A good set of results sent Jupiter higher, up 3.8% to 274p. The fund manager saw net inflows of £600m in the third quarter, as clients opted for its more cautious fund range in the uncertain global economic climate.
Inflows to the mutual funds business totalled £795m but the total was held back by the loss of one mandate and the withdrawal of the remainder of a large private client portfolio. Overall assets under management rose to a whopping £25bn in the three months to September.
The company said:
While mutual funds flows have improved, we remain cautious looking forward given fragile consumer confidence and industry flows remaining vulnerable to any increase in stock market volatility.
David McCann at Numis has a buy rating on the stock, with a price target of 320p. He said the inflows into Jupiter's mutual funds was driven by an improvement in flows from European investors and "encouragingly" also from UK investors. He writes:
Jupiter's short term economics in absolute terms will be constrained by market levels and sentiment. We concede it is therefore hard to build a strong short term investment case, given that earnings growth is likely to be modest and could easily go backwards under weakening conditions. You are however paid reasonably well to wait, with a c.3% yield and we believe there is scope to significantly uplift the dividend, possibly by as much as 100% in the next 2.5 years, as the balance sheet continues to improve to a level, beyond which the group will need to retain a far lower proportion of earnings.
