- Outflows of £2.3m in client funds through the period
- Comparative three-year performance measures underwhelm
An initial negative market reaction to Jupiter Fund Management’s (JUP) interim results was short-lived, but you could argue that the source of investor displeasure was the clear evidence that Jupiter is still struggling to retain customers at a time when everyone and their mother-in-law is shovelling lockdown savings into mutual funds. Why this should be the case, is an increasingly vexed question?
In common with its peers, Jupiter benefited from a combination of lockdown savings searching for a purpose and a strong market rally. Assets under management grew by 54 per cent, compared with last year to a record £60.3bn, but the manager still suffered a net outflow of £2.3bn in client funds. The company attributes this to areas where assets are out of fashion - UK equities and European Growth saw heavy redemptions - despite the value rally the market saw during the half.
However, an indication that the problem is more deep-rooted is clear when you compare Jupiter’s three-year performance measures with its peers. While the fund claims outperformance rates of 69 per cent, down slightly on the year-end results, Schroders, for example, has outperformance rates in the high 80s. Management is pinning its hopes on a new set of funds that are coming close to three-year maturity reversing the malaise.
With no additional capital returns expected before the end of next year. Investors rightly query the point of holding Jupiter even at a discounted forward P/E for 2022 of just 10. Questions over whether another merger is the only route to better performance will not go away – unlike its clients, it seems. Hold.
Last IC View: Hold, 306p, 26 Feb 2021
JUPITER FUND MANAGEMENT (JUP) | ||||
ORD PRICE: | 277p | MARKET VALUE: | £ 1.53bn | |
TOUCH: | 277-278p | 12-MONTH HIGH: | 307p | LOW: 289p |
DIVIDEND YIELD: | 6.2% | PE RATIO: | 12 | |
NET ASSET VALUE: | 157p* | NET CASH: | £99m |
Half-year to 30 Jun | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
2020 | 182 | 40.8 | 6.50 | 7.90 |
2021 | 248 | 57.0 | 8.70 | 7.90 |
% change | +36 | +40 | +34 | - |
Ex-div: | 12 Aug | |||
Payment: | 01 Sep | |||
*Includes intangible assets of £632m, or 114p a share |