Jupiter UK Growth Investment Trust (LON:JUKG) aims to deliver long-term capital appreciation, primarily through investing in UK equities. The fund has few constraints against the benchmark, and the manager, Steve Davies, is highly selective in his bottom-up approach, investing in 30–35 companies with recovery or growth potential. The portfolio and its performance can therefore diverge significantly from the FTSE All-Share index. Davies believes UK equities are currently unloved, and investors are excessively pessimistic and focused on the short-term outlook. While he expects the UK market to remain out of favour over the near term, as a natural contrarian investor with a long-term horizon, he says he is finding exciting investment opportunities.
Investment strategy: Fundamental and engaged
JUKG’s investment approach is bottom-up and rigorous. In addition to applying fundamental analysis to companies, Davies also seeks a broader perspective to help him understand businesses and build conviction in an investment case. This involves personal engagement with chairmen of investee companies and deep dives into understanding their industries (a recent research trip to the US focused on its shale oil industry). A relatively small number of portfolio investments means the manager has the capacity to undertake this labour-intensive approach.
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