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- 1. Jupiter Dynamic Bond (SICAV)May 2013FOR PROFESSIONAL AUDIENCES ONLY. NOT FOR RETAIL INVESTORS.
- 2. Jupiter Dynamic Bond Aims to achieve a decent income with prospect of capital growth Combines top-down strategic asset allocation with bottom-up security selection Go anywhere strategy: Global investment universe Is able to invest across a range of fixed income securities i.e.: Government bonds Investment grade bonds High yield bonds Preference shares Convertible bonds and other bonds Flexible Duration Approach Can invest in all parts of the ratings spectrum from investment grade to high yield At least 80 % of the currency is either denominated in the base currencyor hedged back to the base currency*1*Fund manager limit, not fund / sector restriction.
- 3. Agenda Performance Managers current thinking Valuations There are still some diamonds inthe rough Stock Examples Portfolio Features2
- 4. 3Track record Jupiter Dynamic Bond SICAVPerformance since launchSource: FE, bid to bid, gross income reinvested in EUR, net of fees 08.05.12 to 30.04.13. Fund launched 08.05.12.Past performance is no guide to the future.-20246810121416May 12 Jun 12 Jul 12 Aug 12 Sep 12 Oct 12 Nov 12 Dec 12 Jan 13 Feb 13 Mar 13 Apr 13%TotalReturnJupiter Dynamic Bond I Inc EUR TR in EU 14.6 Jupiter Dynamic Bond L Inc EUR TR in EU 13.7Barclays Pan-European Aggregate: Corporate TR in EU 8.8 FO Fixed Int Global TR in EU 4.4
- 5. Track record UK-domiciled bond fund4Ranked 2nd in sector since launch (02.06.08)Source: FE, bid to bid, net income reinvested in GBP to 30.04.13. Fund launched 02.06.08. Ranked 2 / 50 in IMA Sterling Strategic Bond sector since launch.Past performance is no guide to the future.-20-1001020304050607080Jun 08 Mar 09 Jan 10 Nov 10 Sep 11 Jul 12 Apr 13%GrowthUK-domiciled bond fund in GB 72.63 iBoxx Stg NON-GILTS ALL MATURITIES TR in GB 49.98IMA Sterling Strategic Bond TR in GB 39.03
- 6. 5Track record UK-domiciled bond fundPerformanceSource: FE, bid to bid, net income reinvested to 30.04.13. Fund launched 02.06.08. Past performance is no guide to the future.Cumulative 1 year % 3 year % Since launch %UK-domiciled bond fund 12.42 27.73 72.63IBOXX Stg Non Gilts All Maturities 15.14 30.48 49.98IMA Sterling Strategic Bond sector average 12.81 23.14 39.03Sector ranking 42 / 69 13 / 60 2 / 50Discrete years 2012 % 2011 % 2010 % 2009 %UK-domiciled bond fund 16.09 4.50 11.19 42.52IMA IBOXX Stg Non Gilts All Maturities 13.05 6.91 8.38 10.78Sterling Strategic Bond sector average 13.39 2.71 8.09 20.75Sector ranking 26 / 69 19 / 65 13 / 61 2 / 55
- 7. Agenda Performance Managers current thinking Valuations There are still some diamonds in therough Stock Examples Portfolio Features6
- 8. Post Whatever it Takes speech, where are we now? Major central banks appear to havebackstopped markets for now US appears to be establishingsustainable economic recovery.Positive tailwinds from the Far East.Dont underestimate Japan! Europe: Macro picture looks bad. CoreEurope now beginning to suffer.Expect gradual shift from BrusselsConsensus to Fiscal Realism7Dont fight the FED or the ECB, BofE, BofJ, SNBIf you give me a trillion dollars, Ill show you a good time too Jim RogersFund manager views at the time of writing and will change in the future. *Source: FED, BoJ, BoE, ECB, PBoC. JPMAM estimates, May 2013.To infinity and beyond!*
- 9. 8Europe: Austerity + bank recaps + political uncertainty = recessionManufacturing activity Non-manufacturing activity303540455055606506 07 08 09 10 11 12 13US Eurozone UK303540455055606506 07 08 09 10 11 12 13US Eurozone UKExpansionContractionSource: Bloomberg as at 30.04.13.ExpansionContraction
- 10. Sustainable economic recovery taking shape in the US9Housing is a big part of consumer net worthBroadly speaking, makes more sense to buy than rentSource: 1) Bloomberg as at 30.04.13. 2) JP Morgan, AxioMetrics, CoreLogic, Freddie Mac June 2012.Fund manager views at the time of writing and will change in the future.NAHB housing market index1 Where buying is cheaper than renting2% of metropolitan statistical areasLast priceLast price02040608010012014016001020304050607080Dec 99 Mar 02 May 04 Jul 06 Sep 08 Nov 10 Jan 13NA HB Housing Market Index (LHS)US Consumer Confidence (RHS)
- 11. 10Consumer net worth on track to make new highThis reflects increases in house prices, stock prices, cash,bonds, insurance, etc., as well as declines in mortgage debtSource: US Consumer Net Worth (ISI) Q1 2013 $64.3 e.
