With nearly a quarter of his SICAV fund invested in Australian Government bonds, it is clear that Ariel Bezalel is not afraid to take a view. This exposure dates back to when these bonds were yielding more than 6%. Fast forward to today, and this figure has come down to 3%, yet the Jupiter Dynamic Bond Fund he has run since its inception, just shy of three years ago, still retains a long position in the portfolio.
“Throughout the history of the fund, we’ve done a lot of stuff that other investors in the fixed income world wouldn’t dream of, including some of the murkier parts of the credit universe such as oil rigs and pub securitisations,” Bezalel says.
The decision to label the fund ‘dynamic’ was aimed at reflecting its active approach to geographic exposure around the world, the bond ratings spectrum it taps into and “taking the odd currency bet” as well.
Right fund, wrong time
Bezalel joined Jupiter in 1997 as an assistant on the fixed income desk, where he developed early experience in running more conservative portfolios and an emerging market debt fund. Armed with this credit knowledge and the macro picture, it made sense to launch the UK-authorised Strategic Bond Fund, although the timing in the middle of 2008 proved less than perfect.
“We went to bargain basement prices in the January sales. We felt that with the monetary and fiscal easing that inevitably was going to happen, credit would be a really compelling story for investors. We held on tight to our positions in 2008, had a cracking 2009 and the rest is history.”
The Dynamic Bond Fund came onstream in 2012 from talking to investors outside the UK about the Strategic Bond Fund. “When we took it to Jersey, investors were saying, ‘Yes, I like it, but I can’t buy it. It’s a unit trust, we want a SICAV. We want an offshore product’.”