Jupiter Green invests in companies that put solving environmental problems at the core of their business.
The first thing that springs to many people’s minds on this topic is renewable energy, but the investment trust is much broader than that, seeking out opportunities in everything from energy efficiency, to agriculture, the circular economy and sustainable mobility.
Manager Jon Wallace joins us on the latest Investing Show to discuss how the trust looks for the companies that can help improve the environment we live in and make a profit.
Investing in such companies means seeking out growth opportunities with a difference and he gives some of the examples of those it backs, including Renewcell, which breaks down and recycles used textiles, and Hoffman Green Cement, which produces low carbon cement.
Jupiter Green has been around as an investment trust since 2006 but can trace its philosophy’s history further back to the fund management house being an early UK pioneer of green investing.
Long-standing Jupiter Green manager Charlie Thomas left Jupiter and the trust recently and Mr Wallace, who has been at the fund manager since 2009 and worked on the trust for the past seven years took over the reins.
Jupiter Green doesn’t target companies of a particular size, says Mr Wallace, but its investment skews towards smaller and medium-sized companies as this is where the best value, growth and opportunities lie for innovation and ideas that need to be scaled up quickly.
He says the trust is ‘all eyes and ears looking for those ideas’.
The trust has the ability to be nimble in its positions, as it is a relatively small size at £50million and is one of just three trusts in the Association of Investment Companies’ Environmental sector, along with Menhaden and much bigger rival, the £1.2billion Impax Environmental Markets.
Jupiter Green has returned 73.6 per cent over the past 12 months, 45 per cent over three years and 108.8 per cent over five years. It is ahead over one year of the 67.3 per cent sector average, but behind the 79.3 per cent three-year and 155 per cent five-year sector averages.
Renewcell – one of the comapnies Jupiter Green invests in – recycles textiles and helps to mdeal with the heavy environmental cost of the clothing industry
By comparison, Impax Environmental Markets is up 298.8 per cent over five years – dragging up the average in a sector containing just three trusts – while the average Global investment trust is up 167.7 per cent over the same period.
Due to its specilaist nature and small size, Jupiter Green has a relatively high ongoing charges figure of 1.6 per cent and after a recent rerating in investors’ eyes its share price has shifted from a discount to a premium of 4.4 per cent to net asset value.
Rival trust, Impax Environmental Markets, has an ongoing charges figure of 1.02 per cent and is trading at a 5 per cent premium.
One of the most interesting areas that Jupiter Green invests in says Mr Wallace is sustainable agriculture.
Farming is an industry that has come under fire for its environmental impact but the rapid adoption of technology and new methods is changing this and providing interesting investing opportunities, says Mr Wallace.
He also discusses why the trust has just 30 per cent invested in the US – a relatively low figure compared to the country’s global stock market standing – and whether that could change under Joe Biden’s green push in his presidency.
