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Jupiter European - focus on companies, not the economy

Kate Marshall | Tue 19 March 2019

Investments can go down as well as up so there is always a danger that you could get back less than you invest. Nothing here is personalised advice, if unsure you should seek advice.
  • Alexander Darwall's a talented stock picker
  • His fund's held up much better than the broader European market over the past year
  • He likes companies that use technology to get better and are ready to adapt when times get tough for others

Our view

We think Alexander Darwall, manager of Jupiter European, is a talented stock picker. He looks for something unique in the companies he invests in. They should offer a product or service that other companies find hard to replicate or do better. This means consumer demand should hold up, or get stronger, even if there are problems in the wider economy.

This approach has worked well over the long term and means Alexander Darwall has built a great track record investing in Europe. We think he's able to keep finding some of the continent's greatest success stories.

The fund isn't on the Wealth 50 though. There are other European funds we think will do well over the long run, which are also available at much lower cost.

Performance review

It's been a tough year for both European stock markets and economies. Growth in major economies, like Germany, Italy and France, has slowed down. And the stock market fell 9.5% in 2018, though it's made back some of this loss so far this year. Past performance isn’t a guide to future returns.

Alexander Darwall invests in companies that aren't usually affected too much by what’s going on in the broader economy. What they offer is usually in consistent demand from consumers, and they often do something quite different because of the technology they use, which helps keep their profits up. Or if they do face challenges, they're strong enough to adapt and overcome them.

This helped the fund hold up much better than the broader European stock market over the past year. It's grown 4.7%* compared with a loss of 3.3% for the FTSE World Europe ex UK Index.

Annual percentage growth
Feb 14 -
Feb 15
Feb 15 -
Feb 16
Feb 16 -
Feb 17
Feb 17 -
Feb 18
Feb 18 -
Feb 19
Jupiter European 10.4% 9.1% 12.7% 24.4% 4.7%
FTSE World Europe ex UK 5.2% -5.2% 27.3% 12.7% -3.3%

Past performance is not a guide to the future. Source: *Lipper IM to 28/2/2019

Mowi, the world's largest salmon farmer, was one of the fund's strongest performers over the past year. It benefits from growing demand for healthy eating and, as a vertically integrated business, it stands out from the competition. This means it controls more than one stage of production, while each stage is normally done by different businesses. In this case, not only does Mowi farm salmon, it also processes, packages and distributes its own products. It also sells other related products, like seafood.

What changes have been made?

Darwall's added an investment in Hexagon to the fund. Its digital solutions are used in a variety of ways by various companies – from improving quality and productivity in manufacturing, to providing safety and security solutions. It's based in Sweden. But it carries out business across the globe and is flourishing in China. It could benefit as more businesses use technology to improve the way they do things.

Barry Callebaut, one of the world's largest cocoa producers and grinders, is also new to the fund. Darwall thinks the company could benefit as more people focus on the quality of the cocoa they buy, and where it comes from. He thinks this could also force out some smaller competitors from the market, particularly those in Asia.

Elsewhere, an investment in healthcare company Fresenius was sold. The manager thinks its German hospitals business could be affected by political intervention. And it faces challenges in the US where it operates dialysis clinics.

He also sold most of the fund's investment in Ryanair. It's suffered from a number of employee strikes and pressure from unions. It means the airline carrier's had to make a number of changes that could make it less competitive.

Overall the manager doesn't make changes to the fund often. He only invests in companies he plans to hold for the long term, rather than trying to make a quick profit from those he's less certain about. He invests in a fairly small number of companies. So each one can have a big impact on performance, though this is a higher-risk approach.

Find out more about this fund including charges

Jupiter European key investor information

Important information - Please remember the value of investments, and any income from them, can fall as well as rise so you could get back less than you invest. This article is provided to help you make your own investment decisions, it is not advice. If you are unsure of the suitability of an investment for your circumstances please seek advice. No news or research item is a personal recommendation to deal.


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