Challenge
Seeking progressive dividend income from a portfolio of UK stocks across the market cap spectrum.
Solution
The Jupiter UK Multi Cap Income strategy aims to deliver an income in excess of the market’s and that grows above inflation, along with the potential for capital growth. The strategy’s objective is to provide income and achieve capital appreciation. The fund managers look to invest in undervalued companies that can generate strong free cash flows relative to their size – from large multinational corporates to smaller domestics – and that have progressive dividend policies.
The fund managers have more than 30 years’ experience as UK income investors and believe in the powerful effect for portfolios of compounding dividends.
The UK stock market has a long tradition of income investing and is dominated by companies in dividend-rich sectors. Financial, pharmaceutical and energy companies have the biggest weightings in the FTSE All Share index.
Long-run cumulative performance from low- and high-yielding UK stocks, 1900-2023
Benefits
- Targets reliable growing income
- Flexible across market cap
- Experienced fund managers
- Dividend rich market
Fund specific risks
- Interest Rate Risk - The strategy can invest in assets whose value is sensitive to changes in interest rates (for example bonds) meaning that the value of these investments may fluctuate significantly with movement in interest rates.e.g. the value of a bond tends to decrease when interest rates rise
- Pricing Risk - Price movements in financial assets mean the value of assets can fall as well as rise, with this risk typically amplified in more volatile market conditions.
- Market Concentration Risk (Geographical Region/Country) - Investing in a particular country or geographic region can cause the value of this investment to rise or fall more relative to investments whose focus is spread more globally in nature.
- Derivative risk - the strategy may use derivatives to generate returns and/or to reduce costs and the overall risk of the strategy. Using derivatives can involve a higher level of risk. A small movement in the price of an underlying investment may result in a disproportionately large movement in the price of the derivative investment.
- Counterparty Default Risk - The risk of losses due to the default of a counterparty on a derivatives contract or a custodian that is safeguarding the strategy's assets.
- Smaller Companies - The strategy invests in smaller companies, which can be less liquid than investments in larger companies and can have fewer resources than larger companies to cope with unexpected adverse events. In less favourable market conditions these companies may therefore under-perform larger companies and the strategy may under-perform funds that invest predominantly in larger companies
Important Information
This is a marketing communication. This document is intended for investment professionals and is not for the use or benefit of other persons. This document is for informational purposes only and is not investment advice. Market and exchange rate movements can cause the value of an investment to fall as well as rise, and you may get back less than originally invested. The views expressed are those of the individuals mentioned at the time of writing, are not necessarily those of Jupiter as a whole, and may be subject to change. This is particularly true during periods of rapidly changing market circumstances. Every effort is made to ensure the accuracy of the information, but no assurance or warranties are given. Holding examples are for illustrative purposes only and are not a recommendation to buy or sell. Issued in the UK by Jupiter Asset Management Limited (JAM), registered address: The Zig Zag Building, 70 Victoria Street, London, SW1E 6SQ is authorised and regulated by the Financial Conduct Authority. No part of this document may be reproduced in any manner without the prior permission of JAM/JAMI.