JUPITER ASIAN INCOME L

Investment Process

The investment process combines both bottom-up and top-down economic analysis. Manager Jason Pidcock seeks between 30 and 35 highly liquid, quality companies most of which pay a dividend yield which is higher than that of the wider market. His focus is on robust companies with strong balance sheets, competitive advantages, high barriers to entry and scalable, sustainable business models. He also wants their management teams to be committed to sharing company profits with shareholders via dividends. Pidcock regularly meets with these managers and reads third-party research to build a clearer picture of a company. As part of his due diligence, he analyses companies’ balance sheets to understand how sustainable the free cash flow generation is and learns from managers how cash is deployed. Valuation is a key consideration and several metrics are used, including the price to earnings (P/E) and price to book (P/B) ratios, both relative to peers and the company’s own history. From an economic perspective, Pidcock considers the political, economic and currency drivers and risks which could negatively impact returns. This can act as a natural limit on portfolio concentration - even if the team believed that the region’s ten best companies were operating within a single sector in a single country, it is highly unlikely that they would allocate to all of them. Conviction drives position sizes, with the largest holdings capped at 7% at acquisition, and no holding likely to account for less than 1% of the portfolio, in order to preserve the concentrated approach. Most holdings have market valuations between $15billion and $60billion.