LONDON (Alliance News) - Jupiter US Smaller Companies PLC said Thursday it outperformed its benchmark in its most recent financial year after changes were made to its portfolio construction
The company's net asset value per share grew 21% to 1,103.43 pence in the year to June 30 from 911.08p the year before. This placed its performance well ahead of the 14% increase recorded by its benchmark, the sterling-adjusted Russell 2000 (price return) Index.
Following the US investor's "disappointing results" last year, it implemented two changes to its portfolio construction. These changes were to increase its sell disciplines and to increase its holding where long-term potential was seen.
Jupiter said that the stronger performance in its financial 2018 year came largely through stocks with a market cap under USD1 billion.
"The best performing sectors were healthcare, energy and consumer discretionary, whereas the laggards were utilities, financial services, and materials & processing," the company said.
The company said that its stock selection was poor in both healthcare and energy during the year.
Total income for the period increased to GBP28.0 million from GBP26.5 million.
"The more domestically focused smaller companies sector appears to have shaken off concerns about rising interest rates: the outlook for profits growth is quite good," said Jupiter's fund manager Robert Siddles.
"The portfolio holds many exciting undervalued entrepreneurial companies with excellent long term prospects where insiders have substantial personal investment. These should benefit shareholders in the future," Siddles added.
The company did not propose a dividend but intends to instigate a buyback of 15% of its shares in order to further narrow its share discount, which had already narrowed to 6.7p from 8.7p. At a maximum, the company can pay 105% of the average middle market quote for its shares via buyback.
Shares in Jupiter US were down 0.1% at 1,088.85 pence on Thursday, which would indicate a maximum buyback price of around 1,143.29 pence.