Multi-asset funds invest not just in equities, but government and corporate bonds, gold and cash, meaning they tend to have a low correlation to global equity markets.
Jupiter Distribution has returned 6.7 and 39.6 per cent over one and three years respectively, putting it second in terms of performance in the IMA’s Mixed Investment 0%-35% Shares sector. In comparison the average fund in the sector has returned 3.8 per cent and 30.9 per cent over the same periods.
The £256m fund is co-managed by a team of four that includes FE Alpha Manager John Hamilton and industry star Anthony Nutt.
With an annual volatility score of just 5.35 per cent over the last year it is among the most stable available to UK investors.
It lists blue-chip favourites Vodafone, BP, Royal Dutch Shell and GlaxoSmithKline in its top-10 holdings along with a number of gilt certificates.
Performance of fund vs sector over 3-yrs
Source: FE Analytics
The IFA’s view
"The fund got walloped in the credit crunch but has come back very strongly," said Chris Spear, managing director of Spear Financial Services. "Tony Nutt has historically been into financials but those stocks don’t really suit a fund with such a low risk profile, which makes it a tough one to really define."
"The yield doesn’t compete with other funds with ‘distribution’ in the name, such as the ones offered by Thames River and Invesco Perpetual, but at about 4 per cent it could be a good alternative to cash in the current market."
Alternatives
The only other five-crown rated fund in the multi-asset sectors that is also run by an FE Alpha Manager is Troy Trojan.
The fund’s remit is to shelter investors' cash from inflation but it has surprised many industry commentators by delivering far more than that over the last decade.
Headed-up by Sebastian Lyon, the £1.78bn fund is a more risky prospect than the Jupiter Distribution fund. Our data shows that it has returned 156 per cent over the last decade compared with 61 per cent from the average fund in the Mixed Investment 40%-85% Shares sector.
Verdict
The Jupiter Distribution fund remains a difficult one to pin down. Nutt has built his reputation investing in financials and yet the fund has less than a 6 per cent weighting to the sector.
While the fund is designed to preserve investors’ wealth, the "distribution" tag may lead to people buying it for a stream of income and for this purpose the Invesco Perpetual Distribution fund is better suited.
However, as a low-risk investment to be bought as an alternative to cash this fund is well placed.