Last checked at 
22 Jul 2022 14:47
Jupiter Green (JGC)
22/07/2022
Results analysis from Kepler Trust Intelligence
Jupiter Green (JGC) has released its financial results for the year ending 31/03/2022. NAV and share price total returns for the period were down 3.1% and 20.5% respectively, compared to a 2.6% increase in the trust's benchmark, the MSCI World Small Cap Index.
The period was undoubtedly an extremely challenging one for the sorts of companies that JGC invests in. The mix of inflationary concerns and instability stemming from the war in Ukraine meant there was downward pressure on equities markets as a whole in the second half of the trust's financial year, but this was particularly pronounced for more growth-oriented companies in the environmental solutions and green energy sectors.
Despite these challenges, the manager believes the long-term prospects of the sectors that JGC focuses on remain very positive. Environmental solutions and green energy remain vital tools against the problems posed by climate change, with their importance and influence likely to grow in the years ahead.
Kepler View
Jupiter Green (JGC) has long provided investors with exposure to companies operating across the various niches that make up the environmental solutions sector. The trust now has a bias towards small and medium-sized businesses, with manager Jon Wallace favouring those firms which look capable of delivering higher capital growth for shareholders. The trust's small size means it has been able to take stakes in many firms that would be off limits to larger players in the market.
The companies JGC invests in have proven to be extremely volatile over the past few years. Having first experienced a level of speculative activity during the pandemic, the mix of inflation and the war in Ukraine has led to risk being taken off the table and price compressions in the sorts of higher valuation, earlier stage businesses that the JGC team prefer. However, as the substantial widening of the trust's discount illustrates, there is an argument to be made that investors have been unduly harsh in selling off JGC shares.
Despite the current headwinds, the companies that JGC invests in seem only to be increasing in both their economic appeal and significance in our lives, as we seek new solutions to combat pollution and climate change. Indeed, according to FTSE Russell the combined market capitalisation of green economy companies rose from $2trn in 2009 to $7trn last year - a figure that is predicted to continue growing in the years ahead. We believe JGC's approach means it is well placed to take advantage of the growth potential which the sector offers.
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