The run-up to the EU referendum in June caused retail investor caution, hurting inflows for many asset managers during the first half of the year. Like its peers, Jupiter Fund Management (JUP) suffered a heavy fall in its share price as a result. However, unlike the vast majority of its peers, Jupiter continued to generate net inflows during this time. And in the three months following the referendum, inflows picked up further to £0.8bn, which was more than double that achieved during the entire first half of 2016. Analysts, many of whom had originally expected post-referendum outflows, have subsequently upgraded earnings forecasts for this year, as well as for 2017 and 2018.
- Diversifying asset and client mix
- Growing funds under management
- Special dividends
- Net cash
- Trading at discount to peers
- Platform consolidation threat
- Less exposure to performance fees
We feel the strong post-referendum performance gives added credence to Jupiter's strategy of diversifying its business by geography, client type and asset class since it listed in 2010. But we don't think the shares' huge yield and modest earnings multiple reflects the progress being made or the long-term growth opportunities that should result from the government and companies passing responsibility for pension savings to individuals.