The Jupiter Global Fund - Jupiter Asset Management

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the jupiter global fund Jupiter Global Financials ■■Jupiter Global Financials Review of Portfolio as at 30 September 2012 Performance NAV 30.09.12 30.09.11 % Change Class L US Dollar Shares USD 6.95 USD 5.92 17.40% Class L Euro Shares EUR 8.26 EUR 6.74 22.55% Class L Sterling Shares GBP 9.07 GBP 8.45 7.34% Market Review Share prices made strong gains in the year to September 2012, recovering from a significant decline in the summer of 2011 when concerns over the Eurozone breaking up reached a heightened level. Positive momentum was increased when the European Central Bank launched the ‘Long Term Refinancing Operation’ at the end of December, a programme which provided liquidity to allow southern European banks to buy sovereign debt. The positive effects of this were short-lived, however, when bank deposits fled during the Greek election process in May 2012. This forced domestic banks to sell bonds and resulted in a sharp decline in equities. Despite clear indications that global economic growth was slowing, upward momentum in share prices was restored late in the period under review with the ECB committing to direct purchases of sovereign debt and the US Fed announced a third programme of quantitative easing. Policy Review For the year to 30 September 2012, the Fund returned 22.6%, compared to 29.9% for its benchmark, the FTSE AW Financials index TR in euro terms. The Fund maintained significant exposure to banks in North America which benefited from the steady recovery in the US economy and bottoming out of the housing market. We also held positions in specialist financial companies and real estate companies globally, while being more cautious on European financials. Despite losing out somewhat on recovery rallies in European stocks, the Fund made strong returns from its equity portfolio and good returns from bond positions. Although the Fund’s risk adjusted return was satisfactory, its allocation across stocks and bonds meant it lagged the benchmark return, which is 100% equity weighted. Investment Outlook The outlook for global economic growth is hampered by efforts to reduce debt in the West and slowing growth in China. This has given rise to additional central bank action as this is seen as the only way to support economies. The extended low interest rate and investment return environment in the West combined with weak economies, particularly in Europe, is unhelpful for financial company earnings although supportive for valuations. Nevertheless the improving housing market in the US and interest rate cuts in emerging markets should help restore growth to more normal levels. The risk of a crisis in Europe looks to have been contained by the strong policy measures announced by the ECB but the region remains vulnerable to any political setbacks. We see opportunities for good returns from shares of niche businesses in the less economically-sensitive parts of the financial sector and from companies investing in growth regions of the world. We also see opportunities in companies which can reduce or eliminate valuation discounts through cost reduction initiatives, mergers and acquisitions or through reallocating capital away from uneconomic balance sheets (i.e. with unproductive or unprofitable assets). Real estate assets and corporate bonds should in our view continue to benefit from the additional liquidity provided by quantitative easing. Retail property in emerging markets remains an attractive way to gain exposure to rising consumer spending and increasing affluence. Selected financial company bonds still offer attractive yields with reducing risk as balance sheets are strengthened. Guy de Blonay 30 October 2012 54
the jupiter global fund Jupiter Global Financials ■■Jupiter Global Financials Schedule of Investments as at 30 September 2012 Quantity Description Fair Value € Fair Value as a Percentage of Net Assets % Transferable securities and money market instruments admitted to an official exchange listing Equities Banks 9,065,769 33.15 24,225 ANZ Banking 483,515 1.77 25,562 Banca Generali 267,123 0.98 20,857 Banco Macro ADR 232,899 0.85 210,000 Bank of China (Hong Kong) Holdings 516,609 1.89 6,835 Bank of Georgia Holdings 109,662 0.40 14,653 Bank of Nova Scotia 633,245 2.31 19,974 BankUnited 380,774 1.39 9,249 BNP Paribas 347,462 1.27 728,000 China CITIC Bank 266,275 0.97 57,000 DBS Group 517,417 1.89 47,200 Grupo Financiero Banorte 'O' 202,574 0.74 24,904 JP Morgan Chase 783,875 2.87 805,900 Krung Thai Bank NVDR 369,766 1.35 82,546 Mediobanca 343,556 1.26 55,464 New York Community Bancorp 605,389 2.21 188,990 Philippine National Bank 256,214 0.94 72,848 Regions Financial 410,110 1.50 17,300 Sumitomo Mitsui Financial 420,809 1.54 9,958 Texas Capital Bancshares 384,446 1.41 6,822 Toronto Dominion Bank 443,374 1.62 19,824 US Bancorp 523,957 1.92 10,709 Wells Fargo & Co 287,933 1.05 49,737 Yes Bank 278,785 1.02 Computer Services 762,240 2.79 33,138 Financial Technologies (India) 474,219 1.74 2,242,654 Quindell Portfolio 288,021 1.05 Consumer Services 298,340 1.09 7,848 Ebay 298,340 1.09 The accompanying notes form an integral part of these financial statements. 55
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The Jupiter Global Fund - Jupiter Asset Management

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