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Jupiter Fund Mgmt. gains although assets under management fall, net outflows increase in fourth quarter

In a brief fourth-quarter trading update, the FTSE 250-listed investment firm said its AuM as at 31 December 2018 were £42.7bn, down from £47.7bn at the end of September
Investing
Jupiter saw overall net outflows in the fourth quarter were £1.53bn, against outflows of £833mln in the third quarter

Jupiter Fund Management PLC (LON:JUP) managed to push higher on Thursday even though the group reported a fall in its assets under management (AuM) and an increase in net outflows in the final quarter of 2018, with Shore Capital repeating a ‘buy’ stance.

In a brief fourth-quarter trading update, the FTSE 250-listed investment firm said its AuM as at 31 December 2018 were £42.7bn, down from £47.7bn at the end of September.

READ: Jupiter Fund Management sees bigger than expected first-half net fund outflows, says operating environment challenging

Jupiter said market and foreign exchange movements in the fourth quarter were a negative £3.52bn, swinging from a positive £319mln in the previous quarter.

The group said overall net outflows in the fourth quarter were £1.53bn, against outflows of £833mln in the third quarter.

It added that mutual fund outflows were £1.74bn in the period, £1.3bn of which were from fixed income operations mainly in the UK and Continental Europe.

The majority - £36.94bn – of Jupiter's assets under management are in mutual funds.

Over the twelve months to December 31, the group saw its AuM fall by 14.9%, or £7.5bn.

Outflows in four consecutive quarters

In a note to clients, analysts at Shore Capital noted that Jupiter has now suffered four consecutive quarters of net outflows, centred mainly around fixed interest.

However, they said: “While we are likely (to) reduce our last published fair value of 425p to something around the 350-360p range on the provisional earnings downgrades, we think the current share price adequately compensates investors for the less attractive business model (lack of performance fee eligibility, high UK retail bias in a platform-controlled market, concentration of AUM in large funds).”

The analysts repeated their ‘buy’ rating on Jupiter shares having upgraded their stance on 12 October 2018 for the first time since initiating coverage in January 15.

In late afternoon trading, Jupiter shares were 1.6% higher at 309.50p.

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