Jupiter Green Investment Trust PLC : Interim Ma...
Jupiter Green Investment Trust PLC
Interim Management Statement for the three months to 30 June 2012
The Board of Jupiter Green Investment Trust PLC (the "Company") is pleased to announce its interim management statement for the three months ended 30 June 2012.
Investment Manager's Report
Performance Review
For the three months ended 30 June 2012 the total return for the Company was -5.9 per cent.* compared to a return of -5.0 per cent.* for the Company's benchmark index, the MSCI World Small Cap Index**. During the same period, the FTSE ET50 Index returned -8.1 per. cent..**
Market and Fund Review
The second quarter of 2012 was turbulent for global equities. The anti-austerity mood gathered momentum in Europe and investors feared the imminent exit of Greece from monetary union following its elections. Spain's banking sector, meanwhile, required a bailout, which led to further market uncertainty. Share prices suffered heavy losses in April and May before recovering somewhat in June when the Greek re-election yielded a somewhat more eurozone-friendly result. News that Spain's banks were to be recapitalised directly from eurozone bailout funds (i.e. with no additional burden on Spain's sovereign balance sheet) also provided a boost. Economic data from the US and China showed a loss of momentum in both economies during the period.
Fund performance
The Company modestly underperformed its benchmark during the quarter. Many sectors not held in the portfolio (such as consumer staples and telecoms) outperformed the broader market, while industrial stocks suffered due to concerns about a slowdown in global manufacturing. The Company continued to beat the FTSE ET50 index, however.
Consumer staples holding Whole Foods Market bucked the downward trend. The company benefited from good results and a brighter employment outlook for its key demographic (college graduates over 25 years of age). Meanwhile, LKQ Corp added value following a strong Q1 trading update. Although not immune to a potential slowdown in the global economy, the company is being supported by strong secular growth in the recycled parts market, which now accounts for about 37 per cent. of the broader auto parts market in the US
Scrap metal company Schnitzer Steel was de-rated on concern about a slowdown in global growth and weaker commodity demand from China. Wind power business EDP Renovaveis ended lower on the back of eurozone concerns and Spanish power sector reforms, and now appears to be trading below fair value. Tough macro conditions were negative for Suez Environment which announced a profit warning late in the period. The management team is reacting proactively by cutting costs and the company's valuation reflects near-term pressures. Shanks's CFO left the company and said that markets were likely to remain challenging. However, there appeared to be no change to fundamentals or the company's investment programme.
We took advantage of price weakness to establish a holding in Watts Water Technologies, a high quality US water technology company.
Investment Outlook
While the eurozone appears to be taking tentative steps towards greater fiscal integration, economic weakness in Italy and Spain continues to be a significant concern. Nevertheless, we believe that expectations in some of our investment areas are reaching pessimistic levels and there may be the opportunity to make some prudent additions to the portfolio in the coming weeks and months. The June UN Conference on Sustainable Development in Rio de Janeiro (Rio + 20) ended largely as expected: there was little meaningful progress at the government level. A number of trends were underscored at the talks, however, which continue to shape the growth in the environmental economy. The two most notable of these were the increased influence of the corporate sector in driving the environmental agenda and the broad recognition that a higher economic value should be given to environmental assets (such as water and biodiversity) in the wider global growth agenda. It is also interesting to note that the Confederation of British Industry (CBI), a UK-based business lobby group, has recently suggested that about a third of the growth in the UK economy in 2011/12 came from the green sector and that with the right policy framework this sector could contribute as much as £20 billion to the domestic economy by 2015. These projections add weight to our view that environmental issues are increasingly becoming embedded in mainstream economic activity, underpinning the long term growth opportunity of green investment.
Charles Thomas
Jupiter Asset Management Limited
Investment Manager
3 August 2012
Total Assets as at 30 June 2012: £33,136,718
Shares in Issue
Shares bought back in the period 758,375
Share in issue as at 30 June 2012 35,855,025
Shares held in Treasury at 30 June 2012 3,264,834
Total Voting Rights as at 30 June 2012 32,590,191
| Net Asset Value (p) | Market Price (p) | Premium/ (Discount) | |
| Ordinary (undiluted) excluding income/expenses | 101.68 | 93.00 | (9%) |
| Ordinary (undiluted) including income/expenses | 101.92 |
Portfolio Distribution on 30 June 2012
| United Kingdom | 26% |
| North America | 39% |
| Europe | 16% |
| Japan | 10% |
| Other | 4% |
| Cash and fixed interest | 5% |
| 100% |
The Company's exposure to other UK listed investment companies was nil on 30 June 2012.
Top Ten Holdings on 30 June 2012
| Company | Country of Listing | Activity | % of total assets |
| Cranswick | United Kingdom | 4.2 | |
| Wabtec | United States | 3.9 | |
| Novozymes | Denmark | 3.5 | |
| Whole Foods Market | United States | 3.1 | |
| Johnson Matthey | United Kingdom | 3.0 | |
| Stantec | Canada | 2.5 | |
| Atkins | United Kingdom | 2.4 | |
| Tomra Systems | Norway | 2.4 | |
| Horsehead Holdings | United Sates | 2.4 | |
| Valmont Industries | United States | 2.3 | |
| 29.7 |
Comparative Performance to 30 June 2012
| Three months % | One year % | Since launch % | |
| Total Assets* | (5.9) | (13.9) | 4.7 |
| MSCI World Small Cap Index (total return) | (5.0) | (7.8) | 25.8 |
| Ordinary Share NAV | (5.9) | (13.9) | 4.7 |
| Ordinary Share Price | 1.1 | (6.5) | (7.0) |
* Performance adjusted for share issue/cancellation since launch
Material Events
During the period the Annual Report was published. The Annual General Meeting will be held on 14 September 2012.
