Interim Management Statement
March 17 2008 - 11:23AM
UK Regulatory
Jupiter Second Split Trust PLC
Interim Management Review for the three months ended 31 January 2008
The Board of Jupiter Second Split Trust PLC (the "Company") is pleased to
announce its interim management review for the quarter ended 31 January 2008.
The following report relates to the performance of the Company's investment
portfolio in the three months leading up to 31 January 2008.
Investment Manager's Report for the Quarter Ended 31 January 2008
For the period from 1 November 2007 to the 31 January 2008, the loss on the
Company's Total Assets was 5.4 per cent.* compared to a decline of 12.1 per
cent. for the Company's composite benchmark index**.
Manager's Review
Conditions in the US economy deteriorated rapidly during the period with the
credit crunch deepening. Write downs among several US and European investment
banks due to subprime exposure have been enormous, representing a significant
erosion of investment capital. Western banks have reigned in lending to
strengthen balance sheets and over-leveraged consumers are being forced to
tighten spending in the face of the downturn in the housing market. Central
banks have responded with significant capital injections into credit markets and
the US Federal Reserve has made aggressive interest rate cuts in an attempt to
minimise the depth and length of the economic slowdown. More aggressive steps
will likely be necessary before Western economic and financial market stability
is restored.
The portfolio was defensively positioned in a highly volatile market. We have
avoided UK and US consumer shares for considerable time and reduced overall
exposure to financial companies during the summer of 2007. We also took tactical
measures in November by establishing positions in UK Gilts and US Treasury bonds
which we held for most of the period. While not immune to the slowdown in the
west, several emerging market economies are well placed to grow well above the
global average and we continued to play this theme through selective resources
stocks. We also hold Hong Kong property stocks, which are benefiting from
rapidly falling interest rates in the US due to the currency peg with the US
dollar.
Philip Gibbs
Fund Manager, Jupiter Asset Management Limited
Sources
* Jupiter Asset Management Limited ("Jupiter")
** The Company's composite benchmark index comprises 75 per cent. FTSE Actuaries
All-Share Index and 25 per cent. FTSE Actuaries World Index
Total Assets as at 31 January 2008: �130,643,679
Shares in Issue on 31 January 2008:
94,905,683 Zero Dividend Preference shares
94,905,683 Geared Growth shares
Net Asset Value (p) Market Price (p) Premium/(Discount)
Zero Dividend 74.16 75.50 2%
Preference shares*
Geared Income shares 63.50 52.50 (17%)
Units 137.66 128.00 (7%)
Portfolio Distribution on 31 January 2008 Percentage of Total Assets
United Kingdom 57%
Europe 17%
Other 20%
Cash and fixed interest 6%
100%
The Company's exposure to other UK listed investment companies was 1.8% as at 31
January 2008.
Top Ten Holdings on 31 January 2008
Company Country of Listing %
Sun Hung Kai Properties Hong Kong 8.3
Credit Suisse Switzerland 8.0
Rio Tinto United Kingdom 6.8
Cheung Kong (Holdings) Hong Kong 6.2
BHP Billiton United Kingdom 5.6
Royal Dutch Shell `B' United Kingdom 4.3
Vedanta Resources United Kingdom 4.1
BP United Kingdom 4.1
Shun Tak Holdings Hong Kong 3.7
UBS AG Switzerland 3.1
54.2
Comparative Performance to 31 January 2008
1 Month 3 Months 1 Year 3 Years Since Last Since Launch
Annual Report
% % % % % %
Total Assets (3.3) (5.4) (3.4) 28.3 (5.4) 40.5
Benchmark** (8.5) (12.1) (5.5) 23.6 (12.1) 30.6
Geared Growth Share (7.5) (12.8) (13.6) 32.8 (12.8) 60.4
NAV
Geared Growth Share (12.1) (18.9) (14.6) 18.0 (18.9) 34.6
Price
Material Events
Following a ruling by the European Court of Justice, HM Revenue and Customs has
recently accepted that VAT will no longer be charged on investment management
fees. For the Company it may also be possible to recover some of the VAT paid in
the past on management fees. However, the amount repayable is subject to a
number of legal and procedural considerations which currently are under review
by the Directors.
The Board is not aware of any other significant events or transactions which
have occurred between 31 October 2007 and the date of publication of this
interim management statement which would have a material impact on the financial
position of the Company.
Payment of dividends
On 31 January 2008 an interim dividend of 1.7p per Geared Growth share was paid
to shareholders on the register as at the close of business on 11th January
2008.
Availability of Monthly Fact Sheets
Monthly fact sheets for the Company are available for download from
www.jupiteronline.co.uk and by post or fax on request from the company
secretarial department.
The Company's Geared Growth shares are listed on the London Stock Exchange and
the prices are published in the Financial Times under `Investment Companies'.
The Net Asset Values of the Company's Geared Growth shares are calculated weekly
and can be viewed on the London Stock Exchange website at
www.londonstockexchange.com (under the heading `Market News').
INVESTMENT OBJECTIVE
The objective of the Company is to achieve absolute returns from a portfolio
comprising predominantly the equity and equity related securities of both UK
companies and non-UK companies. The Company aims to provide Geared Growth
shareholders with capital growth, with income as a secondary objective, and to
provide Zero Dividend Preference shareholders with a predetermined final capital
entitlement on the planned winding-up date.
INVESTMENT POLICY
The investment policy of the Company is to invest in listed equities and equity
related securities (such as convertible securities, preference shares,
convertible unsecured loan stock, warrants and other similar securities).
The Investment Manager is not limited in the asset allocation of the Company's
investment portfolio between sectors, geographic regions or the types of
equities and equity related securities in which the Company may invest, but
instead the Investment Manager considers each potential investment on its own
merits. The Investment Manager focuses on the sectors that he considers to be
the most undervalued areas of the market from time to time and the allocaion of
assets between different sectors will be determined by the Investment Manager in
his absolute discretion.
The Investment Manager does not seek to track the performance of the Company's
Benchmark index and is not restricted in his investment decisions as a
consequence of the constituents of the Benchmark. There could be significant
variations between the allocation and performance of the Company's assets and
the Benchmark.
The Company's investment portfolio is focused on companies where, in the opinion
of the Investment Manager, valuations are low and growth in earnings or assets
is not fully appreciated. The Investment Manager seeks to identify companies
within growth industries which enjoy certain key characteristics, including an
imaginative, proven and incentivised management team and balance sheet strength.
Any material change in the investment policy of the Company described above may
only be made with the approval of Shareholders by an ordinary resolution and the
separate class approval of Geared Growth Shareholders.
For further information, please contact:
Richard Pavry
Director of Investment Trusts
Jupiter Asset Management Limited
rpavry@jupiter-group.co.uk
020 7314 4822
Jenny Thompson
Company Secretarial Department
Jupiter Asset Management Limited
jthompson@jupiter-group.co.uk
020 7314 5565
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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