Fund Research

Jupiter European Opportunities

Last update 22 February 2019

Jupiter European Opportunities is a client of Kepler Trust Intelligence. Material produced by Kepler Trust Intelligence should be considered as factual information only and not an indication as to the desirability or appropriateness of investing in the security discussed.

Please see the important information by following this link or at the bottom of the page.

Investment objective

To achieve long-term capital growth from invest in securities of European companies and geographical sectors or areas which offer good prospects for capital growth.

As at:

21-02-19

Group/Investment

Jupiter European Opportunities

Ticker

JEO

Management Company

Jupiter Asset Management Limited

Manager Name

Alexander Darwall

Association of Investment Companies (AIC) Sector

Europe

12 Mo Yield

0.9%

Dividend Distribution Frequency

Annually

Latest Market Capitalisation

£803,138,357

Latest Net Gearing (Cum Fair)

8%

Latest Ongoing Charge Ex Perf Fee %

0.90

Turnover Ratio %

16.6

Shares Outstanding

112,800,331

(Discount)/ Premium % (Cum Fair)

-4.7

Daily Closing Price

712p


Jupiter European Opportunities (JEO) typifies a fund run by an investor who takes a long-term view, and applies that view with high conviction. As a result of Alexander Darwall’s stockpicking, JEO has reigned supreme for the past decade in both consistency and the extent of its outperformance – even despite the recent falls in the share price of the trust’s largest holding Wirecard.

Since 2000, Alexander has invested JEO’s capital in the same manner – by owning what he sees as exceptional companies, expected to grow thanks to long-term structural trends largely uncorrelated to the wider economic environment / stock market cycles. He expects to hold these companies for the long term, and has demonstrated that he runs winners. His low turnover and high conviction approach mean that currently there are four holdings within the portfolio (currently accounting for 24% of NAV by value) which have been part of the portfolio for twelve years.

Alexander has a high degree of flexibility to manage the portfolio as he sees fit. That he runs winners means that the portfolio concentration is much greater than one would normally find, with the top ten holdings representing 78% of NAV at the last month end. Additionally, he has full latitude to invest outside of European-listed companies, the requirement only being that most companies held will undertake a substantial proportion of their business activities within Europe. Currently c. 26% of assets are invested in UK-listed companies. By the managers’ calculations less than half (45%) of the portfolio’s companies’ sales come from Europe.

The results of Alexander’s stock-picking and his high conviction approach can be seen unambiguously in the performance numbers. Despite recent travails with Wirecard - the trust’s largest holding as at 31st January 2019 - on a total return basis, JEO remains amongst the best performers in the European peer group in NAV terms over one, three, five and ten years.

Since 2001 (the first full year of being manager) Alexander has only underperformed the benchmark (FTSE World Europe Ex-UK Index) in two years – 2008 and 2016. The compounding effect of Alexander’s outperformance has meant that the trust has delivered stellar results for shareholders. Over the last ten years (to 13th February 2019) the trust has delivered NAV total returns of 543% against a benchmark return of 160%, and the Morningstar Europe investment trust peer group average return of 212%.

Relative to peers, according to Morningstar’s “style” analysis, JEO has the purest “growth” portfolio of the investment trust peer group. It is also the only trust which has any significant exposure to UK stocks, and whilst over the long run the NAV has similar volatility to that of its peers, over the past one and three years it has been the most volatile.

Gearing has over the long term averaged around 10%, according to the Morningstar. The manager tends to deploy gearing when he sees opportunities at a stock level. During the summer of 2018, gearing reached a relatively low level (by historic standards) of 3%. Following the sell-off from September 2018 into the year end, gearing was increased to its current level of c 6%.

JEO has consistently traded at a premium rating relative to the rest of the Europe investment trust peer group, and for much of the past year traded on a premium in absolute terms. The recent volatility in NAV – largely thanks to Wirecard - has meant that the discount has once again widened out to 5%.

William Heathcoat Amory

Important information

Jupiter European Opportunities is a client of Kepler Trust Intelligence. Material produced by Kepler Trust Intelligence should be considered as factual information only and not an indication as to the desirability or appropriateness of investing in the security discussed.

Please see the important information by following this link or at the bottom of the page.

Kepler Trust Intelligence is a website owned and managed by Kepler Partners LLP. Material produced by Kepler Trust Intelligence should be considered a marketing communication, and is not independent research.

This report has been issued by Kepler Partners LLP for communication only to eligible counterparties and professional clients as defined by the Financial Conduct Authority.  Its contents are not directed at, are not to be communicated to, may not be suitable for and must not be relied on by retail clients

The information provided on this website is not intended for distribution to, or use by, any person or entity in any jurisdiction or country where such distribution or use would be contrary to law or regulation or which would subject Kepler Partners LLP to any registration requirement within such jurisdiction or country.  Persons who access this information are required to inform themselves and to comply with any such restrictions. 

The information contained herein has not been prepared in accordance with legal requirements designed to promote the independence of investment research. The information contained in this website is not intended to constitute, and should not be construed as, investment advice. No representation or warranty, express or implied, is given by any person as to the accuracy or completeness of the information and no responsibility or liability is accepted for the accuracy or sufficiency of any of the information, for any errors, omissions or misstatements, negligent or otherwise. Any views and opinions, whilst given in good faith, are subject to change without notice.

This is not an official confirmation of terms and is not a recommendation, offer or solicitation to buy or sell or take any action in relation to any investment mentioned herein. Any prices or quotations contained herein are indicative only.  

Kepler Partners LLP (including its partners, employees and representatives) or a connected person may have positions in or options on the securities detailed in this report, and may buy, sell or offer to purchase or sell such securities from time to time, but will at all times be subject to restrictions imposed by the firm’s internal rules. 

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Fund History: Jupiter European Opportunities

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