Last checked at 
18 Jul 2023 11:50
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.
CLICK HERE TO READ THE FULL REPORT Visit Kepler Trust Intelligence for more high quality independent investment trust research.
Important information
This report has been issued by Kepler Partners LLP. The analyst who has prepared this report is aware that Kepler Partners LLP has a relationship with the company covered in this report and/or a conflict of interest which may impair the objectivity of the research.
Past performance is not a reliable indicator of future results. The value of investments can fall as well as rise and you may get back less than you invested when you decide to sell your investments. It is strongly recommended that if you are a private investor independent financial advice should be taken before making any investment or financial decision.
Kepler Partners is not authorised to make recommendations to retail clients. This report has been issued by Kepler Partners LLP, is based on factual information only, is solely for information purposes only and any views contained in it must not be construed as investment or tax advice or a recommendation to buy, sell or take any action in relation to any investment.
The information provided on this website is not intended for distribution to, or use by, any person or entity in any jurisdiction or country where such distribution or use would be contrary to law or regulation or which would subject Kepler Partners LLP to any registration requirement within such jurisdiction or country. In particular, this website is exclusively for non-US Persons. Persons who access this information are required to inform themselves and to comply with any such restrictions.
The information contained in this website is not intended to constitute, and should not be construed as, investment advice. No representation or warranty, express or implied, is given by any person as to the accuracy or completeness of the information and no responsibility or liability is accepted for the accuracy or sufficiency of any of the information, for any errors, omissions or misstatements, negligent or otherwise. Any views and opinions, whilst given in good faith, are subject to change without notice.
This is not an official confirmation of terms and is not a recommendation, offer or solicitation to buy or sell or take any action in relation to any investment mentioned herein. Any prices or quotations contained herein are indicative only.
Kepler Partners LLP (including its partners, employees and representatives) or a connected person may have positions in or options on the securities detailed in this report, and may buy, sell or offer to purchase or sell such securities from time to time, but will at all times be subject to restrictions imposed by the firm's internal rules. A copy of the firm's Conflict of Interest policy is available on request.
PLEASE SEE ALSO OUR TERMS AND CONDITIONS
Kepler Partners LLP is authorised and regulated by the Financial Conduct Authority (FRN 480590), registered in England and Wales at 70 Conduit Street, London W1S 2GF with registered number OC334771.