The Jupiter European Income Fund, managed by Malcolm Millar*, has launched today with a net annualised target yield at launch of 3%. The Fund, which will typically hold between 60 and 90 stocks, will focus on large and medium sized companies based in Europe that can grow their dividends and are trading on attractive valuations. The Fund will initially favour stocks in the banking sector, such as UniCredito and consumer stocks including those benefiting from higher discretionary spending among wealthier individuals, such as LVMH.
The reconstruction of the Jupiter North American Fund has also taken effect today. The changes, which were approved by unitholders on 25 April, involve amending the investment objective to include the aim of investing for income as well as long-term capital growth and, changing the Fund’s name to the Jupiter North American Income Fund. In addition, expenses will be taken from capital rather than from income with effect from 1 August 2007.
The reconstruction will result in few changes to the way the portfolio is constructed, with manager Sebastian Radcliffe** continuing to focus on identifying strong franchises that can grow globally and that have the ability to raise their dividends on a sustainable basis over the medium term. The Fund, which will have a net annualised target yield of 2%, will hold between 50 and 60 stocks and will initially favour consumer staples, such as Procter & Gamble, and industrials such as Emerson Electric.
Jupiter believes the case for investing internationally for income is growing. Edward Bonham Carter, joint chief executive of Jupiter, said: “Income investing has traditionally been a UK phenomenon as companies in other parts of the world have not tended to focus so much on the provision of dividends. This, however, is changing as companies with excess cashflow react to the increase in demand for a rising income from ageing populations.
“This demand is resulting in a growth in yields across many markets around the world and we believe investors will increasingly look to capture the strong dividend growth in these markets by investing in international equity income products.”
Jupiter now has three funds in its international income fund range, with the Jupiter European Income and Jupiter North American Income Funds joining the £132m Jupiter Japan Income Fund, launched in September 2005. These Funds are in addition to more established names such as the £4.2bn Jupiter Income Trust and £744m Jupiter High Income Fund.
*Malcolm Millar, who joined Jupiter’s European equity desk in June 2002 and managed the Jupiter Global Growth SICAV – European Growth Fund between May 2003 and April 2007. During this period the Fund returned 112% against 92% for the Lipper sector average. It should be borne in mind that the annual management fee and other expenses are to be charged against capital this will have the effect of enhancing income but restricting capital growth.
** Sebastian Radcliffe, who joined Jupiter in 1998, has managed the Jupiter North American Fund since 2.1.01. In the past three years the fund has returned 27% against 22% for the sector average, placing the fund 17 out of 69 funds. Figures produced by Morningstar from 3.5.07 to 1.5.07, bid to bid, net income reinvested. It should be borne in mind that the annual management fee and other expenses are to be charged against capital from 1 August 2007 and this will have the effect of enhancing income but restricting capital growth
