Jupiter Green investment trust NAV shrinks by almost 10%

In the half-year report published today (7 December 2022), the trust’s management revealed its net asset value per ordinary share decreased 9.3% and the total return was down 9.5%.

Over the same time frame, the company’s share price fell 8.3%, a bigger decline than the MSCI World Small Cap Total Return index, which fell by 7.5%.

During the period from 1 April to 30 September, the discount traded at an average of 15%, and as of 30 September it was up at 17.9%.

At the time of writing, the discount has fallen further to 20% despite the use of share buy backs to limit its volatility.

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In the report, the management said that on 24 August 2022 the company entered into a new two year revolving loan facility agreement with Royal Bank of Scotland International Limited of £5m, which the investment adviser has been authorised by the board to draw down for investment purposes.

It said that during the reporting period the loan facility was used to apply gearing to the portfolio, but the net gearing at the end of the period (30 September) was zero.

The management said: “While the loan facility was used to apply gearing to the portfolio during the period, the net gearing at the end of this period reflected a more cautious stance on the part of the Investment Adviser given a deterioration in the nearer-term risks to market sentiment.”

Reflecting on the results, Jon Wallace, chair of Jupiter Green, said that the period covered in the report had been an “extremely challenging time” in markets, primarily because of the war in Ukraine.

The trust, which invests in clean energy as one of its six environmental themes, has been hit by the consequential rally in fossil fuel energy suppliers as a direct consequence of the war and the ongoing energy crisis.

Wallace said that environmental solutions, on both the demand and supply-side of the energy equation were “pivotal to urgently shaping sustainable and resilient energy systems” long-term, but had evidently not softened the near-term blow on the trust.

Another key investment area for the trust is sustainable food chains, and the security and resilience of agricultural supply chains at present have been majorly disrupted by the war.

Wallace said this “will surely come under greater scrutiny as issues such as affordability, security and sustainability all continue to challenge the sector”, presenting an opportunity.

Combined this outlook of real pressure to increase supply chains’ sustainability globally is a “rich hunting ground for investors in environmental solutions”.