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 is an independent asset manager based in The Hague. Juno invests in concentrated portfolios of high-quality European listed companies, often family-owned businesses or companies in which founders and directors are shareholders. The selection process emphasises predictable earnings growth, a high return on invested capital, low debt levels, strong margins and free cash flow, and a sustainable competitive advantage.

Launched in January 2008, the Juno Selection Fund focuses on small- and mid-cap European companies. The portfolio typically consists of around fifteen companies. Each is analysed intensively, and regular contact is maintained with management. The investment horizon is long, generally well over five years. Juno’s analysts, portfolio managers and employees also invest their personal capital in the JSF.

In addition to the JSF, Juno offers individually managed accounts through separate mandates, using the same investment approach. Juno holds an AIFM licence issued by the Dutch Authority for the Financial Markets (AFM).