Jupiter Asian Income

Jason begins by assessing the economic, political and geopolitical outlook for individual countries before carrying out detailed research into prospective holdings. He predominantly looks for large, liquid companies from markets such as Australia, Taiwan, Singapore and India, although the portfolio’s geographical positioning can change as opportunities develop.

The team seeks financially strong businesses with sustainable competitive advantages, good corporate governance and management teams that treat minority shareholders fairly. Companies must also generate sufficient cash to support dividends and future growth.

The majority of holdings are expected to offer an attractive dividend yield, while up to 20% of the portfolio can be invested in lower-yielding companies with strong dividend-growth potential. The fund aims to provide an income at least 20% higher than its benchmark over time.

The portfolio is deliberately concentrated, typically holding around 25–40 companies. The managers have held no mainland Chinese equities since 2022, reflecting their concerns around governance, geopolitics and shareholder alignment. However, some portfolio companies may still generate revenues from China through their wider business activities.

Asian equities generally carry more risks than UK or other developed stock markets and regional currency fluctuations add to risk levels. However, Jupiter Asian Income fund does have exposure to a range of different currencies which should help with stability. It also diversifies across different sectors. The income focus has helped to make the fund less volatile than its peers and its benchmark.

The fund invests in a relatively small number of companies, meaning the performance of each holding can have a meaningful impact on returns. Its geographical positioning can also differ substantially. A particularly important differentiator is the fund’s decision not to invest in mainland Chinese equities. This reflects the managers’ concerns around geopolitics, governance and the alignment of Chinese companies with overseas shareholders. It means the fund can look very different from both its benchmark and many peers, which investors should understand before investing.

The emphasis on large, liquid companies and dividend-paying businesses has historically contributed to lower volatility than many peers. Liquidity remains an important part of the managers’ stock-selection and portfolio-construction decisions.

The primary goal of this fund is to provide strong, long-term returns for investors from a combination of income and capital growth. Jason considers ‘stewardship’ to be an integral part of the process, which includes the consideration of all risks the portfolio is exposed to, such as ESG factors. He incorporates this on a case-by-case basis, with each company’s individual position addressed in isolation. Each stock is reviewed for the potential ESG exposure it offers the fund, and whether or not this risk is priced in to the stock’s valuation. The outcome of this analysis will affect the investment decision, including the position size, the engagement strategy with the management should Jason feel there could be improvement, or a sell decision should the situation change going forward.