Interim Management Statement

RNS Number : 8101Q

Jupiter European Opps. Trust PLC

17 October 2013

 



Jupiter European Opportunities Trust PLC

Interim Management Statement for the three months ended 31 August 2013

The Board of Jupiter European Opportunities Trust PLC (the "Company") is pleased to announce its interim management statement for the quarter ended 31 August 2013. 

During the period from 1st June 2013 to 31st August 2013, the Company's net asset value per share excluding income and expenses rose by 0.88% to 407.13p, which compares with a drop of 1.3% for the Company's benchmark, the FTSE World Europe ex-UK Total Return Index, over the same period.

Investment Manager's Report for the Quarter Ended 31 August 2013

Global equity markets and, in particular, emerging markets experienced significant declines in June, following on from comments on 22nd May by the US Federal Reserve that it might reduce the size of its $85bn-a-month asset purchase scheme if it saw a sustained improvement in the labour market. The comments triggered a flight of speculative capital from Asia back to the dollar and put severe pressure on currencies such as the Indonesian rupiah and the Indian rupee.

Equities then rebounded in July. Having cut interest rates to 0.5% in May, Mario Draghi, President of the European Central Bank, joined the fleet of central bankers sailing into uncharted waters and attempted some light forward guidance: on US Independence Day he said the Bank expected to keep interest rates low for an "extended period". In August, most equity markets declined as investors continued to discount a likely reduction in the pace of quantitative easing in the US. Meanwhile, manufacturing picked up in Germany, Spain, Italy, Austria, Greece, Ireland, the Netherlands but not in France. Improving economic data saw global investors return to European equities, in particular cyclical sectors such as banks and telecoms where the portfolio is notably underweight.

Portfolio activity was modest. We added to existing positions in Coloplast, Ingenico and Reed Elsevier. We locked in some profits from Lectra, which continued to perform well, and took profits and exited from Luxottica. We cut our position in Aggreko where the trading outlook worsened. There were several new purchases during the period. Gemalto is a Dutch-based provider of software for ID / secure transactions with smart cards and other devices. The company is transforming itself from a telecoms business to a provider of less-cyclical, higher-margin services. CGG (Géophysique) provides leading geological, geophysical and reservoir capabilities to the global oil and gas industry. It has improved the utilisation rates of its survey vessels following acquisition of a survey fleet from Fugro. Inmarsat is a unique global satellite-based telecoms operator with significant spectrum-assets. It is a dominant operator in many markets and benefits from high levels of global geopolitical instability.

Alexander Darwall

Fund Manager, Jupiter Asset Management Limited

Total Assets as at 31 August 2013: £355,099,742

Shares in Issue on 31 August 2013: 87,219,523

	Net Asset Value per share excluding income/expenses(p)	Net Asset Value per share including income/expenses (p)	Market Price (p)	Premium
Ordinary Shares*	407.13	404.82	416.00	2.2%

Portfolio Distribution on 31 August 2013 Percentage of Total Assets plus short term loans/overdraft

Country of Listing	%
United Kingdom	33
Germany	19
Denmark	16
The Netherlands	12
France	12
Switzerland	10
Norway	5
Others	6
Cash and fixed interest	(13)
	100

The Company's exposure to other UK listed investment companies was nil on 31 August 2013.

Top Ten Holdings on 31 August 2013

Company	Country of Listing	Percentage of Portfolio
Wirecard	Germany	6.5
Experian	United Kingdom	6.4
Novo-Nordisk	Denmark	6.2
Provident Financial	United Kingdom	6.1
Elsevier	The Netherlands	6.0
Syngenta	Switzerland	6.0
Novozymes	Denmark	5.6
Croda International	United Kingdom	5.3
Intertek Group	United Kingdom	5.1
Fresenius SE	Germany	4.2
		____
		57.4

Comparative Performance to 31 August 2013

	1 Month %	3 Months %	1 Year %	3 Years %	5 Years %	Since Launch %	Since Last Annual Report %
Total Assets*	(2.9)	0.9	24.9	69.0	94.8	274.8	0.9
FTSE World Europe Ex-UK Index	(3.7)	(1.3)	26.3	32.4	24.5	71.1	(1.3)
FTSE World Europe Inc-UK Index	(3.3)	(1.3)	23.2	34.1	28.8	68.8	(1.3)
Ordinary Share NAV	(2.9)	0.9	24.9	69.0	94.8	330.1	0.9
Ordinary Share Price	(2.0)	1.5	36.8	93.0	123.7	309.9	1.5

*Adjusted for changes to share capital and amounts borrowed.

