Jupiter boasted strong net inflows of £1.3bn in a third-quarter trading update today, defying the affirmed switch towards passive funds.
Jupiter's funds rely on an active strategy, meaning its managers pride themselves on stock picking rather than passively tracking an index.
Although there has been a drift towards passive fund recently, as indices have performed well and regulators have drawn increasing attention to the higher fees levied by active managers, investors clearly still have appetite for active. Jupiter's assets under management (AUM) now stand at £48.4bn, a 19 per cent increase year-to-date.
Brokers were divided by Jupiter's results. Justin Bates, an analyst at Liberum, reiterated a “buy” recommendation, calling the update “excellent” and adding: “We continue to see a lot of value here.”
Stuart Duncan at Peel Hunt said the inflows for the third quarter were lower than the previous three months but were still “healthy”, and gave a more tentative “add” recommendation.
Although Cantor Fitzgerald's Keith Baird noted the increase in assets under management, and said there was enough cash on Jupiter's balance sheet to give a high dividend payout ratio, he added that asset managers are sensitive to market levels and reiterated a “hold” recommendation.
Mutual funds saw the highest inflow with £1.2bn, while Jupiter's investment trusts saw a £13m outflow. The group's segregated mandates, which are run exclusively for particular investors, brought in another £111m.
Most of the mutual fund inflows were within the fixed income strategy, while Jupiter also noted “meaningful inflows” into European growth, UK value, absolute return and global emerging markets.
Jupiter's Merlin team had been a significant backer of Neil Woodford's flagship fund, but it emerged yesterday that it had sold down a significant proportion of its holding after Woodford suffered a particularly turbulent summer.