Juno Selection Fund: Q2 2019
Over 25% Performance over First Half of 2019
The Hague – July 2019 – The Juno Selection Fund has ended the second quarter of 2019 with a positive result of 2.8%. The value of a participation in the Juno Selection Fund has achieved a level of €386.66 as of June 30, 2019, an increase of 25.4% since the beginning of the year.
Since its inception in January 2008, the fund has now generated a CAGR of +12.5% per annum (total return + 287%). The Juno Selection Fund demonstrates a clear outperformance compared to the market in general. Since January 2008, the Dutch AEX, dividends reinvested, has achieved a CAGR of +4.6% per annum. The EMIX Smaller Europe Index increased by +5.7% per annum over the same period.
Our investment style is based on a highly concentrated portfolio of European (family-owned) companies, combined with a proven and rigorously applied valuation methodology. For years in a row, the group of companies selected by Juno show an annual earnings growth of 10-15% in aggregate. This earnings growth has been the driver behind the attractive share price performance we have achieved.
“Within the stock market we are increasingly seeing two extremes: good, but more cyclical companies with less predictable earnings growth that are trading at, what appear to be very attractive price-earnings ratios. On the other hand the proven, predictable growers, which are often trading at very high multiples, sometimes too high.”
Frans Jurgens, director and co-founder of Juno: “The current negative interest rate on European bonds should have led to astronomical price-earnings ratios for equities, if the historical inverse correlation between these two would be our guiding light. Instead, within the stock market we are increasingly seeing two extremes: good, but more cyclical companies with less predictable earnings growth that are trading at, what appear to be very attractive price-earnings ratios. On the other hand the proven, predictable growers, which are often trading at very high multiples, sometimes too high.”
Lennart Smits, director and co-founder of Juno: “It remains of great importance that we continue to apply our strict discipline in the valuation of our companies. Future earnings growth is essential, but not paying too much for that future earnings stream is probably just as important. Even though we have reduced some positions due to too high valuations, we still have enough attractively priced, annually growing companies in the portfolio. Companies that we expect to continue to be able to increase their earnings by 10% to 15% annually. We therefore look to the future with great confidence.”
Currently, the five largest holdings in the Juno Selection Fund are: SimCorp, Grenke, Technogym, Paradox and CTS Eventim.
About Juno Investment Partners
Since 2007, Juno Investment Partners has been investing in a highly concentrated portfolio of European listed companies with predictable and stable earnings growth, often family-owned businesses.
We focus on companies with a high return on invested capital, strong margins, and highly predictable (free) cash flows. These are typically companies with a strong competitive position and clear added value for their clients, enabling them to continue creating value over the long term.
Based on these characteristics, we select a limited number of companies that we want to understand thoroughly. The portfolio consists of approximately fifteen companies. These are analyzed intensively, visited regularly, and monitored over several years. The investment horizon is long, typically well over five years. Our analysts and portfolio managers also invest in the funds themselves.
Juno offers three products. The Juno Selection Fund focuses on small and medium-sized companies. The Juno Continuation Fund focuses on medium-sized companies. In addition, Juno offers individual asset management via managed accounts, using the same investment approach. The Juno Selection Fund was launched in 2008 and invests in European companies with an initial market capitalization between €250 million and €4 billion. The fund was closed to new investments for a long time and has been accessible to existing participants again since April 2023.
The Juno Continuation Fund was launched on February 1, 2020, and invests in medium-sized companies with a market capitalization between €4 and €20 billion. Here, too, the emphasis is on companies that often have family or management as co-shareholders.
Juno holds an AIFM license from the AFM.
