This Market Bulletin has been produced in association with Jupiter.

Its intended to provide you with a look back at the events that have affected the
performance of global markets in the last fortnight. This is a general market update and should not be considered a comprehensive or suffcient basis
for making decisions.
Get rich slowly
Well-managed large companies should prosper over the long term
Political and economic events in recent months have had the potential to upset
markets, from conficts in Ukraine and the Middle East to the end of quantitative
easing in the US. So the team has not been surprised to see some seasonal
weakness. Over the long term, however, the managers continue to see value in
quality larger company stocks and dividend payers.
In the UK, many people breathed a sigh of relief at the frm rejection of Scottish
independence on 18th September, but the frisson of fear about the outcome
encouraged the weakening of sterling against the dollar; the team thinks that this
trend may well continue. The UK general election is only a few months away and it
is a local matter about which media commentators will wax lyrical. Markets may
worry a little about the outcome, any concerns mostly being refected in the
currency and bond markets. Overall, however, the team believes UK markets
will primarily dance to global tunes.
Many global fnancial markets have fallen as the US dollar has strengthened.
Western government bonds have been a relative safe haven, though losing a little
ground, whilst corporate bond markets have weakened some more. However, the
market saw the advent of the biggest ever fotation in September: Chinas Alibaba.
Its valuation is now bigger than that of Amazon and eBay combined. Perhaps its IPO
will, in retrospect, mark a near-term high point for that sector. Elsewhere, escalating
geopolitical tensions (US-led air strikes against ISIL, the Ukraine situation and
the demonstrations in Hong Kong), coupled with slower Chinese domestic growth
and the stronger dollar, have dented investor confdence at a time in the year when
markets often struggle. Emerging market stock markets and currencies have been
weak, whereas Japans stock market has rebounded, with an even better result for
yen-hedged* investors.
Within global equities, some of the largest US companies continue to lead, aided
by a strengthening economy fuelled by abundant and cheap energy. Coupled with
continuing low interest rates and frm domestic consumption, companies have a
decent backdrop within which to operate, in the teams view. The falling oil price,
which is 15% cheaper since June, is a help to energy consumers across the world
essentially a tax cut. As an Economist headline of the early 1980s had it: Cheaper
oil makes ya strong! Not so great for oil producers though.
There are continuing worries about economic growth in the eurozone. In mid-
September, the Organisation for Economic Co-operation and Development (OECD)
noted that this lack of growth in the eurozone was a major drag on the world
economy and recommended more monetary support for the euro area by the
European Central Bank (ECB). Various types of medicine have been proposed by
the president of the ECB, Mario Draghi, but it looks likely that quantitative easing
(QE or printing money) is the next step. Despite this, some European companies
are still able to deliver attractive growth to investors, in the teams view.
The economic fgures in Japan have been mixed and further QE there is likely.
In September, construction starts were better than expected and the labour
market saw a fve year high in the number of people employed, but industrial
production was weak. The fall in the value of the yen from QE at the start of Abes
premiership boosted profts for Japanese exporters and created some infation, but
more infation and a weaker currency is desired by the authorities. This is likely to
provide a boost to the stock market, but as a sterling investor, the team continues to
think that yen hedges are the correct way to be positioned in order to seek to beneft
from the (hopefully) stronger stock market without giving the gains back through a
weaker currency.
The autumn is often a time for stock markets to exhibit seasonal weakness. In the
background, there is the likely ending of QE by the US Federal Reserve, together
with the potential for interest rate rises in both the UK and the US. A stronger dollar
and weaker emerging markets should not be a surprise in such a scenario. Overall,
shares have travelled a long way since the fnancial-crisis-created low in March 2009.
Nonetheless, long-term savers who invest in well-managed, well-fnanced companies
which have competitive advantages in a global landscape should prosper over the
long term, in the teams view. Fund managers who buy those sorts of companies are
favourites of the team; as an advert of yesteryear used to say: Get rich slowly.
*Hedging involves making balancing or compensating transactions for an investment,
with the aim of mitigating potential losses.
Important information:
The above commentary represents the views of the Fund Manager at the time of
preparation and may be subject to change and this is particularly likely during periods
of rapidly changing market circumstances. Their views are not necessarily those of
Jupiter and should not be interpreted as investment advice. Every effort is made to
ensure the accuracy of any information provided but no assurances or warranties
are given. The value of investments and the income from them can fall as well as
rise and may be affected by exchange rate variations. You may get back less than
originally invested. The fund may use derivatives for effcient portfolio management
only and not for investment purposes.
Charges for the Jupiter Merlin Portfolios tend to be higher than for conventional Unit
Trusts to allow for a portion of the charges applicable to underlying Funds. On average
this works out at around 0.6% of the net asset value per annum. These funds can
invest more than 35% of its value in securities issued or guaranteed by an EEA state.
The NURS Key Investor Information Document (KIID), Supplementary Information
Document (SID) and Scheme Particulars are available from Jupiter on request.
Jupiter Asset Management Limited (JAM) and Jupiter Unit Trust Managers Limited
(JUTM) are authorised and regulated by the Financial Conduct Authority and their
registered address is 1 Grosvenor Place, London SW1X 7JJ. JAM and JUTM are
subsidiaries of Jupiter Fund Management plc and the group is collectively known
as Jupiter.
Weekly Statistics (source: FT)
Key performance indicators (as at Friday 24 October 16:35 GMT) Day-by-day analysis of FTSE 100 Index
In association with
CURRENT
VALUE
10 DAY
% CHANGE
FTSE 100 6, 388 + 0.86%
Dow Jones 16, 743 + 1.37%
Nikkei 225 15, 291 - 1.00%