Commenting on the historic election of Barack Obama as President of the United States, Sebastian Radcliffe, manager of the Jupiter North American Income Fund, said: "America has clearly embraced the need for change. However, the Obama team have played their cards very close to their chest in terms of policy detail, excepting broad promises on climate change, infrastructure, energy and tax cuts for low income earners.

"With the US economy falling into recession and the financial system in crisis, Obama cannot wait until 20 January - when he officially moves into the White House - to take the reins. The world has high expectations of him and he needs to quickly translate what so far has been eloquent rhetoric into strong, decisive policy action and  the kind of leadership that has been sadly lacking from the administration through this crisis.

"The appointment of Treasury secretary has taken on a pivotal level of importance. If Obama can appoint someone with a high degree of international credibility, such as Larry Summers (Secretary of the Treasury under Bill Clinton), and investors get the sense that the new team knows what it is doing, investor sentiment could improve dramatically.

"However, there are also significant risks that Obama may implement policies that damage investors long term, such as restrictions to free trade and too harsh a level of financial regulation. So, in my view the jury should remain out on this new presidency until we start to see some 'meat' on the bones of his policies.

"My focus in the Jupiter North American Income Fund remains on the defensive side, although less so than earlier this year. In recent weeks I have taken advantage of market volatility to reduce my cash position from around 15% to 4%. However, rather than add new positions to the portfolio, I have chosen to add to existing positions.

"The main move in sector terms has been to selectively reduce my underweight position in financials towards a neutral position on the view that a number of stocks were trading at undeservedly distressed levels. I have, for example, added to my position in ACE, the insurer, which could be a beneficiary of business moving away from AIG."

6 November 2008

NOTE

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.