Juno Selection Fund achieves a return of 33.8% 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”.
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.
About the Juno Selection Fund and Juno Investment Partners
The Juno Selection Fund invests in shares of extraordinary European small and medium-sized companies with an initial market value between 250 million and 4 billion. Often these are family-owned businesses or companies where a family or management itself is also a main shareholder. Companies that can continue to achieve predictable and stable earnings growth year after year are considered for investment. The selection process focuses on the return on invested capital and free cash flows with a highly predictable character. Our analysts / portfolio managers put together a highly concentrated portfolio of companies that they themselves identify, analyze and regularly visit. Selected companies often stay in the portfolio for a longer period (on average more than three years). With this investment style, participants of the Juno Selection Fund have achieved a superior investment result in recent years.
The Juno Selection Fund is managed by Juno Investment Partners. Juno Investment Partners has an AIFM license (as referred to in article 2:65 Wft), granted by the Dutch Financial Markets Authority (“AFM”). Juno Investment Partners is also the manager of the Juno Continuation Fund that will be launched on 1 February 2020. With the same investment style, the Continuation Fund focuses on listed (family-owned) companies with a market value that is higher than the focus of the Selection Fund (respectively 4 – 20 billion euros, versus 250 million – 4 billion euros).
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