New Initiatives From U.S. Small-Cap Value Specialist
Edison | Nov 02, 2017 09:03AM ET
Jupiter US Smaller Companies PLC (LON:JUS) has announced a number of new initiatives and enhancements to its investment process, aimed at boosting shareholder value and the potential for long-term growth and capital preservation. The manager intends to increase concentration in favoured holdings and be less keen to take profits in winning stocks, at the same time as acting more quickly to cut positions that are not proceeding as hoped. Meanwhile, the board has put in place the trust’s first gearing facility, scrapped the performance fee and introduced a new, tiered management fee, alongside a commitment to growing the trust to a target £200m over the next two to three years. While JUS’s value investment style has been out of favour in the US for the past decade, Fund Manager Robert Siddles says that with the bull market in growth stocks becoming more and more extended, the case for value is stronger than ever.
Investment strategy: Capital preservation and growth
JUS Manager Robert Siddles has a risk-aware, value-focused investment approach, aiming to find good-quality companies that are trading at a substantial discount to their true worth. Stocks identified by an initial value screen must pass a five-step ‘good company test’ to be considered for inclusion in the 50-60 stock portfolio. Siddles tends to avoid certain areas, such as high technology, biotech and fashion, but has increased JUS’s weighting in consumer discretionary stocks over the past year. He divides the holdings into ‘compounders’ – those with valuable assets or earnings that offer great long-term growth potential – and recovery or turnaround situations, which will usually have a shorter (two- to three-year) holding period.
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