managers take ESG risks seriously and incorporate these into their bond selection. For this particular fund though, there are no limitations on what the fund can invest in.

Cost

The fund has an annual ongoing fund charge of 0.74%, but through HL you can secure an ongoing saving of 0.20%. This means you’ll pay an ongoing charge of 0.54%. Part of this reduction is paid as a loyalty bonus, which could be taxable if held outside of an ISA or SIPP wrapper.

The HL platform fee of up to 0.35% per year also applies, except in the HL Junior ISA, where no platform fee applies. Both a buy and sell instruction will be subject to HL dealing charges. Find out more about our charges.

Performance

The fund's flexible approach has meant that since inception in 2008 it has outperformed its peer group. Over this time, the fund has delivered a return of 132.2%** compared with a return of 127.2%* for the IA £ Strategic Bond peer group.

The flexibility afforded to the managers means the fund often performs differently to peers. For example, during the significant bond market falls in 2022, where the fund lost 15.58%* compared to the sector average fall of 11.73%. Past performance is not a guide to the future.

The underperformance in 2022 has held back performance compared with peers over five years to the end of August 2026. However, since the end of 2022, performance has been on an improving trend and over the 12 months to the end of August 2026, the fund has returned 5.4% compared to 3.8% for the IA £ Strategic Bond sector. It’s positive to see performance improving more recently.

So far in 2026, investments in high yield bonds have added most value for the fund. Emerging market bonds have also been particularly positive.

Although there are no guarantees how the fund will perform in future, Bezalel and Richards have significant experience in a sector where experience counts.

At the end of August, the fund offered a yield of 5.3%, although yields are variable and aren’t a reliable indicator of future income.

** Please note that this data is for Class L units in order to show performance since the fund was launched. The performance noted below is using Class Z units, which are available to investors with HL and have lower ongoing charges.