Jupiter suffers further outflows

Inflows slowed from £16.5bn in 2017 to £11.9bn, and these were more than offset by redemptions principally in the Dynamic Bond fund, as investors steered away from fixed income funds. Net outflows totalled £4.6bn compared with net inflows of £5.5bn in 2017.

Dynamic fund investors come from outside the UK where fixed income allocations are higher. Jupiter took the view that US interest rates would not rise at the long end, whereas they did in the first nine months of the year, but its stance was vindicated in the fourth quarter when yields started to fall.

Overall profits were down because the company started the year facing two financial headwinds. The first was the inclusion for the first time of research costs on the income statement amounting to £5m. The second was the implementation of an earlier decision to do away with box profits generated by dual pricing – or the spread between bid and offer – and the adoption of single price. That cost a further £12.9m.

Analysts at Numis are forecasting pre-tax profits for the year to December 2019 of £161.4m and EPS of 28.5p.