Wassenaar – 28 January 2019 – The Juno Selection Fund returned -5.4% for the year 2018, mainly as a result of the negative sentiment in the last quarter when the return was strongly in the red.
 
Despite the negative return for the full year, Juno managed to stay ahead of the various indices in relative terms. The index of European small and medium-sized companies, the EMIX Smaller European Companies Index, decreased by -14.5% for the year. The Dutch AEX index (dividends reinvested) also lost more, with a decrease of -7.9%.
 
The past year was a story of opposites. Late August, the Juno Selection Fund achieved the highest net asset value in its history and the year appeared to be headed towards an attractive return. Moreover, the fund closed as per October 1st following strong inflow of clients’ follow-on investments. In hindsight, this turned out to be unfortunate timing, as stock markets showed a very strong correction in the three months that followed.
 
Among other things, this was a result of an expected slow-down in China’s economic growth following the trade war and the direct effect thereof on the earnings of businesses across Europe and the US. Furthermore, the ongoing uncertainty regarding the Brexit and the budgetary discussions between Italy and the EU did not offer any solace.
 

There have been several negative impulses lately, but in the end, lower earnings expectations are the main reason for such a correction. According to Frans Jurgens, portfolio manager and co-founder of the fund, however, this is exactly where the Juno Selection Fund’s strength lies: “We we select our companies based on their stable earnings growth, which is independent of economic cycles. We are in close contact with our portfolio companies and our recent discussions with them have given us a high level of trust in their continued ability to show above-average earnings growth. This earnings growth is after all the main engine behind future price appreciation.”
 
His colleague portfolio manager and co-founder Lennart Smits is therefore optimistic: “Not only are we confident in the earnings growth over 2018 and 2019, but also looking further ahead, we remain positive about the earnings expectations of the fifteen (family-owned) companies in the Juno Selection Fund. In the past, we have always seen that continued positive earnings growth translates into higher share prices over time. We therefore remain fully confident in the recovery of share prices and subsequent further share price appreciation of the companies in our portfolio.”
 
The portfolio of the fund currently has 15 participations of which Grenke, Simcorp and Technogym are the 3 largest.

About Juno Investment Partners

Juno Investment Partners was established in 2007 as a fully independent fund manager and has an AIFM license (as referred to in Section 2:65 of the Wft), issued by the Dutch regulator AFM. Juno specializes in the selection of exceptional listed (family owned) companies in Europe. Companies that are able to achieve predictable and stable earnings growth year after year are considered for investment. The selection process focuses on the return on invested capital, a low debt ratio and free cash flows of a highly predictable nature. The analysts/portfolio managers compile a highly concentrated portfolio of approximately fifteen companies that they identify, analyze and visit regularly. Selected companies remain in the portfolio for a longer time period (usually more than five years). All analysts/portfolio managers have themselves invested in the Juno funds.

Juno offers three products: The Juno Selection Fund, which focuses on the selection of smaller and medium-sized listed companies, the Juno Continuation Fund for medium-sized companies and individual asset management using the same investment style, for larger clients through managed segregated accounts.

– The Juno Selection Fund was launched in 2008. This mutual fund invests in distinctive European small and medium-sized companies with an initial market capitalization of €250 million to €4 billion. In recent years, this investment style has resulted in above average investment returns for participants in the Juno Selection Fund. This fund has been hard closed for further (follow on) subscriptions since 2018.

– The same investment strategy is applied in the Juno Continuation Fund, which was launched on February 1, 2020. This fund focuses on unique, medium-sized European companies with a market value between €4 billion and €20 billion at the time of initial purchase. As is the case with the Selection Fund, the Continuation Fund also has a strong preference for investments in businesses that are family owned, or companies in which a family or management itself is also a shareholder.