Steve Davies took charge in April 2016 and favours a high-conviction, bottom-up investment approach focused on recovery and growth stocks.
Jupiter UK Growth Trust (JUKG) invests in a concentrated portfolio of mainly UK equities for capital appreciation. Its report and accounts for the year to 30 June 2018 show shareholders’ assets of £65 million.
Steve Davies, who heads Jupiter Asset Management’s UK equities team, took charge in April 2016 to implement a new investment strategy. He favours a high-conviction, bottom-up investment approach focused on recovery and growth stocks. The former refers to seriously out-of-favour firms with the potential to have their fortunes transformed by industry restructuring or management change. The latter encompasses companies Davies expects to generate above-average growth over a lengthy period. His growth bias is expected to work best in rising markets.
JUKG’s portfolio comprises 36 holdings, with the top 10 accounting for nearly 50 per cent by value. Banks, general retailers, and travel and leisure stocks account for 17.9 per cent, 12.3 per cent and 10.9 per cent respectively. It has no exposure to mining, automotives and parts or information technology.
Returns were hit last year by foreign investors’ growing aversion to domestically oriented UK stocks in the run up to Brexit. But this was offset to some extent by an unusually high level of takeovers, due to low valuations.
Gearing, which is deployed tactically, was 9 per cent at the end of June and is expected to increase when the board has more con‑ dence in the outlook. Ongoing charges were 1.14 per cent.
The net asset value (NAV) total return of 4 per cent lagged the 9 per cent return on the FTSE All Share index, which is JUKG’s benchmark. With the board committed to keeping the share price close to NAV, the share price total return was 5 per cent. The annual dividend was held at 7p. The board hopes to grow it over time.