Jupiter European Opportunities powers on to higher returns - annual report summary
Our annual report summary series delivers a condensed analysis of a selected investment trust's annual report, including details of the trust's aim, investment style, portfolio focuses, gearing policy, charges and performance.
JUPITER EUROPEAN OPPORTUNITIES
Jupiter European Opportunities (JEO) invests in pan-European equities for long-term capital growth. Its report and accounts for the year to 31 May 2016 shows shareholders' assets up from £558 to £613 million, helped by the issue of 9.3 million new shares at premiums of up to 9 per cent.
Alexander Darwall has been lead manager since JEO's November 2000 launch, and has a multi-million pound shareholding.
He and his team use intensive in-house research to identify world-leading companies that are able to exploit structural growth trends, notably 'special companies' capitalising on change and disruption rather than being damaged by it.
They look for business models which should achieve attractive returns across the business cycle and deliver long-term growth in cash flow. JEO's portfolio is concentrated into 40 holdings.
The top 10 account for over 60 per cent of assets and are headed by Provident Financial (one of eight UK holdings), Novo Nordisk (one of five Danish holdings), and Syngenta (one of three Swiss holdings).
Turnover during the year remained modest at 14 per cent. Gearing rose from an exceptionally low 3 per cent to 14 per cent, reflecting the manager's confidence in specific opportunities, and its average cost remained 1.1 per cent.
Ongoing charges fell to 1.08 per cent due to a lower performance fee.
NAV total returns per share edged up 0.8 per cent, despite a 3.7 per cent fall in JEO's benchmark, the FTSE World Europe ex UK index. With its shares moving to a small discount, their price fell 3.8 per cent to 530p. Dividends, which are a residual consideration, totalled 5.5p.
JEO's net asset value (NAV) has grown faster than its benchmark in 12 of the past 16 years and its NAV total returns to end May were much the best in its peer group over three and five years.
JEO can engage in share buybacks and holds a continuation vote every third year.
See the full annual report on the Jupiter website.