As a non-executive director of Jupiter Global Trust, it would be remiss of me not to mention today’s announcement that the company plans, subject to shareholder approval, to change its investment policy and switch to a UK growth mandate with Steve Davies, manager of the open-ended Jupiter UK Growth fund, as its new portfolio manager. While the performance of the trust under its current manager Richard Curling has been good, confirming its status as one of the City’s better-kept secrets, the trust has struggled to find new buyers with its existing mixed global/UK mandate.
Having studied the way that the market is developing, the board believes that we will have more success in growing the assets of the company by offering existing and potential new shareholders an alternative way to participate in Steve Davies’ successful high conviction UK growth strategy. The trust will be able to use gearing and derivatives and maintain high conviction positions through the market cycle in a way that the open-ended fund is restricted from doing. We are also proposing to reduce the fees on the trust and appoint a new broker in Numis.The current discount control policy will be maintained.
The broader picture is that the market for investment trusts has changed since the Retail Distribution Review abolished trail commissions, creating a more level playing field for closed end companies. While demand from direct investors is growing steadily, trusts also need to stay competitive on fees and maximise the use of the distinctive advantages of the closed end structure. As with any listed company, the onus is on the board to ensure that it remains fit for purpose as the competitive landscape it faces changes.
The proposed new mandate for Jupiter Global (to be renamed Jupiter UK Growth Trust) will offer wealth managers, financial advisers and direct investors the opportunity from now on to access the new manager’s stock-picking skills in one of two distinct ways – an option that has been very popular with the European funds run by another talented Jupiter fund manager, Alexander Darwall. (Disclosure: I own shares in the Jupiter European Opportunities investment trust that he manages). The general meeting to vote on these proposed changes will take place on April 18th.