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Jupiter Green Investment Trust Plc
18 July 2023
Jupiter Green (JGC)
18/07/2023
Results analysis from Kepler Trust Intelligence
In the year to 31/03/2023, Jupiter Green (JGC) delivered share
price total returns of 6.7%. NAV total returns were close to flat
over the period, falling by 0.4%. In contrast, the trust's
benchmark, the MSCI World Small Cap Index, declined by 5.2% over
the period.
The trust's discount tightened from 18.7% to 13.4% over the
year, although it has widened again to 16.6% since the period end.
The discount tightening was partly due to the trust's buyback
mechanism, with the JGC board repurchasing 328,726 shares over the
period, equal to approximately 1.6% of shares in issue. Shares were
repurchased at an average discount of 14.4% to NAV.
The JGC managers initiated new positions in several stocks.
Leading engineering software firm Ansys was one example, with the
firm releasing a strong set of financials in February of this year
that helped drive performance for JGC. The managers also added to
existing holdings in the semiconductor companies Infineon and
Monolithic Power.
JGC Chair Michael Naylor said: "The Jupiter Environmental
Solutions team has a long-established record of investing in
emerging and established green technologies, and it is their
long-held conviction that solving environmental challenges will be
critical to continued global development. Addressing both the
causes and effects of these climate challenges will become
inevitable, and as such Environmental Solutions as an asset class
are no longer deemed peripheral. The development of technologies
through innovation are key to combatting the world's climate and
environmental crisis."
Kepler View
Jupiter Green (JGC) has a wide remit that enables it to invest
in companies providing solutions to the plethora of environmental
problems the world faces today. The smaller size of the trust means
Manager Jon Wallace can be more flexible and invest in smaller,
fast-growing companies that offer greater long-term growth
potential to investors.
It was a volatile year for JGC, as illustrated by its discount,
which traded within a c. 20% range band in the 12 months to
31/03/2023. Despite tightening during the period, the discount has
since widened again to 16.6% as at 13/07/2023. Looking back at the
past decade, the trust has traded at its widest discount to NAV
over the last 18 months. That seems likely to have been driven by
fears about the viability of smaller companies in a recession and
wider volatility stemming from the war in Ukraine. Some companies
in the portfolio were also impacted by the froth we saw in markets
during 2020 and 2021.
Understandable though these concerns may be, we think JGC now
sits at an interesting juncture. The trust saw a decline in NAV at
the end of 2021, as inflation came into play and rate hikes began,
which it is yet to fully recover from. At the same time, the
trust's shares continue to trade at close to a record discount to
NAV. Fundamentals for companies in the portfolio remain largely
strong and the trust managers have also been prudent in their use
of gearing.
As a result, if there is negativity to come then a lot of it has
arguably already been priced in - with the trust's discount
providing a cushion against any further downturns. Given the
positive momentum behind the companies the trust looks to invest
in, it may be the case that this proves to be an attractive entry
point for investors in the trust.
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July 18, 2023 06:50 ET (10:50 GMT)
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