- 12. Comparing deleverage across sectors and regions11Sector debt (% GDP) 1993 1998 2003 2008 2012*Government US 65.9 54.2 49.1 65.7 90.1UK 44.5 47.8 37.0 52.6 91.5Germany 44.2 62.6 65.8 71.1 89.9Japan 69.5 107.6 156.0 190.5 229.5Financial US 21.0 33.6 43.8 63.8 40.6UK 74.5 0.3 133.2 206.3 201.3Germany na 69.0 92.1 92.7 90.4Japan 117.0 114.0 106.2 119.2 115.2Non-financial US 55.8 61.0 65.2 82.0 76.9UK 63.2 65.8 86.2 121.4 108.9Germany 55.1 54.9 62.5 61.2 60.9Japan 145.3 135.3 108.1 99.9 95.1Household US 61.7 65.4 82.9 97.2 82.7UK 65.2 63.4 82.8 102.2 94.8Germany 54.5 68.9 71.6 62.5 58.3Japan 67.1 72.8 70.5 67.9 66.0Source: HSBC, Haver Analytics, national sources, McKinsey, 2012.*US, Japan and Germany as of Q2 2012, UK as of Q1 2012.
- 13. Hedges against tail-end risks Long Australian government bonds Safe haven Pristine finances Resource rich Housing bubbles? Short US Treasuries (2 year and 5 year futures) Trade is asymmetric Cheap hedge against US economic recovery Short 10 Year French Sovereigns We believe trade is asymmetric Cheap hedge against deteriorating French economy and resurfacing of Euro riskCurrent active bets of the Jupiter Dynamic Bond SICAV12The fund manager has the power to use derivatives but it is intended that these willonly be used for efficient portfolio management and not for investment purposesFund manager views at the time of writing and will change in the future.
- 14. Agenda Performance Managers current thinking Valuations There are still some diamondsin the rough Stock Examples Portfolio Features13
- 15. Corporate bond valuations14IG Non-Financials Saw Small Uptick in Leverage***Source: RBS Credit Strategy, Bloomberg, 27.11.12.**Source: Morgan Stanley Research, Bloomberg, Markit, Company Data as at 28.08.12.0204060801001201401600x1x2x3xDec 99 Jun 02 Dec 04 Jun 07 Dec 09 Jun 12Net Leverage Gross LeverageSPL (RHS) Avg SPL (RHS)European Investment Grade spreads*Still scope for further tightening in BBBsASW spreads by rating, bp
- 16. European banks vs. rest of the world15Source: RBS Credit Strategy, Bloomberg, Wikipedia, March 2013.
- 17. Europe is overbanked. Private sector deleveraging has just startedAggregate balance sheets for all European banks, tnBalance sheets are still growing. RWA decline conceals higher sovereign exposureLooking beyond the aggregate picture, few banks have deleveraged proactivelySource: RBS Credit Strategy, Bloomberg, ECB, Federal Reserve, March 2013. *Q3 11 or latest available financial statement data for constituent banks.Fund manager views at the time of writing and will change in the future.16
- 18. Man vs. bank: Size of bank assets vs. GDP17Source: RBS Credit Strategy, ECB, RBA, Federal Reserve, BoJ, March 2013.
- 19. Europes banks: Still restructuring18Source: RBS Credit Strategy, Bloomberg, March 2013.
