Interim Management Statement
September 16 2010 - 7:33AM
UK Regulatory
TIDMJSS
Jupiter Second Split Trust PLC
Interim Management Statement for the three months ended 31 July 2010
The Board of Jupiter Second Split Trust PLC (the "Company") is pleased to
announce its Interim Management Statement for the quarter ended 31 July 2010.
The following report relates to the performance of the Company's investment
portfolio in the three months leading up to 31 July 2010.
Investment Manager's Report for the Quarter Ended 31 July 2010
For the period from 1 May 2010 to 31 July 2010, the decline in the Company's
Total Assets was 0.5 per cent.* compared to 0.7452 per cent. for the 3 month
sterling LIBOR (which is the Company's benchmark index adopted on 3 November
2009).
Manager's Review
Review
Capital markets were turbulent during the three months under review. Early in
the period markets began to re-price the fiscal challenges facing Europe.
Growing job losses in the US intensified fears that the domestic economy might
experience a double-dip recession, while evidence that China's economy was
slowing added to the market's woes. There was some respite in July following
positive economic data in Germany and the UK, optimistic bank stress test
results and a dilution of bank regulatory risk.
All major stock market indices ended the period lower, as indicated by a 7.4%
loss in the FTSE World (TR) index. Government bond yields fell on concerns about
deflation and currency markets were particularly volatile. Maintaining a
defensive portfolio limited the impact of the market's volatility on the
portfolio to a 0.5 per cent. loss in the Company's net asset value. However, the
extreme swings in sentiment during the period made it very difficult to generate
a positive result.
We maintained a broadly neutral market exposure in the portfolio throughout the
period. We continued to hold very modest exposure to equity markets. Our long
stock positions were focused on growth in the emerging markets, with short
positions in areas that we believe are at most risk from an economic slowdown in
Europe. Our fixed interest exposure included a long in the corporate bond of
Altria Group, the US tobacco company, and a holding in an Australian government
bond (which we added towards the end of the period), both of which have
relatively high yields. Our long-term short in Japanese government bonds
remained.
Recent corporate results for Western companies have been generally more positive
than forecast. However, earnings risks persist. The impact of fiscal austerity
in Europe is only starting to filter through to the wider economy. Additionally,
the outlook for the US is looking more difficult with state level fiscal
restraint starting to take its toll on the economy. We therefore remain
carefully invested.
Philip Gibbs
Fund Manager, Jupiter Asset Management Limited
Total Assets as at 31 July 2010: GBP219,799,782
Shares in Issue on 31 July 2010:
432,723,586 Zero Dividend Preference shares
216,361,793 Geared Ordinary shares
+-------------------------+----------------+---------------+-------------------+
| |Net Asset Value |Market Price |Premium/ (Discount)|
| |(p) |(p) | |
+-------------------------+----------------+---------------+-------------------+
|Geared Ordinary excluding| | | |
|income/expenses |40.70 | | |
+-------------------------+----------------+41.25 |1% |
|Geared Growth including | | | |
|income/expenses |41.86 | | |
+-------------------------+----------------+---------------+-------------------+
|Packaged Units excluding | | | |
|income/expenses |101.60 | | |
+-------------------------+----------------+103.00 |1% |
|Packaged Units including | | | |
|income/expenses |102.76 | | |
+-------------------------+----------------+---------------+-------------------+
|Zero Dividend Preference | |31.75 |4% |
|shares |30.45 | | |
+-------------------------+----------------+---------------+-------------------+
Portfolio Distribution on 31 July 2010 Percentage of Total Assets
North America: equities 5%
Hong Kong: equities 2%
Turkey: equities 1%
United Kingdom: equities 4%
Cash and other liquid assets - Yen 11%
Cash and other liquid assets - GBP 54%
Fixed interest 23%
100%
The Company has no exposure to other UK listed investment companies as at 31
July 2010.
