Following last week’s announcement that a pair of Gam managers are moving to Jupiter with their equity fund in the new year, we thought it worth looking into what the switch means for our DFMs.
Long-serving duo Adrian Gosden and Chris Morrison are bringing the £400mn Gam UK Equity Income fund to Jupiter in 2024.
Not only this, they will at some point next year assume management of the Jupiter Income Trust, currently managed by the high-profile Ben Whitmore.
It will have been an easy enough deal to do: Gosden is an alumnus of the Artemis Income fund before joining Gam, while Jupiter chief executive Matthew Beasley was previously chief investment officer at Artemis and head of investments at Gam.
Some readers will ask what Jupiter is going to do with two high profile UK equity income managers.
Well, Whitmore is going nowhere and will continue to run his other mandates at Jupiter and surely be a vocal internal voice in terms of how that fund is run.
With this in mind we decided to set the two funds side by side and see how they compare to other picks in the domestic income sector.
Jupiter Income Trust is £1.5bn in size and has somewhat moderate ambitions: aiming to generate ‘income that increases at least in line with inflation”, albeit that has looked a tougher aim over the past year or so.
The fund has underperformed its competitors in the IA UK Equity Income space over five years, returning 16.6 per cent while the peer group averaged 21 per cent.
It comes with a hefty 1.29 per cent management fee, which Jupiter has judged ‘fair value’, but which is not far off twice what others in the sector charge.
In fact Jupiter Income hasn’t been owned by a single fund selector in our database since early 2022.
The Gam fund wears its value style focus more firmly on its sleeve and seems to have fared better, notching a 24 per cent total return over five years and recording top quartile performance over three years.
Despite being run by a high profile manager, the Gam fund is also not owned by a single allocator we cover and hasn’t been since late 2020.
Instead, allocators prefer one product in particular: Evenlode Income, run by Hugh Yarrow.
Asset Allocator recently covered the surge in popularity for this offering.
Currently £3.4bn in size, it’s now held by eight of the DFMs we cover, overtaking CT UK Equity Income with five and Artemis Income with seven.
Performance has been strong, with first quartile returns achieved over five years, netting a 34 per cent gain while the IA UK All Companies sector returned 15 per cent in the same time period (this fund doesn’t sit in the UK equity income sector due to its yield requirements).
Jupiter may well be hoping that allowing Whitmore to focus on the £2bn Jupiter Special Situations fund (which is one of the more popular UK growth funds in our database) and bringing in a big name like Gosden to focus on UK equity income will allow the company to gain a foothold in the sector among allocators.
