Interim Management Statement

RNS Number : 5243U

Jupiter European Opps. Trust PLC

16 October 2014

 



Jupiter European Opportunities Trust PLC

Interim Management Statement for the three months ended 31 August 2014

The Board of Jupiter European Opportunities Trust PLC (the "Company") is pleased to announce its interim management statement for the three months ended 31 August 2014. 

During the period from 1 June 2014 to 31 August 2014, the Company's net asset value per share excluding income and expenses declined 2.8% to 438.59p, which compares with a drop of 3.9% for the Company's benchmark, the FTSE World Europe ex-UK Total Return Index, over the same period. The Company's ordinary share price declined 7.0% during the three month period.

Investment Manager's Report for the three months ended 31 August 2014

The benchmark's decline of 3.9% in sterling terms during the period under review reflected broad based declines across Eurozone equity markets. Over the course of the three months, concerns grew over the bloc's slowing rate of economic recovery and a build-up of deflationary pressures. The International Monetary Fund's most recent assessment sees 2014 growth in the European Union and Eurozone pared back to 1.4% and 0.8%, respectively. The European Central Bank responded to the threat with a renewed commitment to 'cheap money', cutting benchmark interest rates to 0.15%, introducing a negative deposit rate and preparing for purchases of asset backed securities. In contrast to Eurozone indices, stock markets in the UK, US, Asia, India and Latin America all rose in sterling terms and the FTSE World Index climbed 3.9% over the period. Disappointing macroeconomic data in the Eurozone also resulted in the euro depreciating sharply against other currencies, most notably against the US dollar.

Your Company's performance is best explained with reference to individual companies. Novo Nordisk, your Company's single largest holding, was the portfolio's strongest performer. The world-leading provider of diabetes treatment reported solid results as well as shortened timeframes for the cardiovascular trials in the US relating to a new long-acting insulin drug. The second best performer was Reed Elsevier, the global provider of educational tools for professional customers. The company is a net beneficiary from a shift to digital and once again delivered underlying revenue and adjusted operating growth. The next best performing stock was Leonteq, the supplier of white-label financial products to a number of banks. The strong performance of Leonteq and other 'alternative financial' names resulted in Financials being the best performing sector for your Company.

Wirecard and Amadeus detracted from performance during the period. In both cases, their share prices dipped on a perceived lack of catalysts for future growth. In our view, however, the long term investment case for both companies remains intact. We also sold our holding in Biotest, the producer of plasma-derived products, on evidence of a tougher pricing environment in Europe. We bought back into SGS, the testing and inspection business and backed Leonteq's fund-raising as it accelerates its growth plans.

Our aim is to identify a number of winning business models whose success rests to a large extent on their own abilities rather than on external factors. These companies tend to tap into changes in technology, consumer habits or regulation - structural trends that have little correlation with the macroeconomic environment. These companies exist and we remain confident of our ability to identify a number of potential long term winners.

Alexander Darwall

Fund Manager

Jupiter Asset Management Limited

Total Assets as at 31 August 2014: £397,913,598

Ordinary shares in issue as at 31 August 2014: 90,726,474

	Net Asset Value per share excluding income/expenses(p)	Net Asset Value per share including income/expenses(p)	Market Price (p)	Premium / (Discount)
Ordinary Shares*	438.59	439.75	428.00	(2)

Portfolio Distribution as at 31 August 2014

Percentage of Total Assets plus short term loans/overdraft

Country	%
United Kingdom	25
Germany	17
Denmark	17
The Netherlands	8
France	8
Switzerland	11
Norway	5
Others	9
Cash and fixed interest	0
	100

The Company's exposure to other UK listed investment companies was nil as at 31 August 2014.

Top Ten Holdings as at 31 August 2014

Company	Country of Listing	% of Portfolio
Novo Nordisk	Denmark	8.9
Provident Financial Wirecard	United Kingdom Germany	8.8 7.9
Syngenta	Switzerland	7.5
Reed Elsevier	The Netherlands	7.4
Novozymes	Denmark	7.0
Experian	United Kingdom	6.0
Fresenius SE	Germany	5.6
Intertek Group	United Kingdom	4.5
Johnson Matthey	United Kingdom	4.4
		68.0

Comparative Performance as at 31 August 2014

	1 Month %	3 Months %	1 Year %	3 Years %	5 Years %	Since Launch %	Since Last Annual Report %
Total Assets*	1.3	(2.8)	7.7	63.0	136.6	274.8	(2.8)
FTSE World Europe Ex-UK Index Total Return	2.1	(3.9)	10.4	41.5	45.9	89.0	(3.9)
FTSE World Europe Inc-UK Index Total Return	2.1	(2.5)	10.2	41.6	51.9	86.1	(2.5)
Ordinary Share NAV ( capital only)	1.3	(2.8)	7.7	63.0	136.6	363.3	(2.8)
Ordinary Share Total Return ( NAV & Dividend)	1.3	(2.8)	8.6	67.0	143.9	377.7	(2.0)
Ordinary Share Price	0.1	(7.0)	2.9	82.1	174.4	321.7	(7.0)

*Adjusted for changes to share capital and amounts borrowed.

Investment Objective

The objective of the Company is to invest in securities of European companies and in sectors or geographical areas which are considered by the Investment Manager to offer good prospects for capital growth, taking into account economic trends and business development.

Investment Policy

The Investment Manager adopts a stock picking approach in the belief that a thorough analysis and understanding of a company is the best way to identify long-term superior growth prospects. This understanding begins with identifying those companies where the ownership structure and incumbent management are conducive to the realisation of the aim of achieving superior long-term earnings growth. The Investment Manager will seek to identify companies which enjoy certain key business characteristics including some or all of the following:

- a strong management record and team, and the confidence that the Investment Manager has in that management's ability to explain and account for its actions;

- proprietary technology and other factors which indicate a sustainable competitive advantage;

- a reasonable expectation that demand for companies' products or services will enjoy long-term growth; and

- an understanding that structural changes are likely to benefit rather than negatively impact that company's prospects.

There may be sectors which do not enjoy the business characteristics described above and in such circumstances the Investment Manager will seek to identify companies that are expected to generate superior earnings growth withinthat sector.

In analysing potential investments, the Investment Manager will employ differing valuation techniques depending on their relevance to the business characteristics of a particular company. However, the underlying feature will be the sustainability and growth of free cash-flow in the long-term.

Material Events

During the period under review the Company issued 50,000 Ordinary shares representing 0.06% of the issued share capital.

Company Information

The Company's Ordinary shares are listed on the London Stock Exchange. The Ordinary share price is published in both the Financial Times and The Times under `Investment Companies'.

The Net Asset Values of the Company's Ordinary shares are calculated daily and can be viewed on the London Stock Exchange website at www.londonstockexchange.com (selecting 'News and Events' and then 'RNS').

For further information, please contact:

Richard Pavry

Head of Investment Trusts

Jupiter Asset Management Limited

[e-mail]  

020 7314 4822

16 October 2014

The Company's Registered office is at 1 Grosvenor Place, London SW1X 7JJ.

This interim management statement has been prepared solely to provide information to meet the requirements of the UK Listing Authority's Disclosure and Transparency Rules.

 

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