Promising funds can sometimes get overlooked; they get lost among thousands of their peers. The Jupiter Growth and Income Fund is a classic example, says Mark Dampier of Hargreaves Lansdown in The Independent.
Fund manager Philip Matthews joined Jupiter in 1999 after leaving Cambridge University. He took over the Growth and Income Fund in 2006. The fund has quietly performed very well since then, returning 51.2% over the last five years. Year-on-year dividend growth has also been an impressive 20%.
Matthews aims to generate long-term capital and income growth, mainly by picking UK investments. By rights this should mean his fund is classified in the UK Equity Income and Growth sector, says Dampier. Oddly, however, it sits in the UK All Companies sector. That may explain why lots of investors have missed it.
But while individual investors may be overlooking the fund, it’s on the radar screens of the professionals. There was a strong flow of money in last year. Jupiter’s own fund of funds even started buying in a few months ago. That sort of self-investment “is always a good sign in my view”, says Dampier.
Matthews likes companies “that offer the best combination of cyclically adjusted earnings and high return on operating capital”. But he’s avoiding areas that have already become fashionable, and hence expensive.
For example, he’s not keen on British stocks with a high exposure to emerging market growth, as many already trade at a big premium. Instead, he likes firms such as GlaxoSmithKline, offering less emerging market exposure, but at a cheaper price. He also thinks Lloyds Insurance firms are undervalued.
This classic income-orientated fund is “worthy of inclusion in any income portfolio”, concludes Dampier.
Contact: 020-7314 7600.
The Jupiter Growth and Income fund top ten holdings
| Name of holding | % of assets |
|---|---|
| GlaxoSmithKline | 6.90 |
| Vodafone | 6.10 |
| HSBC Holdings | 5.60 |
| BP | 5.56 |
| Royal Dutch Shell B | 5.08 |
| British American Tobacco | 4.10 |
| AstraZeneca | 3.18 |
| Smiths Group | 3.08 |
| Centrica | 2.80 |
| Micro Focus International | 2.69 |