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Jupiter’s Clunie warns investors must risk drawdowns to get returns
by James Phillipps on Oct 29, 2013 at 12:53
Back in 2011 he had a 15% exposure to bank bonds, which he said were providing double digit returns, but with a lower risk profile than the equities.
‘The beauty of this job is that I am running a global multi-asset fund, it’s the perfect structure,’ he said.
‘We have a great variety of intelligent, friendly people here and if I’m thinking of credit I will go to Ariel [Bezalel, manager of the Jupiter Strategic Bond fund] or convertibles, Miles [Geldard, manager of the Jupiter Global Convertibles fund].
‘If something interesting happens I have the freedom to buy gold, for example, but as a tourist in the asset classes I will do so respectfully.’
The Jupiter Absolute Return fund’s portfolio was something of a blank slate for Clunie, who said: ‘I inherited 97% cash and one Barclays bond.’ This goes some way to explaining why former manager Philip Gibbs’ performance was so lacklustre on the latter days of the fund, which is up 0.2% over one year and 3.7% over three years.
Clunie believes the edge he will bring is his expertise in single stock shorting, a subject which he has pursued academically and was the focus of his PhD thesis.
He very much takes an evidence-based approach, arguing that statistically following data points such as stock lending prices, crowded exits and the use of stop-losses can provide an edge.
‘I know at least as much as anyone else and that’s more than average, which means you probably have an advantage,’ he said.
One theme he is currently playing he brands the ‘value glamour spread’, the strategy being long value and short glamour or high growth stocks. ‘The scarcity premium for growth stocks should go down and value should go up.’
Clunie plans to be 75% invested within two months and said he will provide greater disclosure on the fund’s holdings then and on an ongoing basis.
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