Small-Cap Growth With Value Discipline
Jupiter US Smaller Companies (LON:JUS) is a specialist small- and mid-cap fund focused on the US market. It has been managed since 2001 by Robert Siddles (as F&C US Smaller Companies until both manager and trust transferred to Jupiter Asset Management in early 2014). The manager has a strong valuation focus and seeks to invest in companies that have a good franchise, significant inside ownership, high free cash flow, pricing power and at least 50% share price upside. While US market performance has been led by large-cap and growth stocks in recent years, JUS has a solid long-term track record (annualised returns of c 7-8% over 10 years in both share price and NAV terms) and proven defensive characteristics in volatile markets.
Investment strategy: Long term and risk aware
JUS manager Robert Siddles follows a three-stage investment process, first screening for price weakness to whittle down the large (c 3,000 stocks) US small- and mid-cap universe. A five-point ‘good company test’ aims to identify stocks with low business risk and where the manager calculates at least 50% share price upside; stocks must pass all five tests for consideration. Siddles then builds detailed models on candidate stocks before making a final investment decision. The portfolio of c 50 stocks features a core of long-term ‘Buffett compounders’ as well as turnaround stocks held with a view to achieving recovery over two to three years.
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