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

Jupiter Green Investment Trust

29/07/2024 17:03

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RNS Number : 2732Y  Jupiter Green Investment Trust Plc  29 July 2024

Jupiter Green (JGC)

29/07/2024

Results analysis from Kepler Trust Intelligence

In the year to 31/03/2024, Jupiter Green (JGC) delivered positive NAV total
returns of 1.9%. This compares to a 11.5% rise in the trust's benchmark, the
MSCI World Small Cap Index. Share price total returns were -19.1%.

Whilst returns over the full year were challenging, the performance in the
second half was much stronger, with JGC returning 12.1% in NAV terms from
01/10/2023, broadly in line with the benchmark.

The trust's discount significantly widened from 13.4% to 31.3% over the year.
This has subsequently narrowed to around 25% since the period end. The board
continues to monitor the discount and repurchased 2,031,011 shares over the
period at an average discount of 16.9% to NAV.

JGC Chair Michael Naylor said: "As attitudes toward addressing climate
solutions shift, there is a broadening of the value chain beyond the
conventional lens. The opportunities throughout the market that this creates
will be plentiful and we firmly believe the Jupiter Green Investment Trust
remains well-positioned to identify them."

The Board also announced that it is currently evaluating options for the
future of the trust, given its size and the challenging macroeconomic
environment. The Chairman noted that it may not be in the best interests of
shareholders for the trust to continue in its present form and that further
announcements would follow.

Kepler View

Jupiter Green (JGC) has a wide-ranging remit to invest in companies providing
innovative solutions to some of the most pressing environmental challenges
facing the world. The trust offers a well-diversified portfolio across six key
themes, with a preference towards small and mid-cap firms due to their growth
potential.

The macroeconomic and geopolitical backdrop has undoubtedly created a drag on
performance in the period, with clean energy companies in particular coming
under pressure from the sharp rise in interest rates. However, strong
performance from other themes demonstrated the benefits of taking a broad
approach to the environmental solutions sector.

However, one of the downsides of a diversified portfolio is underperforming
sectors creating a drag on returns and this has been the case for JGC in the
last financial year. In line with the broader sector, clean energy has
struggled in the face of higher interest rates, rising costs and supply chain
issues. As a result, the trust's NAV return of 2% is significantly below the
11% return for its benchmark, the MSCI World Small Cap Index, for the
financial year.

The trust's share price total return of -19% for the financial year has led to
a widening in the discount to more than 30%, although this has since narrowed
to around 25% (as at 25/07/2024). The board has been active in trying to
narrow this discount through share buybacks.

It's worth noting that JGC traded at a premium as recently as 2021 on the back
of high investor appetite for the sector but current sentiment is weighing
heavily against smaller trusts in light of higher interest rates. Given that
the board has announced a review, the discount may start to narrow. In the
meantime, the forecast cuts to base rates, in addition to the strong secular
growth drivers for the sector, could provide a more conducive environment for
JGC going forward.

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