TIDMJSS
RNS Number : 1833C
Jupiter Second Split Trust PLC
12 March 2014
Jupiter Second Split Trust PLC
Interim Management Statement for the three months ended 31
January 2014.
The Board of Jupiter Second Split Trust PLC (the "Company")
announce its Interim Management Statement for the quarter ended 31
January 2014.
The following report relates to the performance of the Company's
investment portfolio in the three months leading up to 31 January
2014.
Investment Manager's Report for the Quarter Ended 31 January
2014
For the period from 1 November 2013 to 31 January 2014, the
Company's Total Assets have returned 0.1 per cent compared to 0.1
per cent for the 3 month sterling LIBOR.
Market Review
In November, the S&P 500 index was pushed to a new record
high in the wake of a temporary resolution to the US debt ceiling
debate.The European Central Bank surprised markets by cutting rates
by 25bps to 0.25% to support domestic demand as inflation, at 0.8%,
remained well below the ECB's target of "below but close to 2%". By
December, the way was clear for the US Federal Reserve to commence
winding down its regular asset purchases. The move was greeted
positively by equity and bond markets. January was a month of two
halves. US and European markets had a powerful start but then they
joined the sell-off in other markets during the final two weeks.
Risk assets fell sharply and bonds rallied. The culprit was
contagion fear from the emerging markets where many currencies
fell.
Policy review
The Company began the period under review with a significant
amount of cash following the unwinding of several positions by the
previous fund manager. We deployed some of this cash into
medium-term notes issued by a range of solid companies. A small
portion (approx. 5%) of the portfolio was invested into Japanese
equities. In keeping with its mandate to achieve absolute returns
the portfolio remained defensively positioned during a turning
point and period of transition in US monetary policy given the
potential for volatility arising from the repatriation of capital
from emerging markets. Sterling exposure was 96% at the end of the
period.
Outlook
We remain wary of US equities due to their high valuations,
record high margin debt and the onset of tapering. In contrast, it
is our view that Japan looks like the most interesting of the major
developed equity markets, for a number of reasons, primarily
because of the likely positive effect of further monetary easing
there.
Miles Geldard
Fund Manager, Jupiter Asset Management Limited
21 February 2014
Total Assets as at 31 January 2014: GBP232,194,105 (Capital
Only)
Shares in Issue on 31 January 2014:
432,723,586 Zero Dividend Preference shares
216,361,793 Geared Ordinary shares
Net Asset Value (p) Market Price (p) Premium/ (Discount)
------------------------------------------- -------------------- ----------------- --------------------
Geared Ordinary excluding income/expenses 30.27 27.00 (11)
------------------------------------------- -------------------- ----------------- --------------------
Geared Growth including income/expenses 30.52
------------------------------------------- -------------------- ----------------- --------------------
Packaged Units excluding income/expenses 107.32 102.50 (4)
------------------------------------------- -------------------- ----------------- --------------------
Packaged Units including income/expenses 107.57
------------------------------------------- -------------------- ----------------- --------------------
Zero Dividend Preference shares 38.52 39.25 2
------------------------------------------- -------------------- ----------------- --------------------
Underlying Currencies as a Percentage of Gross Currency
Exposure*
UK Sterling (base currency) 78%
----------------------------- -----
US Dollar 4%
----------------------------- -----
Euro 12%
----------------------------- -----
Japanese Yen 5%
----------------------------- -----
Other 1%
----------------------------- -----
100%
----------------------------- -----
*The fund is sterling based. This table aggregates physical and
synthetic exposures in the portfolio.
