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Investment trust insider on Jupiter US Smaller Cos

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Investment trust insider on Jupiter US Smaller Cos – James Carthew: Robert Siddles is hard act for JUS to replace

The announcement last week of Robert Siddles’ plans to retire early next year as manager of Jupiter US Smaller Companies (JUS) took me by surprise. Siddles took on the investment trust in 2001 and has run it for almost 20 years. He is one of a surprisingly large number of investment trust managers with even longer tenure. By my reckoning, there are 27.

This speaks to the emphasis on long-term thinking within the investment company sector. It might also reflect that boards are more likely to be patient with a fund manager going through a period of poor relative performance than the bosses of a manager of an open-ended fund whose investors are redeeming their units.

JUS followed Siddles when he moved from F&C Investments (now BMO Global Asset Management) to Jupiter in 2014. It is not a big trust, with a market value of just £128m, and it trades on a discount of 11.6%, which is quite a bit wider than the discount on JPMorgan US Smaller Companies (JUSC), its closest competitor.

Siddles is a stock picker and has a large universe of companies from which to choose. His definition of ‘small’ ranges from companies with a market capitalisation of $100m up to $10bn and that encompasses more than 2,600 companies. From these he constructs a fairly concentrated portfolio of about 40 stocks.

I didn’t want to write another article about value versus growth but I’m afraid that it is the dominant factor affecting the performance of most equity trusts at the moment. Siddles is a value fund manager, albeit one with a strong emphasis on capital preservation. He is trying to buy growing companies but at prices that offer limited downside risk.

His underlying theory is… read more here