HEAD-TO-HEAD: Jupiter versus Nordea

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Investment process

Both the Jupiter and Nordea funds are mixed-asset funds that invest in global equities and bonds.

The products also have long-term track records. The Jupiter fund was launched in 2005 and the Nordea fund in 2008. However, both funds have different investment processes, McDermott said.

One of the biggest differences is how the funds are structured. The Jupiter fund, for example, is a fund of funds.

The fund invests in its in-house products, as well as those managed by other asset managers and ETFs, McDermott noted. Given the fund’s structure, meeting with other portfolio managers and learning more about the risk profile and style biases are crucial to the investment process.

Jupiter fund’s fund holdings

Source: Fund factsheet

Turning to the Nordea fund, its team invests directly in the underlying securities, he said, adding that the fund also invests in derivatives.

Their investment objectives are also different. According to their fund factsheets, the Jupiter fund’s objective is to provide income as well as capital appreciation, while the Nordea fund aims to preserve capital on a three-year investment horizon and provide a stable positive rate of return on investment.

McDermott, however, was not able to elaborate on the differences of their objectives, such as whether the Jupiter fund has a targeted annual income payout or if the Nordea fund has a targeted volatility level.

Assets

In terms of the broader asset classes, the Jupiter fund has more in fixed income – at 36%, while the Nordea fund only has 25% in the asset class, according to McDermott.

They are also different on the sub-asset class level, he added. For example, the Jupiter fund’s exposure to equities is more diversified, with 23% of assets in US equities and 18% in global equities. The Nordea product, meanwhile, has 57% of its assets in US equities alone, he said.

Asset allocation

Source: Fund factsheets

In equity sector allocations, the Jupiter fund has more assets in cyclical companies while the Nordea fund is more tilted to defensive names, according to data from Morningstar Direct. The difference reflects Jupiter’s offense versus Nordea’s defense.

Equity sector allocation (%)

Souce: Morningstar Direct

In fixed income, the Jupiter fund takes the bigger risk to reach for yield, investing roughly 40% in sub-investment grade. The Nordea product plays it safer, buying bonds that are rated BBB and above, according to their fund factsheets.

Fixed income allocation (%)

Source: Morningstar Direct

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