HEAD-TO-HEAD: Eastspring versus Jupiter

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INVESTMENT APPROACH

Both the Eastspring and Jupiter strategies invest in European companies with sustainable competitive advantages, according to Meakin. They also take a long-term investment outlook, with both portfolios having a low turnover.

Both strategies have unconstrained mandates and have concentrated portfolios, with their top 10 holdings accounting for at least half of the fund, according to their fund factsheets (see below for top 10 holdings).

However, there are differences in terms of their investment styles and approach to investing.

“The Eastspring fund will often wait for shorter-term price disruptions to provide an attractive entry point for buying a new position, while the Jupiter fund is more prepared to pay up for high-quality investments,” Meakin said.

He explained that the Eastspring fund’s portfolio is broadly split into “stable growth” and “opportunities” stocks. Stable growth companies are those with large competitive advantages, while opportunities stocks have more operational risk but greater potential upside.

“This is a sliding scale of quality/valuation rather than a barbell [approach to investing],” he noted, adding that the result is a balanced portfolio with quality characteristics but at reasonable valuations.

Meanwhile, the Jupiter fund has an emphasis on quality, according to Meakin. Its investable universe excludes companies that have commoditised products or services, having no pricing power or subject to heavy regulation. In total, there are around 150-200 firms that the fund’s team have identified as meeting its broad quality criteria.

The differences in the funds’ investment approach are reflected in the valuation metrics at the overall portfolio level, according to Meakin. For example, the Eastspring fund has a lower price-to-earnings ratio than the Jupiter fund. On the flipside, the Jupiter fund’s quality metrics, such as return on equity, is higher than the Eastspring offering.

Source: Morningstar

In terms of their style profiles, the Eastspring fund has a “blended” style, while the Jupiter fund is tilted more towards growth, Meakin added.

Sector allocation (%)

Source: Morningstar. *As of end-July. **As of end-September

Top 10 holdings

Source: Fund factsheets

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