HEAD-TO-HEAD: JP Morgan vs Jupiter

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Investment approach

The two funds share a similar objective to achieve long-term capital growth, but they go about it in different ways.

The three co-managers of the JPM Morgan fund follow a disciplined, quantitative process, said Kandlur.

Stocks are screened for earnings momentum, value and quality, with other behavioural factors proposed by a team of 20 who assist by refining selections.

“During the past three-to-five years, momentum has been the most dominant of the three main determinants, which has been mostly successful,” she said.

A problem arises when momentum breaks down, as it did last year, she added.

The managers are not constrained by the benchmark, but have a self-imposed limit of 35% to any one sector. In practice the portfolio is diversified, with around 90 stocks.

As the name of the fund suggests, the managers operate a dynamic approach with a high turnover. Stocks are sold ruthlessly if conviction is lost, and the average holding period is only four-to-six months.

“However, it is a core European equities product,” said Kandlur. It excludes the UK, which, of course, is currently semi-detached from the continent.

In contrast, the JGF-Jupiter fund is a “high-conviction fund, with a concentrated number of stocks and low turnover,” said Kandlur.

It holds between 35 and 45 names, and stays with most of them for five or more years.

Alexander Darwall, who has managed the fund since 2007, concentrates on large-cap companies with stable, high quality earnings growth.

“The onus is on the fund manager to get his stock selection absolutely right,” said Kandlur.

Source: FE Analytics; Morningstar

*14 Mar 2016 – 14 Mar 2019

Market Exposure:

Sector Weightings (31 January 2019)

Source: FE Analytics

Top 5 holdings (31 January 2019)

Source: FE Analytics

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