Fitch Downgrades Jupiter Japan Select SICAV to 'Satisfactory'

Tue Apr 15, 2014 3:15pm EDT

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(The following statement was released by the rating agency) LONDON/PARIS, April 15 (Fitch) Fitch Ratings has downgraded Jupiter Japan Select SICAV's Fund Quality Rating to 'Satisfactory' from 'Strong'. It has simultaneously removed the fund from 'Under Review'. KEY RATING DRIVERS Fitch has downgraded the fund as its performance no longer meets Fitch's criteria guidelines for a strong performance track record. The fund was underperforming prior to a portfolio manager change in October 2013. The new portfolio manager's style could yield improved results for the fund in the future but has not done so as yet. Fitch judges the fund's investment process as 'Satisfactory'. Fitch placed the fund 'Under Review' in September 2013 at which time it identified continued underperformance as a potential driver of a downgrade to 'Satisfactory'. FUND PROFILE Jupiter Japan Select SICAV is a long-only equities fund investing primarily in Japan and in selected opportunities in Asia. The fund is domiciled in Luxembourg with USD102m of assets as of end-February 2014. INVESTMENT PROCESS The fund is actively managed without regard to index weighting and comprises a target of 40-50 stocks. The fund now has a growth bias and the capacity for some smaller market capitalisation exposures, since the new portfolio manager took over in October 2013. The proprietary fundamental equity research focuses on resilient companies with sound earnings prospects, management, franchise, and cash flow generation. RESOURCES The fund is now managed by Dan Carter (11 years' relevant investment experience; six years' tenure), who took over management of the fund from Simon Somerville. Together they form Jupiter's Japanese equities team. In line with Jupiter's investment culture, the portfolio manager is highly accountable and benefits from significant leeway in portfolio construction. Independent functions and committees provide risk and performance oversight. TRACK RECORD The fund has underperformed both the Lipper global category "Equity Japan" by 7.2% and the index, TOPIX, by 9.3% over the last three years to March 2014. Its one year and year-to-date performance is fifth (ie lowest) quintile compared with peers. FUND MANAGER Jupiter is a listed, UK, retail-focused asset manager, with GBP31.7bn assets under management at end-2013. RATING SENSITIVITIES Should the fund demonstrate sustained outperformance compared with peers or the index for at least one year Fitch may then review its quantitative assessment of the fund's track record and consequently upgrade the fund's rating. Conversely should the fund continue to underperform Fitch may then review its qualitative assessment of the fund's investment process, which could lead it to downgrade the rating. Fund quality ratings may be sensitive to material changes in the investment or operational processes or market risk profiles of the fund. A material adverse deviation from Fitch's guidelines for any key rating driver could cause Fitch to downgrade the ratings. For example, notable structural deterioration in the fund's performance or departure of key investment professionals may cause Fitch to review the rating. Fitch's Fund Quality Ratings combine Fitch's experience in qualitative fund analysis with rankings and performance data from Lipper, a Thomson Reuters company. Fitch's Fund Quality Ratings offer an independent, forward-looking assessment of a fund's key performance and risk attributes and consistency of longer-term returns, relative to peer group or benchmarks. The ratings focus on the fund manager's investment process, key fund performance drivers, risk management, and the quality of the fund's operational infrastructure. For more information, please see www.fundmanagement.fitchratings.com. To receive forthcoming Fund Quality Rating research, opt in at: here Contact: Primary Analyst Alastair Sewell Senior Director +44 20 3530 1147 Fitch Ratings Limited 30 North Colonnade LondonE14 5GN Secondary Analyst Manuel Arrive, CFA Senior Director +33 1 44 29 91 77 Committee Chairperson Davie Rodriguez, CFA Senior Director +1 212 908 0386 Media Relations: Hannah Huntly, London, Tel: +44 20 3530 1153, Email: hannah.huntly@fitchratings.com. Additional information is available on www.fitchratings.com Applicable criteria, 'Fund Quality Rating Criteria', dated 19 September 2011, are available at www.fitchratings.com. Related research: Fitch Places Jupiter Japan Select's 'Strong' FQR 'Under Review' (10 September 2013) Jupiter Japan Select SICAV (1 October 2013) Applicable Criteria and Related Research: Fund Quality Ratings Criteria: Assessing Funds’ Investment Processes and Operational Attributes here Additional Disclosure Solicitation Status here ALL FITCH CREDIT RATINGS ARE SUBJECT TO CERTAIN LIMITATIONS AND DISCLAIMERS. PLEASE READ THESE LIMITATIONS AND DISCLAIMERS BY FOLLOWING THIS LINK: here. IN ADDITION, RATING DEFINITIONS AND THE TERMS OF USE OF SUCH RATINGS ARE AVAILABLE ON THE AGENCY'S PUBLIC WEBSITE 'WWW.FITCHRATINGS.COM'. PUBLISHED RATINGS, CRITERIA AND METHODOLOGIES ARE AVAILABLE FROM THIS SITE AT ALL TIMES. FITCH'S CODE OF CONDUCT, CONFIDENTIALITY, CONFLICTS OF INTEREST, AFFILIATE FIREWALL, COMPLIANCE AND OTHER RELEVANT POLICIES AND PROCEDURES ARE ALSO AVAILABLE FROM THE 'CODE OF CONDUCT' SECTION OF THIS SITE. FITCH MAY HAVE PROVIDED ANOTHER PERMISSIBLE SERVICE TO THE RATED ENTITY OR ITS RELATED THIRD PARTIES. DETAILS OF THIS SERVICE FOR RATINGS FOR WHICH THE LEAD ANALYST IS BASED IN AN EU-REGISTERED ENTITY CAN BE FOUND ON THE ENTITY SUMMARY PAGE FOR THIS ISSUER ON THE FITCH WEBSITE.

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