HEAD-TO-HEAD: Blackrock vs Jupiter

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Both the Blackrock and Jupiter funds belong to Morningstar’s global flexible bond category and do not have benchmark indices. However, there are various differences between the two funds.

One difference is how the portfolios are constructed. The Blackrock fund has an emphasis on risk management, which means shying away from taking large positions on a sector, on duration and on any individual issuers.

“The fund will stretch across sectors, regions, and issuers, which is why it is a much more diversified portfolio than the Jupiter fund,” Dash said.

He added that the Blackrock fund makes use of derivatives to both hedge the portfolio and take outright positions.

Blackrock fund sector breakdown

Source: Blackrock, Note: negative weightings may result from specific circumstances (including timing differences between trade and settlement dates of securities purchased by the funds) and/or the use of certain financial instruments, including derivatives.

The Jupiter fund employs a “barbell approach”, which means it tries to balance a credit-heavy income bucket, usually filled with high yield bonds, with the capital preservation characteristics of government bonds.

This explains why the Jupiter fund is less diversified and would have more high yield bonds in its portfolio, Dash explained.

Jupiter fund sector breakdown

Source: Jupiter Asset Management

Another key difference is how the funds are managed.

The Blackrock fund has four managers: Rick Rieder, who heads the team, Bob Miller, Scott Thiel and Andreas Doerrenhaus. Miller and Thiel focus on US and global strategies, respectively, while Doerrenhaus focuses on credit, according to Dash.

The managers set the tone for the portfolio from a macro perspective but rely on sector specialists to conduct security selection.

For the Jupiter fund, the portfolio manager, Ariel Bezalel, relies on third-party research to formulate his macro views and the portfolio’s asset class exposure, duration and yield curve positioning.

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