Guy de Blonay, manager of the Jupiter Financial Opportunities Fund, may be the envy of many fund managers invested in emerging markets. In 2012, his fund was 25% invested there, but de Blonay got out as soon as the US Federal Reserve hinted it might ‘taper’ its bond-buying scheme. “So far we’ve timed the correction in emerging markets well,” he told Investors Chronicle.
Following this rout, he is now thinking about snapping up some bargains, but the timing is crucial. “The challenge is to time the return,” he says. “We still have a bit of Japan and China but nothing in India, Brazil, Russia or Southern Pacific Asia. We’re looking for a good entry point.”
The fund’s overall goal is to achieve capital growth by looking for major investment themes in the international financial sector, and seeking out “mispriced” shares in financial firms. It has to hold the same weighting in British firms as its benchmark, the MSCI All Country World Financial Index, but investment elsewhere is unconstrained. So currently it is 45% invested in North America, 28% in Europe and 20% in Britain, with 39% of holdings in financial services, 31% in banks and 16% in insurance.
De Blonay thinks the banking sector has cleaned up its act since the financial crisis and is now “fit for purpose”, while there are opportunities for investors to benefit from its recovery stories.
Lloyds, a top ten holding, is a way to play a recovering UK economy, and could soon start paying out profits to investors, while he believes that US banks Citigroup and Morgan Stanley also offer good value. The fund, which charges an annual fee of 1.5%, is up 26.6% over one year and 49% over five years.
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| Jupiter Financial Opportunities top holdings | |
|---|---|
| Name of holding | % of assets |
| Axa | 2.89% |
| LSE Group | 2.82% |
| UBS | 2.81% |
| ING | 2.72% |
| Morgan Stanley | 2.65% |
| Prudential | 2.49% |
| Discover Financial Services | 2.24% |
| Schroders | 2.06% |
| Lloyds Banking Group | 2.03% |
| Sumitomo Mitsui Financial | 2.01% |