Country Allocation as a Percentage of Total Assets*
Long Short Long Short
---------------- ------ ------ --------- ---------
Bonds Bonds Equities Equities
---------------- ------ ------ --------- ---------
United Kingdom 28% 0% 1% 0%
---------------- ------ ------ --------- ---------
United States 4% 0% 1% 0%
---------------- ------ ------ --------- ---------
Australia 2% 0% 0% 0%
---------------- ------ ------ --------- ---------
Denmark 2% 0% 0% 0%
---------------- ------ ------ --------- ---------
France 4% 0% 0% 0%
---------------- ------ ------ --------- ---------
Germany 2% 0% 0% 0%
---------------- ------ ------ --------- ---------
Netherlands 8% 0% 0% 0%
---------------- ------ ------ --------- ---------
Norway 2% 0% 0% 0%
---------------- ------ ------ --------- ---------
Switzerland 2% 0% 0% 0%
---------------- ------ ------ --------- ---------
Japan 0% 0% 5% 0%
---------------- ------ ------ --------- ---------
Total 54% 0% 7% 0%
---------------- ------ ------ --------- ---------
Top Ten Long Positions as a Percentage of Total Assets*
Company Country of Listing % of Total Assets
Barclays Bank 14% Var Sub Perp United Kingdom 4.3
LBG Capital 2 Plc 6.385% 12/05/2020 United Kingdom 3.7
LBG Capital 2 Plc 15% 21/12/2038 United Kingdom 3.1
ING Bank 3.875% 23/12/2016 Netherlands 2.1
Stagecoach Group 5.75% 16/12/2016 United Kingdom 2.0
London Stock Exchange Var 07/07/2016 United Kingdom 2.0
JP Morgan Chase 6.128% FRN United States 2.0
Royal Bank of Scotland Var 12/11/2021 United Kingdom 2.0
National Australia Bank Mtn Var 12/11/2016 Australia 2.0
Vodafone 4.625% NTS 08/09/2014 United Kingdom 2.0
------------------
25.2
*Some of this exposure is through derivatives. Exposure to other
UK listed investment companies is nil.
Comparative Performance to 31 July 2013
One Three One Last Since
--------------------------- ------ ------ ---------- ----------------------------- ---------------
Month Month Year Annual Report Reconstruction
(3 Nov 2009)
--------------------------- ------ ------ ---------- ----------------------------- ---------------
% % % % %
--------------------------- ------ ------ ---------- ----------------------------- ---------------
Total Assets* (0.6) (0.3) (0.5) (0.7) 9.0
--------------------------- ------ ------ ---------- ----------------------------- ---------------
Benchmark** 0.00 0.1 0.5 0.6 2.9
--------------------------- ------ ------ ---------- ----------------------------- ---------------
Geared Growth Share NAV (3.6) (5.1) (15.5) (18.7) (24.3)
--------------------------- ------ ------ ---------- ----------------------------- ---------------
Geared Growth Share Price 8.0 1.4 (6.1) (15.0) (32.5)
--------------------------- ------ ------ ---------- ----------------------------- ---------------
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.com 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 contracts for
difference, convertible securities, preference shares, convertible
unsecured loan stock, warrants and other similar securities).
The Investment Manager ('Jupiter Asset Management Limited') 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 it 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 macroeconomic 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 and balance
sheet strength.
The Company manages an adequate spread of investment risk, with
no one investment making up more than 15% of the Total Assets of
the Company at the time of investment.
The Board has not set an objective of a specific Portfolio Yield
for the Company and the level of such yield is expected to vary
with the sectors and geographical regions to which the Company's
portfolio is exposed at any given time. However, substantially all
distributable revenues that are generated from the Company's
investment portfolio are expected to be paid out in the form of
annual dividends.
It is the Company's stated policy that not more than 10%, 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% 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% of Total
Assets without shareholder approval by ordinary resolution.
The Company may also hedge currency exposures and unlisted
securities (up to a maximum of 5% 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.
For further information, please contact:
Richard Pavry
Director of Investment Trusts
Jupiter Asset Management Limited, Company Secretary
rpavry@jupiter-group.co.uk
020 7314 4822
Alternatively you may contact Jupiter Asset Management Limited
on 0207 412 0703 or investment companies @jupiter-group.co.uk and
online from :www.jupiteronline.com.
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
This information is provided by RNS
The company news service from the London Stock Exchange
END
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