Sunday, April 5, 2020

Global Giant Shuts Poor Performing Funds

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Investors choosing to pull their cash from wealth manager Jupiter have triggered the closure of two under performing funds.

The global investment giant has announced the Jupiter UK Alpha and Jupiter Enhanced Distribution funds will shut on March 31.

The Jupiter UK Alpha fund has operated for more than 25 years.

Investors have withdrawn huge amounts of cash, dragging the asset value of the fund down from £20.1 million in January 2018 to £4.2 million at the end of last year.

Their concern was return on investment, with the fund clocking up 2% across three years to December 2019 compared with an average 22.3% for the Equity – UK (All Companies) tracker.

Dismal performance

The Jupiter Enhanced Distribution Fund has a similar record.

Although only opening in 2015, the fund has shrunk from £19.7 million in January 2018 to £10.6 million two years later.

Fund performance seems a concern for investors as they have seen 7.5% back, compared with a 14.4% average for the Mixed Assets – Balanced GBP sector.

“At Jupiter we keep our fund range under constant review to ensure that we are providing the most suitable products to fit the needs of our clients at all times,” said a spokesman.

“We have taken the decision to close these funds because, at their current small scale, they are continuing to contract, making them harder to manage efficiently and achieve an appropriate diversification of assets.

M&G fund still suspended

“We do not anticipate a resurgence of interest in these Funds in the near term to generate sufficient new inflows to make the Funds sustainable going forward. Consequently, we believe closure of the funds is the correct decision to take for investors.”

Other funds in the property sector have taken a hammering from investors recently.

The M&G Property Portfolio remains in suspension  after investors withdrew more than £1 billion last year and financial services giant Prudential has backed off from a partnership with the fund manager.

M&G Chief Investment Officer Jack Daniels said: “Since suspending the fund, we’ve been encouraged by the support of many investors who understand our decision to give the managers time to complete disposals at fair prices. While customers want ready access to their investments, it’s also important that their long-term interests are protected.”

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