Juno Selection Fund: Q1 2012

Juno Selection Fund reaches new all time high

The Juno Selection Fund ended the first quarter of 2012 with a further increase in the value of the participations of +7.6%. As one of very few equity funds, Juno was able to achieve a positive result in 2011 and we are pleased that we have been able to continue this positive trend during the first quarter of 2012.  The Dutch AEX index was beaten again this year but we did lag behind the HSBC Smaller Europe Index somewhat. Considering the substantial outperformance compared to that index in 2011, this is in our opinion neither remarkable nor alarming.

Since inception of the fund in January 2008, the annual compound rate of return of the Juno Selection Fund is +8.6% per annum. Over the full period since inception, the fund shows a positive total return of +41.7%. With this result, the fund outperforms the general equity markets by a great margin: the HSBC Smaller Companies Index decreased since the inception of the Juno Selection Fund by -11% while the AEX also made a negative return during that same period: -33%.

We also compare our performance to the performance of other equity funds in Europe. After the first 3 months of 2012, Juno’s top position in the rankings of both one year and three year performance remained mostly unchanged compared to the past year and Juno is still in the top three for both periods (+9.14% and +9.84% respectively).
Many of our portfolio companies are family owned businesses or have a management that own equity in the business. This often results in them having a true long term vision, dedication, advocates of strong corporate cultures and with an aversion to debt. These characteristics are the main reasons why our companies have come out of the recent economic downturn much stronger than their peers. In the process, our companies have been able to significantly strengthen their foundation for future growth. Even in 2011, the compounded underlying profits of our portfolio companies increased again at a significant rate. Last year this growth came to 17%, which was considerably higher than we had anticipated. Since the inception of the Juno Selection Fund, the underlying profits of our portfolio companies have steadily increased by more than 80%, at the high end of our target of 10-15% per annum. This continuing stable growth is the engine behind the performance of the Juno Selection Fund.

A number of key factors continue to define the equity market in 2012: the strength of the German economy, the ongoing recovery in the US and increasing inflation in Europe. Juno’s portfolio companies are well-equipped for rising inflation, but this is not the case for most of the other listed companies. In time, the bond markets could well come under pressure due to increased inflation and rising rates.  In that case, there will not be many safe havens left for money that will then seek a new home. Quality stocks might then well be “the only game in town”.

About Juno Investment Partners

Juno invests in extraordinary European Small and Midcap companies. Often these are family owned businesses or companies where a family or management is also a (major) shareholder. Companies that can continue to achieve a predictable and stable profit growth, year after year, are considered for investment. During this selection process, the emphasis lies on the return on invested capital and free cash flows that are highly predictable in nature. Our analysts / portfoliomanagers put together a highly concentrated portfolio of companies that they themselves have identified, analyzed and visit frequently. These companies often remain in the portfolio for a longer period of time (over three years). With this investment style, Juno has achieved consistent superior investment results for its clients during the past years.

For questions or comments, please contact Cécile Krikke-Fritz at +, or via e-mail (