(Update) Investors have used today's update from Jupiter as an opportunity to take profits on Jupiter following its impressive run, with Edison warning flows could be hit by the retail distribution review.
At 2.30pm, shares in Jupiter were down 11.5p, or 3.54%, at 313.5p after today's fourth quarter trading update, which revealed net outflows from its private client division fell for the second consecutive quarter in the final three months of the year although total assets under management rose by 5%.
While groupwide asset growth was stronger than expected, Edison analyst Jonathan Goslin fears the groups relatively high exposure to the UK could impact the group in the short-term as the effects of the RDR ripple through.
'AUM flows were stronger than expected during due to positive flows into mutual funds and segregated mandates. With its large exposure to the UK retail market, Jupiter is one of the managers most exposed to the effects of RDR so we would expect AUM flows to be more subdued over the near- term,' Goslin said in a note.
In the update, Jupiter said strong sales of its Merlin Income, Strategic Bond, UK Special Situations and offshore European Growth funds, along with winning two new segregated mandates, helped drive net inflows of £688 million in the quarter. Total assets under management rose from £24.99 billion at the end of September to £26.26 billion at the end of December, although £581 million of this was driven by market movements.
The group’s private client arm saw £8 million of net outflows, down from £46 million in the third quarter although positive market movements helped total assets under management in the division rise by 1.9% from £1.85 billion to £1.88 billion.
Jupiter chief executive Edward Bonham Carter (pictured) said: ‘Jupiter achieved another good quarter, driven by continued positive momentum from our mutual fund franchise.’
Earlier in the week, RBC Capital had suggested it might be an idea to take profits from Jupiter after its stunning run saw its premium to peer group hit an all time high.
This was echoed by Numis analyst David McCann, who in a note in response to the update, raised his target price for the company by 10% from 335p to 370p, but moderated his positive recommendation from ‘buy’ to ‘add’.
‘We still see good medium-term from the improving balance sheet and long-term value from the retail savings opportunity, but it now offers perhaps fairer value on a purely short-term basis following a very strong run recently,’ he said.
Following the trading update, Jupiter’s share price rose 1.03% or 3.3p to 325p in early morning trading before falling back.