Firstly, it is important to highlight that the Jupiter Asia Pacific Income Fund, a mutual fund, primarily invests in a diversified portfolio of issuers from the Asia Pacific region, or whose businesses or assets originate from the region. The fund's objective is to outperform the MSCI AC Asia Pacific ex Japan index net of reinvested dividends over a 3-year period.
According to its investment policy and objectives, the fund has no restrictions on investing in emerging markets or any economic sector. Thus, the fund may have access to China A shares through Stock Connect, but not exceeding 20% of the total fund value. Additionally, the fund may also include Real Estate Investment Trusts (REITs) as underlying instruments, up to 15% of the fund.
The fund's team actively and convictionally manages its portfolio. Their process focuses on considerations such as the management's experience in the companies they want to invest in, corporate governance, the company's business model, capital discipline, dividend distribution policy, valuations, potential growth, and liquidity of the company's shares. Income generation is prioritized over growth potential.
Regarding investment conviction, the fund maintains a high level of concentration, with approximately 30 stocks, and the average holding period for investments is at least one year.
When we mention that the management is active, there is another reason: to meet the mandate of outperforming the index, the fund's Portfolio Manager may invest in stocks outside the index. Therefore, the risk-return profile of the fund may differ significantly from that of the index; in short, the index is only a reference.
In terms of sustainability criteria, these are considered as risks in the investment process, although there are no specific limits or restrictions applicable to ESG criteria for portfolio investments.
The fund's team is led by Jason Pidcock, who joined Jupiter in 2015 but has extensive experience in the Asia Pacific market, having worked with the region since his early investment career at Henderson, followed by BP Pension Fund and Newton before joining Jupiter. Alongside him is Sam Konrad, who joined the team in 2022 and also has extensive experience covering Asian markets. Before joining Jupiter, Sam Konrad spent 17 years at UBS, gaining experience in major markets.
As of the end of November 2023, the fund had approximately $66 million USD under management.
As seen in the upper graph, this is a fund with a long track record - it was launched in September 2000 - and has also shown good performances over various time horizons compared to its benchmark. Its 3-year and 5-year histories, which are robust measures and always advisable to review, are quite impressive.
With regard to the 5-year risk measures, upon reviewing the Information Ratio, it can be observed that the fund and its strategy add value, as it has a value greater than 0. In relation to the Market Beta, this indicates numerically that, in reality, the fund does not take more or less risk than the market, even though it maintains an active and high conviction management.
The fund has 10 significant investments as of the end of September, collectively representing approximately 50% of the fund.
Jupiter Asia Pacific Income Fund is an attractive investment option for those investors seeking more concentrated positions. In its process, emphasis is placed on dividends and value creation, with a very specific market exposure, seeking alpha over beta, led by a team that invests with conviction. It is a fund with a long track record, although its size could be improved to be more appealing to institutional investors.