On 20 June 2012 an interim dividend of 0.60p (net) per Ordinary share was declared, payable on 27 July 2012 to shareholders on the register as at 29 June 2012.
At a General Meeting of shareholders on 20 June 2012 resolutions were approved altering the Articles of Association to provide for subscription rights to be embedded within the Ordinary shares. In addition a revised discount control policy was ratified and the share buyback authority renewed. Shareholders have an annual opportunity to subscribe for Ordinary shares on the basis of one new Ordinary share for every ten Ordinary shares held at 31 March of each year. The subscription price will be equal to the audited undiluted NAV per share as shown in the published report and accounts prepared at 31 March in the previous year. The first subscription date will be 31 March 2013.
There were no other material events or transactions that have impacted on the financial position of the Company during the period.
The Company's Investment Objective
The Company's investment objective is to generate long-term capital growth through a diverse portfolio of companies providing environmental solutions.
The Company's Investment Policy
Asset Allocation
The Company invests globally in companies which have a significant focus on environmental solutions. Specifically, the Company looks to invest across three key areas: infrastructure, resource efficiency and demographics.
The Company's portfolio has a bias towards small and medium capitalisation companies. It invests primarily in securities which are quoted, listed or traded on a recognised exchange. However, up to 5 per cent. of the Company's Total Assets (at the time of such investment)
may be invested in unlisted securities.
The individual portfolio manager selects each stock on its individual merits as an investment rather than replicating the relevant company's weighting within the Company's benchmark indices. The Company's investment portfolio is therefore unlikely to represent the constituents of its benchmark indices, but instead is intended to offer a well-diversified investment strategy focused on maximising returns from the prevailing economic background.
The individual portfolio manager may enter into contracts for differences in order to gain both long and short exposure for the Company to indices, sectors, baskets or individual securities for both investment purposes and for hedging or efficient portfolio management purposes. The ability to maintain a portfolio of both long and short positions provides the flexibility to hedge against periods of falling markets, to reduce the risk of absolute loss at portfolio level and to reduce the volatility of portfolio returns. The portfolio manager may also invest in single stock, sector and equity index futures and options.
Risk is also mitigated by investing mainly in quoted companies on registered exchanges,
ensuring full regulatory compliance for all underlying quoted investments. There are no specific stock and sector size limitations within the portfolio, but the manager is expected to provide sufficient stock, sector and geographic diversification to ensure an appropriate trade-off between risk and return within the portfolio. In order to ensure compliance with this objective there is a two tier monitoring system. Firstly, the manager's portfolio is assessed monthly by the Jupiter Asset Management Limited Performance Committee, which is headed by the Chief Executive of Jupiter Asset Management Limited. Secondly, the Board is provided with a detailed analysis of stock, sector and geographic exposures at the Trust's regular Board meetings.
Risk Diversification
The following investment restrictions are observed:
no more than 15 per cent. of the Total Assets of the Company (before deducting borrowed money) is lent to or invested in any one company or group (including loans to or shares in the Company's own subsidiaries) at the time the investment or loan is made. For this purpose any existing holding in the company or group concerned is aggregated with the proposed investment;
distributable income is principally derived from investments. Neither the Company nor any subsidiary conducts a trading activity which is significant in the context of the group as a whole;
not more than 10 per cent., in aggregate, of the value of the Total Assets of the Company (before deducting borrowed money) is invested in other investment companies (including investment trusts) listed on the Official List. Whilst the requirements of the UK Listing Authority permit the Company to invest up to this 10 per cent. limit, it is the Directors' current intention that the Company invests not more than 5 per cent., in aggregate, of the value of the Total Assets of the Company (before deducting borrowed money) in such other investment companies; and
the Company at all times invests and manages its assets in a way which is consistent with its object of spreading investment risk.
Gearing
The Company may utilise gearing, at the Directors' discretion, for the purpose of financing the Company's portfolio and enhancing Shareholders returns. In particular, the Company may be geared by bank borrowings which will rank in priority to the Ordinary Shares for repayment on a winding up or other return of capital.
The Articles provide that, without the sanction of the Company in general meeting, the Company may not incur borrowings above a limit of 25 per cent. of the Company's Total Assets at the time of drawdown of the relevant borrowings. No credit facility has been negotiated by the Company to date.
The level of any gearing of the Company's Total Assets from time to time will be disclosed in the monthly factsheets which are available from www.jupiteronline.co.uk and on request from the Company Secretary.
In accordance with the requirements of the UK Listing Authority, any material changes in the principal investment policies and restrictions (as set out above) of the Company will only be made with the approval of Shareholders by ordinary resolution.
Company Information
Year end: 31 March
Results: interim results to 30 September 2012 announced November 2012; final results to 31 March 2013, announced June/July 2013
Monthly fact sheets for the Company are available for download from www.jupiteronline.co.uk 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 under `Investment Companies'.
The Net Asset Values of the Company's Ordinary shares are calculated daily 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
Director of Investment Trusts
Jupiter Asset Management Limited
rpavry@jupiter-group.co.uk
020 7314 4822
Faith Pengelly
Company Secretarial Department
Jupiter Asset Management Limited
fpengelly@jupiter-group.co.uk
020 7314 4915
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.
By order of the Board
Jupiter Asset Management Limited
3 August 2012
The owner of this announcement warrants that:
(i) the releases contained herein are protected by copyright and other applicable laws; and
(ii) they are solely responsible for the content, accuracy and originality of the
information contained therein.
Source: Jupiter Green Investment Trust PLC via Thomson Reuters ONE
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