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) is evolving, now with a significantly greater exposure to smaller and more innovative companies. Larger ‘established leaders’ will remain a proportion of the portfolio, but at a reduced weighting than historically.

This move anticipates COVID-19 global economic stimulus measures promising to “build back better”. The board and manager believe we will see a significant acceleration of themes the manager is already exposed to. However, they stands to benefit most those mid- and small-cap companies providing new solutions to environmental problems. This is a prime driver behind the increased exposure to these sorts of companies. JGC will also likely start to take advantage of its permission to invest up to 5% in unlisted companies, further differentiating the trust from peers.

These changes have already started to be implemented (the weighted average market capitalisation has fallen from £13.5bn to £8bn), and will materially alter JGC’s characteristics. Risk (in terms of volatility) will go up and the managers hope that a rewards will also increase. The income available to be distributed will go down, and the trust expects to employ gearing on a continuous basis (albeit not employed currently). Reflecting the change, the benchmark is now the MSCI World Small Cap Index.

JGC invests across seven sustainable themes in its portfolio, including clean energy; water and sustainable agriculture, nutrition and health. With the sustainable investments team at Jupiter at the helm, stock picking will remain the key driver for returns.

JGC has traded on an average discount of c. 5% over the past five years, and currently trades at a discount of 1%. This compares to the trust’s most similar peer, Impax Environmental Markets, which trades on a premium of 7%.

Analyst's View

The change of emphasis in the portfolio could signify a decisive change in the fortunes of JGC. By moving away from an overall ‘core’ style, the trust is arguably more relevant to investors of all types looking for exposure to more dynamic, innovative and high-growth companies which are driving the transformation of the global economy to a more sustainable footing. The portfolio is now very different to what one might find in a typical global fund.

With the specialist and mid/small cap focus, JGC now likely complements most global portfolios. Perhaps as a result of being overshadowed by its bigger open-ended sister Jupiter Ecology Fund, JGC is small and has not featured highly on investors’ radars. JGC’s discount has been persistent, although at times it has traded at a premium: the trust issued shares at a premium as recently as January 2020.

With raised awareness that the threat of climate change is offering significant opportunities for businesses, we share the board’s view that these changes should put JGC’s shares in demand. Alongside growth-focussed investors who appreciate the innovative small caps in the portfolio, JGC will also likely appeal to ESG investors and investors who want to participate in supporting solutions for the world’s environmental challenges. In terms of performance, it is early days yet. However, if the new approach is successful, then we think it fair to assume that the valuation gap between JGC (at a discount of 1%) and Impax Environmental Markets (at a premium of 7%) will narrow over the medium term.

bull bear
Investment proposition getting more interesting as a result of changes Smaller and more innovative companies are higher-risk propositions than 'established leaders'
Long track record and experience of manager Gearing will exacerbate the downside (as well as enhance the upside)
Discount to NAV could narrow Dividend is unlikely to remain at current levels
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…
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