Jupiter closes in on 10% share of FoFs market

Jupiter’s Merlin multi-manager range has built up a 9% market share of the growing UK fund of funds space with close to £4bn under management.

All four Jupiter Merlin products - run by John Chatfeild-Roberts and team- are among the top 14 largest UK fund of funds vehicles, according to Trustnet.

Jupiter, through its Income, Growth, Balanced and Worldwide funds, now controls 9%, or £3.86bn, of the £42.7bn UK funds of funds industry, IMA figures reveal.

The group's popularity comes during a strong period for the UK fund of funds space, with total retail fund sales climbing to £3.9bn last year, almost four times the 2008 figure and the highest ever recorded.

"We have seen significant growth year-on-year and the main reason for this has been the growing adviser trend of outsourcing investment expertise," Jupiter UK wholesale director Simon Hines says.

"We have also benefited from having the same team together under John for 10 years, which is a track record not many others in the industry can match."

Chatfeild-Roberts is currently cautious on near-term market prospects, building up cash weightings of between 6.3% and 11.2% across the Merlin range in preparation to invest into periods of weakness caused by heightened market volatility.

However, the Merlin team says the managers of their underlying funds are well positioned to outperform during 2010 - expecting dividends to form a large part of these returns.

"Investors are now beginning to favour higher quality companies, with strong fundamentals that are reasonably priced and able to maintain or grow their dividends, even in a low-growth environment," Chatfeild-Roberts says.

While the managers believe demand for commodities in emerging economies could fluctuate in the short-term, they still believe in the longer-term secular growth story. The managers have recently added Evy Hambro's BlackRock Gold & General fund across all four of their portfolios, which sits alongside the Physical Gold ETF.

"BlackRock Gold & General provides a different way of getting exposure to the gold story," Merlin manager Peter Lawery says.

"Gold stocks have lagged the historical relationship to the gold price due to rising production costs but now the oil price has stabilised, there is potential for the valuations of gold stocks to catch up with gold price appreciation."