Juno Selection Fund

Juno Selection Fund: Q4 2020

Strategic focus on European companies with predictable earnings growth pays off in volatile corona year

Juno Selection Fund achieves significant outperformance in 2020

  • Juno Selection Fund ends challenging year with 20.6% return, including 2.4% in fourth quarter.
  • The index of European small to medium sized companies achieved a return of 7.3% in 2020.
  • Outperformance achieved by the timely divestment of positions in the first and second quarter resulting from application of strict investment criteria on predictability.
  • The portfolio companies’ weighted earnings growth remained within the 10 to 15% band width.

The Hague – January 15, 2021

The Juno Selection Fund looks back on a volatile year, but has achieved a 20.6% return, 2.4% in the fourth quarter, thanks to a consistent application of the investment strategy. The fund has thereby significantly outperformed the market average (7.3%). The timely divestment of portfolio companies whose operations were severely hit by the Covid crisis and for which it will be a long time before the demand for their products and services will return on a structural basis, has been a decisive element that positively influenced our performance.

Choosing companies with a predictable earnings growth over a three to five year period is the cornerstone of Juno’s investment style. Sticking to that principle served the fund very well in 2020. Portfolio positions in companies whose earnings growth remained intact or where Juno expects a rapid recovery in earnings, were expanded. An example in the latter category is the German company CTS-Eventim, the European market leader in organizing concerts, festivals and the sale of their tickets. This business collapsed in 2020, but thanks to insurance money, customer vouchers, cost savings and a more than excellent cash position, the company can stick it out until the concert halls are full again.

“Our focus on quality and earnings growth, without being distracted by the market as a whole, has led to solid results for many consecutive years.”

Frans Jurgens


The arrival of covid-19 vaccines in the fourth quarter sparked euphoria in global financial markets. The managers of the Juno Selection Fund believe that investors may be overly optimistic about this. After all, 2020 earnings of the average European company are expected to fall about 30 percent on average, and investors could be too positive about the speed of the economic recovery in 2021. For the coming years, it is especially important to closely follow how the level of interest rates will develop. Governments now borrow at unprecedented low rates, but will have to repay the debt in the long term. Ultimately it will be its citizens and businesses that will be presented this bill.

Frans Jurgens, manager of the Juno Selection Fund: “Our focus remains on predictable developments at our individual companies. This focus on quality and earnings growth, without being distracted by the market as a whole, has led to solid results for many consecutive years already. Earnings growth and share price increases of the companies in our portfolio have been developing in tandem for years, keeping  the companies’ stable and attractive price-earnings ratio intact. It will be a challenge in 2021 to maintain the companies’ high earnings growth as the comparison is tough and because, for some, the weak US Dollar may weigh on revenues and earnings. But our companies are generally in very good shape, have sufficient pricing power to continue to sell their products in the US and we expect to see that reflected in the 2021 returns.” 

Lennart Smits, manager of the Juno Selection Fund: “We have intervened strongly in the portfolio in 2020 to ensure that the earnings growth of the companies in the portfolio was sustained. We succeeded; an important feat. In the second quarter alone, we traded almost as much as in the whole of 2019. Had we not, the 2020 returns would have been significantly lower. We are cautiously buying back a small number of the companies we previously sold as we see improvements in visibility of earnings return and they are beginning to meet our strict criteria again. We remain cautious however, in cases where future earnings growth is harder to estimate, because that makes it much more difficult to properly value a company. Uncertainties remain aplenty, but where we see opportunities, we buy at attractive prices”.

The quarterly reports can be found here and the most recent fact sheet is here.

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.

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