Fund of the week: Gifted manager finds value in banks
Oct 09, 2009
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When RBS almost followed Lehman Brothers into bankruptcy last year, the Jupiter Financial Opportunities Fund actually rose in value. It sold out of shares just before the market crashed and is now up 50.5% over one year against a 7.4% fall in the FTSE Financial index. That's thanks to piling back into the market just before it started rallying again in March. So who is running this uber-fund?
The answer is Cambridge graduate and qualified chartered accountant Philip Gibbs, who has managed it since launch in 1997. In September 2008, he had less than 20% invested in shares, with the rest in US Treasuries and cash. By February this year, he had 83% of his portfolio in cash. Then he started buying shares just before the FTSE hit its March low of 3,512, so now he has just 10% in cash.
Seeking lowly rated stocks with strong underlying growth, he believes that the British banking sector now looks incredibly cheap – having fallen by more than 50% from its peak. The 31-stock fund is biased towards investment banks, which Gibbs believes have fewer capital problems than their pure high-street peers.
Indeed, he thinks the sector could rally another 20% over the next few months. Interest-rate rises could also be very good for banks' margins, says Gibbs. He tips high-street giants Barclays and HSBC, as well as JP Morgan Chase and Norway's BNG Nor as being well positioned to benefit.
"We wouldn't normally suggest a specialist fund as a core investment", says Mark Dampier of IFA Hargreaves Lansdown. "However, I believe the Jupiter Financial Opportunities Fund is an exception for the simple reason that it is run by a truly gifted manager."
Contact: 020-7314 7600.
Jupiter Financial Opportunities Fund top ten holdings
| Name of holding | % of assets |
|---|
| Barclays |
7.07 |
| JPMorgan Chase & Co |
6.86 |
| Bank of America Corp |
6.22 |
| DnB NOR ASA |
6.01 |
| HSBC Holdings PLC (UK Reg) |
4.79 |
| BNP Paribas SA |
4.47 |
| Credit Suisse Group |
4.18 |
| Prudential |
4.13 |
| Goldman Sachs Group |
4.07 |
| Banco Santander SA |
3.97 |
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