Juno Selection Fund: Q4 2019
Juno Selection Fund achieves a 33.8% return in 2019
The Hague – January 22, 2020 – The Juno Selection Fund ended 2019 with a strong performance. With a +33.8% performance, the return was the second highest in the fund’s twelve-year history. Once again the Selection Fund managed to leave European indices behind: the EMIX Smaller European Companies Index (net) rose by +28.6% during the year. The Dutch AEX index (dividends reinvested) also had a lower return (+ 27.9%).
After 2018 ended with a negative performance, 2019 was once again a very good year for the markets. Frans Jurgens, director and co-founder of Juno: “Despite the strong stock markets suggesting otherwise, the underlying profit growth of European companies is still at a very low level. It is clear that investors are not entering the market because of the strong earnings growth of European companies, but that they wanted to take advantage of the correction of the last months of 2018 to put their poorly-yielding savings to work in equities”.
“It is encouraging that we have had several companies in our portfolio for more than 10 years.”
Juno’s investment style focuses on the long term. This “buy and hold” strategy with a low turnover, is also reflected in the names in the portfolio. Lennart Smits, director and co-founder of Juno: “Juno’s strong preference is for ‘compounders’, companies that grow their earnings in a predictable manner, year after year. It is encouraging that we have had several companies in our portfolio for more than 10 years. Over that period, we have seen their profits increase by an average of 15% per year. That implies that their results doubled every five years during that time-frame.” Over the past 10 years, Juno has also seen this healthy earnings development translate in the share price appreciation of its investments and, therefore, in the increase in value of participations in the Selection Fund: a compound annual growth rate of +13.7% per year has been achieved over this past decade.
Juno remains optimistic about the opportunities that the market offers. We continue to find attractive (family-owned) companies that, with very strong business models and excellent management teams, are able to grow much faster than the average earnings growth that we see across the European continent. We are convinced that this earnings growth will continue to translate into higher share prices for those portfolio companies.
The quarterly report can be found here and the most recent factsheet here.
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).
