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Jupiter Green Investment Trust Plc
20 December 2023
Jupiter Green (JGC)
20/12/2023
Results analysis from Kepler Trust Intelligence
In the six months to 30/09/2023, Jupiter Green (JGC) delivered a
NAV total return of -10.0% and a share price total return of
-11.4%. In comparison, the trust's benchmark, the MSCI World Small
Cap Index, increased by 0.1% over the period.
The challenging macroeconomic environment weighed on the trust's
performance during the period, with the threat of 'higher for
longer' interest rates prompting a deterioration in investor
sentiment towards growth equities. A headwind to environmental
solutions equities was the UK government's push-back in net-zero
targets for the phasing out of gas boilers and non-electric
vehicles.
The trust's discount widened from 12.7% to 18.6% during the
period and has subsequently widened again to 20.6% since the period
end. The board has used share buybacks to manage the trust's
discount, buying back GBP1.9 million of shares at an average
discount of 15.9% to NAV during the period.
Chairman Michael Naylor said: "We are disappointed with the
performance of the portfolio over the period, however due to the
prevailing macroeconomic environment, we are of the belief that the
prospects for the portfolio companies and their respective
addressable markets remains undimmed. As attitudes toward
addressing climate solutions shift, there is a broadening of the
value chain beyond the conventional lens. The opportunities
throughout the market that this creates will be plentiful and we
firmly believe the Jupiter Green Investment Trust remains
well-positioned to identify them."
Jupiter Green (JGC) has a broad-ranging remit to invest in
companies providing solutions to environmental challenges from
across the global investment universe. Manager Jon Wallace has
identified six key themes that underpin the trust's investing
strategy, with around 70% of the portfolio allocated to the
circular economy, clean energy and green buildings and industry (as
at 30/09/2023).
The environmental sector offers strong long-term growth drivers,
reinforced by recent events. The invasion of Ukraine prompted a
renewed focus on energy security, and the role of renewables in
diversifying energy mix. There has also been increasing regulation
in the sector, including the US government's landmark commitment to
investing in clean energy and other environmental solutions in the
US Inflation Reduction Act (IRA) last year. And in the last few
weeks, the COP28 summit in Dubai has prompted a wave of new
international pledges from UN members on decarbonisation, food
security and climate change.
We think the accelerating pace of regulatory change is
supportive of the investment thesis for environmental solutions
companies, despite the challenge of rising interest rates for
capital-intensive businesses over the last year. It's also an area
that benefits from active management by experts that can identify
the likely success stories amongst a large group of innovators
targeting different themes. Despite a challenging half-year, JGC
has delivered a strong long-term performance for investors, with a
five-year NAV return of 38.4% (as at 17/12/2023).
A reversal in the interest rate cycle and improvement in
investor sentiment towards small-caps could provide the impetus for
a recovery in valuation. Given that environmental solutions are
likely to remain at the forefront of regulation and global
development, the current discount may prove an attractive entry
point for investors wanting exposure to an actively-managed trust
in this sphere.
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December 20, 2023 05:25 ET (10:25 GMT)
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