RCS - Jupiter Green InvTst - Results analysis from Kepler Trust Intelligence

Jupiter Green Investment Trust

18/07/2023 11:50

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RNS Number : 3992G  Jupiter Green Investment Trust Plc  18 July 2023

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.

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