- 20. Assets: Bad loans continue to rise in the periphery, stable in core Europe19NPL ratios are increasing in Greece, Ireland, Italy, Portugal and SpainIncreasing bad loans will continue to hurtperipheral banks and erode capitalPeriphery NPL ratios are accelerating NPLs remain low in core EuropeSource: RBS Credit Strategy, Bloomberg, Banco de Espana, March 2013.*The recent decline in Spanish NPLs is partly due to SAREB, which has taken over 50bn of assets off bank balance sheets.NPL ratio, % of total loansNPL ratio, % of total loans*
- 21. Liabilities: Too much debt, too little capital20Average cost of debt capital and capital structure at the bank levelRegulators are pushing banks towards more equityand more secured funding, less senior / sub debtSource: RBS Credit Strategy, company reports, Bloomberg, March 2013.Note: Senior = Senior Unsecured and Senior Secured.Capital structure of banks and weighted average cost of capital
- 22. 21Exposure to banksPortfolio features of the Jupiter Dynamic Bond Fund Exposure to BanksDistribution by types of bank debt Banks: Still selective Sticking to leading UK, German,US and Norwegian banksSource: Jupiter as at 30.04.13.LT2 6.8%Tier1 9.4%Tier2 0.9%N/A 51.6%Cash 5.6%Senior sec 1.8%0%5%10%15%20%25%30%May 12 Jul 12 Sep 12 Nov 12 Jan 13 Mar 13Banks
- 23. Progress against plan: RBS22 Capital, funding andliquidity positions robust Safety and soundnessremains a key priorityGroup: Key performance indicators Worst point Q3 2012 Medium-term targetBalance sheet & risk (group):Loan: deposit ratio (net of provisions) 154%1102% c.100%Short-term wholesale funding2297bn349bn 1.5x STWFLeverage ratio528.7x615.4x 10%Value drivers (core)Return on Equity (RoE)10-31%910% >12%Cost: Income ratio1297%1159% 7500 ft day ratesSource: Mailto, Paretosec, 2013.($/day)(Demand & supply) (Utilisation total %)
- 35. Agenda Performance Managers current thinking Valuations There are still some diamonds in therough Stock Examples Portfolio Features34
- 36. 35Jupiter Dynamic Bond Fund (SICAV) Portfolio breakdown Jupiter Dynamic Bond Fund (SICAV) Average rating BB+ Holdings in PIIGS: 6%*Source: Jupiter as at 30.04.13. The fund manager has the power to use derivatives but it is intended that these will only be used for efficient portfoliomanagement and not for investment purposes. *Source: Jupiter as at 02.05.13.-30%-20%-10%0%10%20%30%40%50%60%70%80%Sovereign(long)Sovereign(short)High Yield InvestmentGradeCash-15%-10%-5%0%5%10%15%20%25%30%35%40% UnitedKingdomEuropeFarEastExJapanCashSouthAmericaEasternEuropeSouthAfricaMiddleEastNorthAmerica-15%-10%-5%0%5%10%15%20%25%30%35%FinancialsConsumerDiscretionaryIndustrialsTelecoms/CableCashRigFinancingMediaHealthcarePackagingBusinessServicesConsumerNon-DiscretionaryUtilitiesTechnologyPropertySovereign
- 37. Jupiter Dynamic Bond Fund (SICAV)36Top 10 holdings by issuerIssuer %Australia Government 4.75% 21/04/27 6.71Mexican Bonos 5% 15/06/17 3.14Australia Government 5.5% 21/04/23 2.32Eksportfinans 5.5% 26/06/17 2.14Punch Taverns 7.274% 15/04/22 2.11Pagejaunes 8.875% 01/06/18 1.81Lowell Group 10.75% 01/04/19 1.79Unique Pub Finance 6.542% 30/03/21 1.58Welltec 8% 01/02/19 1.44Beazley Group 7.25% VRN 17/10/26 1.33Source: Jupiter as at 30.04.13.
- 38. Portfolio featuresJupiter Dynamic Bond (SICAV)37 Effective yield*: 5.86 % (gross basis) Duration of portfolio**: 3 years Invest in all parts of the ratings spectrum Credit rating: BB+*** Fund manager tends to have a 10% limitin convertibles*Source = HSBC, 08.04.13, EUR Institutional class. **Source = Jupiter 31.03.13. ***Source: Jupiter as at 30.04.13.Yields quoted are not guaranteed and may change in the future.