Top Ten Holdings on 31 July 2010*
Company Country of Listing % of Total Assets
Altria 9.95% 10/11/2038 United States 14.4
Australia (Commonwealth of) 5.75% 15/5/2021 Australia 8.2
Citigroup United States 4.4
Standard Chartered United Kingdom 3.7
Jupiter Hyde Park Hedge Fund Bermuda 2.6
Sun Hung Kai Properties Hong Kong 2.1
Turkiye Garanti Bankasi Turkey 0.9
DNB NOR Norway 0.7
Lloyds Banking Group PLC United Kingdom 0.6
Datawind UK United Kingdom 0.5
38.0
*Some of this exposure is through derivatives
Comparative Performance to 31 July 2010
+---------------------------+---------+---------+----------------------+
| | 1 Month | 3 Month | Since Reconstruction |
| | | | (3 Nov 2009) |
+---------------------------+---------+---------+----------------------+
| | % | % | % |
+---------------------------+---------+---------+----------------------+
| Total Assets* | (1.1) | (0.5) | 3.2 |
+---------------------------+---------+---------+----------------------+
| Benchmark** | 0.7452 | 0.7425 | 0.7425 |
+---------------------------+---------+---------+----------------------+
| Geared Growth Share NAV | (3.4) | (3.6) | 1.8 |
+---------------------------+---------+---------+----------------------+
| Geared Growth Share Price | (2.4) | (1.2) | 3.1 |
+---------------------------+---------+---------+----------------------+
Sources
* Jupiter Asset Management Limited ("Jupiter")
** The Company's benchmark index is 3 month sterling LIBOR calculated as at the
first business day of each calendar month
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. The Company aims to
provide Geared Ordinary shareholders with capital growth, with income as a
secondary objective, and to provide New Zero Dividend Preference shareholders
with a predetermined final capital entitlement on the 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 allocation of
assets between different sectors will be determined by the Investment Manager in
his absolute discretion.
In addition to equities, and equity related securities (including derivatives),
the types of investment and assets in which the property of the Company may be
invested include cash, near cash, fixed interest securities, currency exchange
transactions, index linked securities, money market instruments (MMIs) and
deposits.
These instruments may be used for the purposes of both efficient portfolio
management and, where it is considered to be appropriate for investment purposes
by the Investment Manager and the Board to adopt an investment strategy aimed at
achieving positive returns across market cycles with low levels of volatility.
This strategy will seek to take advantage of specific macro economic
circumstances and market pricing anomalies.
At times the portfolio may be concentrated in any one or a combination of such
assets and as well as holding physical long positions the Investment Manager may
create synthetic long and short positions through the use of equity related
securities.
The Investment Manager will seek to limit volatility through diversified
portfolio holdings and sector exposures, active management of the Company's net
and gross portfolio exposure to the market, and through the use of derivatives.
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. The Company manages an
adequate spread of investment risk, with no one investment making up more than
10 per cent. of the Total Assets of the Company at the time of investment.
It is the Company's stated policy that not more than 10 per cent., in aggregate,
of Total Assets may be invested in other UK listed investment companies unless
such companies have stated investment policies to invest no more than 15 per
cent. of their Total Assets in other UK listed investment companies (including
listed investment trusts).
The Company may make use of short term borrowings such as an overdraft facility
for liquidity and investment purposes in order to gear the returns on the
Company's investment portfolio but in any event borrowings will not exceed, at
any one time, 25 per cent. of Total Assets without shareholder approval by
ordinary resolution.
The Company may also hedge currency exposures. The Company may also purchase
unlisted securities (up to a maximum of 5 per cent. of Total Assets).
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 Ordinary Shareholders.
Material Events
There were no material events during the period to which this Interim Management
Statement relates.
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.
Jupiter Asset Management Limited
[HUG#1444859]
This announcement is distributed by Thomson Reuters on behalf of
Thomson Reuters clients. The owner of this announcement warrants that:
(i) the releases contained herein are protected by copyright and
other applicable laws; and
(ii) they are solely responsible for the content, accuracy and
originality of the information contained therein.
Source: Jupiter Second Split Trust PLC via Thomson Reuters ONE
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