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Tony Nutt, Jupiter Income fund manager, announces his retirement

Tony Nutt, one of the longest serving fund managers in the country, has announced his retirement. How should investors respond?

 
Tony Nutt, Jupiter Income fund manager, announces his retirement

Tony Nutt, one of the longest serving equity income fund managers in the country, has announced his retirement, raising the question over how his many investors should respond.

Nutt, 59, shot to prominence in 2000 when he took over Jupiter Income , at the time the flagship fund for Jupiter Asset Management, after its manager William Littlewood (now running Artemis Strategic Assets ) left the company complaining of burnout and chronic fatigue.

However, Nutt, who started his investment career at Lloyds TSB before moving to Flemings, first made his name managing the £530 million Jupiter High Income from its launch in 1996. He also managed the £37 million Jupiter Dividend & Growth investment trust and co-ran the £270 million Jupiter Distribution fund with bond fund manager John Hamilton.

Nutt will pass Jupiter Income to Ben Whitmore, manager of Jupiter’s UK Special Situations fund, in the New Year, and hand the High Income fund to Philip Matthews, manager of the firm’s Growth & Income fund, next July before retiring in 2014. No date has been set for the handover of the Dividend & Growth investment trust.

Great track record tailed off

Nutt’s long-term track record is excellent, with Jupiter Income more than doubling investors’ money under his management.

The High Income fund has also been a strong performer. According to figures from Jupiter, the fund has delivered a total return of over 352% since its launch sixteen years ago, placing it at the top of the UK Equity & Bond Income sector.

Recent performance, however, had been comparatively poor with both funds slipping to the bottom of their sectors over three and five years.

Although respected for his value-driven and contrarian style of stock picking, Nutt’s funds were badly hit in the financial crisis and later by BP scrapping its dividend after the Gulf of Mexico oil spill in 2010.

Influential financial advisers such as Principal Investment Management and BestInvest dropped their recommendations of his funds as performance sagged.

A sign of the problems Nutt faced is shown by his Citywire performance rating history which you can see on his factsheet. Having gained a AA rating when Citywire launched the ratings in 2002 Nutt consistently won a rating for every month until February 2008. He has not been rated since, however.

Today’s announcement follows speculation over when he would step back. Nutt, who stayed on at Jupiter Fund Management (JUP.L) after its founder John Duffield quit the company to set up rival New Star Asset Management, sold half of his stake in the firm for £13 million in the summer. In a statement he spoke of his pride at helping to build the investment team at Jupiter over 17 years.

What should investors do?

The usual advice for investors in these situations is to sit tight and see what happens. This is the definitely the case on this occasion as both fund managers succeeding Nutt were trained by him and are proven good investors. Both Ben Whitmore and Philip Matthews currently have Citywire A-ratings for their three-year returns on the funds they manage. Matthews’ Jupiter Growth & Income fund is also a ‘star pick’ of our Citywire Selection team.

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