Super-sized gains for Jupiter’s US smaller-company specialist

Over the past 16 years since Robert Siddles became manager, the NAV total return has reached 385%, compared with 284% for the benchmark.

Jupiter US Smaller Companies (JUS) aims for long-term capital growth from a diversified portfolio of US smaller and medium-sized firms. Its report and accounts for the year to 30 June 2018 shows shareholders’ assets of £163 million.

The trust is managed by Robert Siddles, who has a value style of investing. He focuses on quality companies with a strong franchise, high free cash ­ ow and ownership by management. Ideally, firms are out of favour and therefore carry limited downside risk.

JUS held stakes in 42 companies at the end of June, down from 58 a year earlier. The top 10 holdings were up from 24 per cent to 36 per cent of the portfolio’s value. The greater concentration re­flected a decision to target holdings with the greatest long-term potential and sell losers promptly.

The largest sector exposures were financial services, at 23.1 per cent; producer durables, at 19.4 per cent; and consumer discretionary, at 17.6 per cent. The largest holding was Ollie’s Bargain Outlet Holdings, at 5.2 per cent.

JUS had no net gearing. Ongoing charges were almost unchanged at 1.02 per cent. The net asset value (NAV) total return was 21.1 per cent and the share price total return 23.8 per cent, both comfortably ahead of the 14.2 per cent return from the sterling-adjusted Russell 2000 index, the trust’s benchmark. This was the sixth time in 10 years that JUS’s NAV total returns have exceeded its benchmark's.

Over the past 16 years since Siddles became manager, the NAV total return has reached 385 per cent, compared with 284 per cent for the benchmark. Share buybacks keep the discount below 10 per cent in normal market conditions.

Visit jupiteram.com/JPG

A graph showing how long-term focus has paid off

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