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Home > Investments > Investment Trusts

Jupiter Europe star Darwall disappointed at losses

European Investment trust outperforms benchmark amid “unusually high” turnover.

By Rebecca Clancy | Published Aug 13, 2012 | comments

Jupiter European Opportunities investment trust manager Alexander Darwall has spoken of his disappointment after his trust lost money in the year to end-May, even though it beat its benchmarks.

Reporting results for the £240.1m investment trust last week, Mr Darwall said while the trust’s performance relative to its benchmarks was “satisfactory”, the fact its investors lost money was “disappointing”.

The trust outperformed its benchmarks convincingly in the results period, with its assets falling by 8.1 per cent while its benchmark FTSE World Europe ex UK index shed 24.2 per cent.

The results come after analysts at Oriel Securities last month hailed the trust as the best of its kind available to UK investors, hailing its managers’ “hard work, experience, business acumen and teamwork”.

Mr Darwall said his portfolio “polarised clearly into winners and losers” in the reporting period.

He said that most of the winners were “flexible, global companies,” such as UK-listed testing and inspection company Intertek Group and Dutch-based chemical and oil storage company Vopak.

“Disappointments” came from companies suffering overcapacity in their markets, including Aixtron, the designer and manufacturer of equipment for the semi-conductor industry Marine Harvest, the salmon farmer; and Oriflame.

“In all cases we had misunderstood the robustness and quality of the different business models,” said Mr Darwall.

“Moreover, in all cases we were disappointed by management response to the challenges.”

Within the reporting period the manager said there was an “unusually high” number of new purchases, “a reflection that this time of great challenges and change can also be a time of great opportunity for some companies”.

Since May 31 the trust’s portfolio of assets has gained 11 per cent, compared to the benchmark index’s 10.2 per cent gain, according to Numis Securities.

The trust’s share price on August 9 of 302p represented a 5.8 per discount to its net asset value.

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