Jupiter Green underperforms in first half

During the six months to 30 September 2016 Jupiter Green’s net asset value per share increased by 16.5 per cent. (with dividends added back). This compares with a total return in the benchmark index, the MSCI World Small Cap Net Total Return Index of 20.9 per cent. over the same period. The mid market price of the shares increased by 23.6 per cent.

The manager says that the rally in energy and materials stocks not held in the portfolio due to the fund’s environmental focus was an impediment to relative performance against their broad-based benchmark.

Notable positives included holdings involved in water treatment and smart meters. Among these, A.O. Smith, which manufactures residential and commercial water heaters and boilers, benefited from international expansion and growing demand for energy efficient boilers. Xylem, meanwhile, saw improved market conditions for its water technologies and made a strategic acquisition of a company specialising in ‘smart’ water meters, while smart meter specialist Itron experienced a pickup in demand. Elsewhere, Vestas Wind Systems continued to impress the market with consistently strong earnings updates and improved guidance, with the flagship wind turbine business winning multiple projects.

In contrast, the period proved challenging for US solar businesses SunPower and First Solar, which lost ground after  the  schedules  for  a  number of projects were postponed, with the five-year extension to the tax credits announced in December 2015 proving something of a double-edged sword for the US solar sector. Longer term, the extension should help to increase overall solar demand in the US, in the short term it has caused over capacity in the industry. This stands in contrast to the wind sector, which has largely continued to flourish.

JGC : Jupiter Green underperforms in first half