Fund Profile

Disclaimer

Disclosure – Non-Independent Marketing Communication

This is a non-independent marketing communication commissioned by Jupiter Green. The report has not been prepared in accordance with legal requirements designed to promote the independence of investment research and is not subject to any prohibition on the dealing ahead of the dissemination of investment research.

Overview
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Overview

Jupiter Green (JGC) has had a well-timed shift of its investment focus, targeting smaller and more innovative companies (Portfolio). The new lead manager, Jon Wallace, has been working on the trust since 2014, which has ensured a smooth transition. The change in emphasis on the size and growth prospects of the underlying companies has already brought results in terms of strong absolute performance since September 2020, and (as discussed in Discount) a premium rating has been established, allowing JGC to issue shares and start to grow.

Since the change in strategy was adopted, share prices for many companies in Jon’s stock universe have moved higher. The team’s long expertise and experience in the sector, not to mention the ability to be nimble given the size of the trust, has led them to try to find less expensive ideas ‘off the beaten path’.

With many of these ideas, JGC can take advantage of its relatively small size (net assets of £54m) to invest in companies below the radar of most investors. When compared to other trusts offering exposure to sustainable themes, JGC has a significantly higher exposure to small and micro-cap companies (as defined by Morningstar), with a current median market cap of just over £4bn. The managers anticipate taking advantage of JGC’s permission to invest up to 5% in unlisted companies, further differentiating the trust from peers.

Jon is enthusiastic on the long-term secular tailwinds behind the strategy. COP26 in Glasgow will be a big focal point for governments and regulators around the world, and the UK’s recent announcement of increased environmental commitment may see the rest of the world continue to raise theirs.

Analyst's View

JGC invests across seven sustainable themes, including the circular economy, clean energy, water and sustainable agriculture, nutrition and health. Demand has been strong for funds and trusts exposed to these themes, but Jon and his team at Jupiter have long experience in the space which they believe will enable them to invest profitably in areas of the market with strong growth potential.

The investment focus moving towards smaller, more innovative companies provides a clear differentiator to many other sustainably themed funds. As we highlight in management, the team believe that the size of the trust allows them to invest nimbly, which allows them to consider significantly smaller companies than peers.

In terms of Performance, it is early days yet. Despite a strong Q4 in 2020, JGC has not been immune to the rotation into value stocks experienced by the broader market. That said, Jon believes many of his companies have proved more resilient than one might have expected.

JGC has traded on an average discount of c. 5% over the past five years, but latterly this has been superseded by a premium rating to NAV. Subsequent share issuance has thus allowed the trust to grow, reflective in our view of the differentiated investment that JGC now represents. In our view, it will appeal to all sorts of investors, providing an exposure to more dynamic, innovative and high-growth companies driving the transformation of the global economy to a more sustainable footing.

Bull
Bear
Differentiated investment proposition, makes JGC unique amongst funds and trusts offering a sustainable theme
Smaller and more innovative companies tend to be higher-risk propositions than ‘established leaders’
Long track record and experience of management team
Gearing will exacerbate the downside (as well as enhance the upside)
Share issuance means liquidity and OCF should continue to improve
Premium could give way to a discount
Continue to Portfolio

Fund History

18 May 2022 Energy shock: looking at both sides of the coin
Jon Wallace and Noelle Guo say the energy shock faced by consumers now is reminiscent of the 1970s, which may boost usage of existing energy efficient technologies and spawn new ones...
30 Mar 2022 You say tomato…
Do it yourself or put it into a global fund and leave it to the experts - our analyst debate the merits of each approach...
17 Dec 2021 Results analysis: Jupiter Green
JGC has experienced some short-term NAV volatility, but the long-term attractions remain…
08 Dec 2021 Fund Analysis
JGC provides diversified exposure to exciting companies leading the charge to a more sustainable future…
24 Nov 2021 Holding back the tears
While the final text of COP26 fell short of what many had hoped for, the writing is on the wall for fossil fuels and, from an investment perspective, the age of sustainability has only just begun…
10 Nov 2021 A fair wind
As the world grapples with the challenge of climate change, we examine a fund which aims to generate growth for its shareholders via companies which can deliver a cleaner future…
27 Oct 2021 Gone with the wind
One of our analysts looks at the implications of the shocking rise in energy prices and the opportunities it highlights for investment trusts...
15 Sep 2021 Bargains galore
We review our discounted opportunities portfolio, with one constituent rallying more than 30% in just two months…
14 Jul 2021 Building back greener
As governments turn their focus towards the COVID-19 economic recovery, they are increasingly incorporating sustainability goals into their efforts. For sustainable investors, this presents a clear opportunity…
10 Jun 2021 Green is good!
2021 will see billions dedicated to sustainable initiatives, which brings with it a host of possible investment opportunities...
19 May 2021 Fund Analysis
JGC’s focus on mid/small caps seems to have been well-timed, and is now regularly issuing shares…
23 Apr 2021 Reuse, recycle and rethink sustainability
Over the last three years, sustainability has gone from being something of an investment trend to an imperative for many investors...
10 Mar 2021 A true original
ESG has become a buzzword in recent years but Jupiter Green, which has forged a successful track record in socially responsible investing since launch in 2006, was into it before it was ‘cool’…
10 Mar 2021 Spring Conference '21
Audio and presentations from 21 of the UK’s leading investment trust managers…
04 Mar 2021 Slides and Audio: Jupiter Green
Download the presentation and listen to the audio from our 'Ideas for your ISA' Spring Conference on 03 March...
24 Feb 2021 Dire Straits or Money for Nothing?
As discounts reach historically narrow levels across the board – our analysts debate whether a premium is a price worth paying…
04 Feb 2021 Eurovision 2021
We highlight potential opportunities within the European investment trust space…
29 Jan 2021 Flash update: Jupiter Green
Jon Wallace is promoted to lead manager…
16 Dec 2020 My haven’t you grown!
How sustainability has gone from zero to hero in 2020…
15 Dec 2020 Results analysis: Jupiter Green
The team behind the newly revamped Jupiter Green believe the COVID crisis has sharpened the focus on sustainability, creating a multi-decade opportunity for companies in the portfolio…
04 Dec 2020 Slides and Audio: Jupiter Green
Our research team at Kepler Trust Intelligence hosted a 30 minute webinar update with Charlie Thomas, Head of Strategy, Environment & Sustainability at Jupiter Asset Management...
10 Nov 2020 Fund Analysis
JGC is now focussing on mid & small caps, which we see as a positive for its prospects…
View all

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