Jupiter Dynamic Bd L $ Hsc Acc |
by Evangelia Gkeka
Jupiter Dynamic Bond benefits from the experience of its lead portfolio manager, continuity in the execution of its flexible investment process, and strong absolute and risk-adjusted returns since inception. Veteran portfolio manager Ariel Bezalel has been at the helm here since its inception in 2012 but has run the U.K.-domiciled mirror since launch in 2008. He has skillfully used the flexibility afforded to him by the investment process. Bezalel, investment manager at Jupiter, boasts more than two decades of portfolio management experience; before bringing this strategy to market, he successfully managed the fixed-income portion of multi-asset mandates at Jupiter. In a bid to formalize the team structure and provide guidance on continuity, analysts Harry Richards and Vikram Aggarwal were promoted to assistant fund managers in 2016 and 2017, respectively. In June 2019, Richards was further promoted to comanager. The managers are further supported by a team of 14 sector-focused analysts (including three portfolio managers who also have sector coverage or provide ideas) that has grown over the years along with the level of assets for the strategy, which currently stands at GBP 8.2 billion, including also GBP 177 million in Jupiter Dynamic Bond ESG, the Article 8 version of Jupiter Dynamic Bond that was launched in January 2022. Idea generation greatly benefits from the flexible investment process and focused team. Investment decisions are debated and decided in weekly team meetings. Bezalel uses third-party research to inform his macro views and establish the strategy’s top-down stance, which is implemented via analysts' thoroughly researched single-name and sector recommendations. The portfolio is constructed with a barbell approach balancing the capital preservation features of high-quality government bonds and the income generation of high-yield debt (including subordinated financials). Bezalel's active exposure and duration management and opportunistic exposure to select emerging markets have added value over the years. The multiple return drivers employed by the manager have resulted in strong absolute and risk-adjusted returns since inception. However, in 2022 the strategy significantly underperformed its peers and category index, and its barbell approach did not provide diversification as it did in previous periods of market weakness. Overweight duration positioning against peers in developed-markets government bonds, mainly in U.S. Treasuries but also in Australia and New Zealand, was the main detractor. The high-yield allocation also detracted but outperformed the broader market thanks to conservative positioning in short-dated bonds and defensive sectors. For the year to date as of end September 2023, the fund is behind its peers. Although holdings in high yield and investment-grade contributed, its overweight duration in government bonds, mainly U.S. Treasuries and Australian government bonds, detracted. |
Morningstar Pillars | |
People | High |
Parent | Average |
Process | Above Average |
Morningstar reserve its rights to charge for access to these Ratings and/or Rating report. |
Permissions/Reprints E-mail Morningstar |