Fund Focus: Jupiter Merlin Income

By RICHARD DYSON
Updated: 06:06 EST, 23 March 2009

Minimising investors' losses during the financial crisis is the prime motivation of John Chatfeild-Roberts, head of a team of managers running Jupiter's four Merlin portfolios, which invest mainly in other funds.

The biggest is Jupiter Merlin Income.

Chatfeild-Roberts is extremely cautious. With no end to the world's economic woes in sight, he has held gold for much of the past year, increasing it recently to a tenth of the portfolio.

He eschews companies with debt - they will struggle to refinance - and continues to be wary of all financial firms. Illiquid assets, like property, are also anathema.

He was among a minority of fund managers who sounded alarms on commercial property well before the market imploded.

Chatfeild-Roberts's wary outlook leaves him focused on relatively few secure companies able not only to survive the apocalypse but still pay dividends.

These include pharmaceutical, oil and telecoms firms.

'Shell hasn't cut its dividend since before the Second World War,' he says.

'These companies are committed to dividends and if the divi looks safe and sustainable, today's market offers a chance to buy them cheaply.'

While he fears further market turmoil, he is also anxious about missing the rebound. 'When it happens, it can be breathtakingly swift,' he says.

In a 12-month period in the Seventies the FTSE fell 75%, followed by a 100% surge in weeks. 'To be out of the market for the recovery can be painful,' he says.

His other anxiety is that governments' frenzied spending to ease the crisis will trigger inflation.

'At that point, people will need to own real assets, like shares and property, again,' he says.