- 39. 38Portfolio features of the Jupiter Dynamic Bond (SICAV)Change in duration since launchSource: Jupiter, 30.04.130.00.51.01.52.02.53.03.54.04.5May 12 May 12 Jun 12 Jul 12 Aug 12 Sep 12 Oct 12 Nov 12 Dec 12 Jan 13 Feb 13 Mar 13 Apr 13YearsAverage duration
- 40. 39Strategic asset allocation since launchTruly strategic. Exploiting opportunities across the ratings spectrumJupiter Dynamic Bond (SICAV)Source: Jupiter as at 30.04.13. The fund manager has the power to use derivatives but it is intended that these will only be used for efficient portfoliomanagement and not for investment purposes.-40%-20%0%20%40%60%80%100%120%May 12 Jun 12 Jul 12 Aug 12 Sep 12 Oct 12 Nov 12 Dec 12 Jan 13 Feb 13 Mar 13 Apr 13Sovereign (long) Sovereign (short) High Yield Investment Grade Cash
- 41. 40Strategic asset allocation since launchTrack recordUK-domiciled bond fundSource: Jupiter as at 30.04.13. The fund manager has the power to use derivatives but it is intended that these will only be used for efficient portfoliomanagement and not for investment purposes.-60%-40%-20%0%20%40%60%80%100%120%Jun-08 Oct-08 Feb-09 Jun-09 Oct-09 Feb-10 Jun-10 Oct-10 Feb-11 Jun-11 Oct-11 Feb-12 Jun-12 Oct-12 Feb-13Sovereign (long) Sovereign (short) High Yield Investment Grade Cash
- 42. 41Portfolio features of the UK-domiciled bond fundChange in duration since launchSource: Jupiter, 30.04.13.0123456Jun 08 Mar 09 Jan 10 Oct 10 Aug 11 Jun 12 Mar 13YearsAverage duration
- 43. 42Jupiter Dynamic Bond Fund (SICAV)Regional breakdown Credit rating breakdownSource: Jupiter as at 30.04.13. *The fund manager has entered into short positions via bond futures with a notional value of -99.35m (-24.11%) in order to hedgethe Funds interest rate and sovereign exposure to France, Germany and the United States. ** This includes unrealised gains made from currency hedges. FORRegion %United Kingdom 33.32Europe 31.06North America 9.71Far East Ex Japan 9.03South America 4.53Eastern Europe 3.23South Africa 1.92Middle East 0.43Total 93.23Credit Rating Breakdown %AAA 9.03A 1.63BBB 17.75BB 19.59B 27.82CCC 5.26D 0.32NR 11.83Sub Total 93.23Unrealised Loss from Other Financial Instruments* -0.01Cash** 6.78Total 100.00
- 44. Appendix
- 45. 44Flexible Fixed Income strategyProven, experienced manager with award-winning track record 15 years experience in sovereign and credit markets Joined Jupiter in June 1997 and has been a member of theFixed Interest team since 1998 Launched a Global Strategic Bond strategy in 2008 Manages the fixed interest component of two UK-domiciledbond / equity funds Qualified in Economics at Middlesex UniversityAriel BezalelFixed Income Fund ManagerFund Management DirectorAUM: 2.3bn**Source: Jupiter as at 31.03.13. Note: Years of experience as at 07.05.13. Past performance is no guide to the future.
- 46. 45Fixed Interest and Multi-Asset Team*Source: Jupiter as at 31.03.13. Note: Years of experience as at 07.05.13. Past performance is no guide to the future.Note: Miles Geldard was recognised in the Sauren Awards with two gold medals in the convertibles category, two gold medals in the absolute returncategory and two gold medals in the multi strategy international category. Ariel Bezalel won the Best Strategic Bond Fund Manager at the InvestmentWeek Fund Manager of the Year awards.Ariel BezalelFixed IncomeFund Manager15 years industry exp.Hilary BlandyFixed IncomeSenior Credit Analyst11 years industry exp.Lee ManziMulti-AssetFund Manager15 years industry exp.Miles GeldardHead of Team &Fund Manager30 years industry exp.Nicole WeissFixed IncomeCredit Analyst(Maternity leave)13 years industry exp.Rhys PetheramFixed IncomeFund Manager12 years industry exp.Joseph ChapmanMulti-AssetQuantitative Analyst2 years industry exp.Total Assets: 3.7bn*Michael PooleSpecialist Dealer9 years industry exp.Steve NaishSpecialist Dealer27 years industry exp.ConvertiblesAbsolute ReturnLuca EvangelistiFixed IncomeCredit Analyst5 years industry exp.Harry RichardsFixed IncomeCredit Analyst2 year industry exp.