OBJECTIVE OF THE COMPANY

The objective of the Company is to invest in securities of European companies and in sectors or geographical areas which are considered by the Investment Manager to offer good prospects for capital growth, taking into account economic trends and business development.

INVESTMENT POLICY

The Investment Manager adopts a stock picking approach in the belief that a thorough analysis and understanding of a company is the best way to identify long-term superior growth prospects. This understanding begins with identifying those companies where the ownership structure and incumbent management are conducive to the realisation of the aim of achieving superior long-term earnings growth. The Investment Manager will seek to identify companies which enjoy certain key business characteristics including some or all of the following:

- a strong management record and team, and the confidence that the Investment Manager has in that management's ability to explain and account for its actions;

- proprietary technology and other factors which indicate a sustainable competitive advantage;

- a reasonable expectation that demand for companies' products or services will enjoy long-term growth; and

- an understanding that structural changes are likely to benefit rather than negatively impact that company's prospects.

There may be sectors which do not enjoy the business characteristics described above and in such circumstances the Investment Manager will seek to identify companies that are expected to generate superior earnings growth within that sector.

In analysing potential investments, the Investment Manager will employ differing valuation techniques depending on their relevance to the business characteristics of a particular company. However, the underlying feature will be the sustainability and growth of free cash-flow in the long-term.

RISK MANAGEMENT AND INVESTMENT RESTRICTIONS

Portfolio risk is mitigated by investing in a diversified spread of investments. The Investment Manager is not constrained by sector, geographical location within Europe or market capitalisation or size of investee companies.

No single holding shall constitute more than 10% of the Company's total assets at the time of investment.

The Company may invest up to 7.5% of the Company's total assets at the time of such investment in unlisted securities.

The Company may utilise derivative instruments including index-linked notes, contracts for differences, covered options and other equity-related derivative instruments for efficient portfolio management, gearing and investment purposes. Any use of derivatives for investment purposes will be made on the basis of the same principles of risk spreading and diversification that apply to the Company's direct investments, as described above, with a limit on the mark to market valuation of such positions of 10% of the Company's total assets at the time of investment. The Company will not enter into uncovered short positions.

The Company will not invest more than 10% of its gross assets, at the time of investment, in other listed closed-ended investment funds, whether managed by the Investment Manager or not, except that this restriction shall not apply to investments in listed closed-ended investment funds which themselves have stated investment policies to invest no more than 15% of their gross assets in other listed closed-ended investment funds. In addition to this restriction, the Directors have further determined that no more than 15% of the Company's gross assets will, at the time of acquisition, be invested in other listed closed-ended investment funds (including investment trusts) notwithstanding whether or not such funds have stated policies to invest no more than 15% of their gross assets in other listed closed ended investment funds.

No material change will be made to the investment policy without the approval of Shareholders by ordinary resolution.

Material Events

During the period under review the Company issued 2,775,000 Ordinary shares in the Company representing 3.3% of the issued share capital.

The Company published a prospectus on 10 October in connection with a Placing Programme.  A copy of the prospectus, which sets out further details of the programme, may be downloaded from www.jupiteronline.com.

Availability of Monthly Fact Sheets

Monthly fact sheets for the Company are available for download from www.jupiteronline.com and by post or fax on request from the company secretarial department.

The Company's Ordinary shares are listed on the London Stock Exchange and the prices are published in the Financial Times and The Times under `Investment Companies'.

The Net Asset Values of the Company's ordinary shares are calculated weekly and can be viewed on the London Stock Exchange website at www.londonstockexchange.com (under the heading 'Market News').

For further information, please contact:

Richard Pavry

Head of Investment Trusts

Jupiter Asset Management Limited

[e-mail]  

020 7314 4822

17 October 2013

The Company's Registered office is at 1 Grosvenor Place, London SW1X 7JJ.

This interim management statement has been prepared solely to provide information to meet the requirements of the UK Listing Authority's Disclosure and Transparency Rules.

 

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