Savers lose thousands over Jupiter’s £1.1bn fund

SAVERS have lost thousands of pounds after investing in a £1.1bn fund run by asset manager Jupiter that had backed small unlisted companies such as Starling Bank.

Investors in the Jupiter UK Mid Cap fund have lost almost 30pc of their cash in the past three years.

An investment of £9,432, the average stocks and shares Isa balance, three years ago would now be worth £6,644.

The fund, which backs public and private mediumsized businesses, was once popular among DIY investors but has fallen out of favour after weak returns. The Financial Conduct Authority said it had asked Jupiter for regular updates on its fund.

Retail customers using Fidelity International, one of Britain’s largest brokers, have been blocked from making new investments in the fund amid industry concerns over the proportion of unlisted companies it holds. Financial advisers can still invest. The fund, managed by Richard Watts, has has been offloading a multimillion-pound investment in Starling Bank.

As of the end of November, it made up 5pc of the fund’s portfolio. Unlike investment trusts, open-ended funds such as Jupiter UK Mid Cap do not have shares that trade daily on the stock market. This makes it harder for managers to control portfolio allocation when faced with high outflows. Fidelity declined to explain why it had banned new investments. But said those who owned the fund were able to sell holdings.

Ryan Hughes, of broker AJ Bell, said: “An open-ended fund should not be anywhere near unquoted companies. It is a liquidity disaster waiting to happen.”