- 47. 46Track record UK-domiciled bond fundMonthly returns since launchSource: FE, bid to bid, net income reinvested in GBP 30.06.08 to 30.04.13. Fund launched 02.06.08. The fund manager has the power to use derivativesbut it is intended that these will only be used for efficient portfolio management and not for investment purposes.Past performance is no guide to the future.-8-7-6-5-4-3-2-101234567Jun08Jul08Aug08Sep08Oct08Nov08Dec08Jan09Feb09Mar09Apr09May09Jun09Jul09Aug09Sep09Oct09Nov09Dec09Jan10Feb10Mar10Apr10May10Jun10Jul10Aug10Sep10Oct10Nov10Dec10Jan11Feb11Mar11Apr11May11Jun11Jul11Aug11Sep11Oct11Nov11Dec11Jan12Feb12Mar12Apr12May12Jun12Jul12Aug12Sep12Oct12Nov12Dec12Jan13Feb13Mar13Apr13%GrowthUK-domiciled bond fund Acc in GB IMA Sterling Strategic Bond TR in GB
- 48. 47Fund details Luxembourg-domiciled UCITS SICAV, unsophisticated Institutional and retail share classes (minimum investment10m and 1,000 respectively) Daily dealing and pricing; cut-off at 1pm* (LUX time) Settlement period: T+3 EUR-based fund with USD, GBP and CHF share classes (passive currency hedging) Custodian HSBC Securities Services (Luxembourg) S.A. Benchmark: Barclays Capital Euro Aggregate Corporate Index Management fees: L Class 1.25% I Class 0.50%*We recommend that you submit orders before 12.45 in order to ensure that it is processed in time for the cut-off.
- 49. 48Class nameand classcurrency Class L EuroClass L USDollarClass LSterlingClass LSwiss Franc Class I EuroClass I EuroAccumulationClass I USDollarClass ISterlingClass I SwissFrancISIN LU0459992896 LU0459992979 LU0459993191 LU0750223447 LU0750223520 LU0853555893 LU0750223876 LU0750223959 LU0750224098WKN A0YC40 A0YC41 A0YC42 A1JUF3 A1JUF4 A1J8EU A1JUF5 A1JUF6 A1JUF7Clearstreamcommon code45999289 45999297 45999319 000075022344 000075022352 85355589 000075022387 000075022395 000075022409SEDOL B58YQ00 B56LFY0 B56LCL6 B7NFNX4 B7NFPD8 B92QYR3 B7NM443 B7NM4P4 B7NM8G3Benchmarkticker code.BCPEACOR .BCPEACOR .BCPEACOR .BCPEACOR .BCPEACOR .BCPEACOR .BCPEACOR .BCPEACOR .BCPEACORPassivecurrencyhedgingNo Yes Yes Yes No No Yes Yes YesSource: Jupiter, 2012.Jupiter Dynamic Bond Fund (SICAV)
- 50. Disclosure568549Jupiter Asset Management Limited (JAM) is registered in England and Wales (no. 2036243). The registered office is 1 Grosvenor Place,London SW1X 7JJ. JAM is authorised and regulated by the Financial Conduct Authority whose address is 25 The North Colonnade,Canary Wharf, London E14 5HS.This presentation is intended for investment professionals and not for the benefit of private retail investors. However anyone attending thepresentation or who has the opportunity to view the accompanying slides should bear in mind that the value of an investment in a unit trustand the income from it can go down as well as up. It may be affected by exchange rate variations and you may not get back the amountinvested. Initial charges are likely to have a greater proportionate effect on returns if investments are liquidated in the shorter term. Quotedyields are not guaranteed. Past performance should not be seen as a guide to future performance.Jupiter Dynamic Bond: The manager has the power to invest a significant proportion of the portfolio in high yield bonds (a type of bondwith a low rating from a credit rating agency). While such bonds may offer a higher income the interest paid on them and their capital valueis at greater risk, particularly during periods of changing market conditions. Due to the overall structure of the portfolio, the level of quarterlyincome payments will not be constant and will fluctuate. This Fund can invest more than 35% of its value in securities issued or guaranteedby an EEA state. The Key Investor Information Document (KIID) and Prospectus are available from Jupiter on request. The KIID is availablefrom Jupiter on request in the following languages: English, Dutch, Finnish, Swedish, Portuguese, French and German.For your security we may record or randomly monitor all telephone calls. If you are unsure of the suitability of an investment please contactyour financial advisor. Any data or views given should not be construed as investment advice. Every effort is made to ensure the accuracyof the information but no assurance or warranties are given.