Jupiter Global/Primadona Changing to UK All Companies-Is there a future for smaller trusts?


Jupiter Global (JPG - previously Primadona) is planning to switch investment strategy and category from Global Growth to UK All Companies.

The manager will also change to Steve Davies who currently manages the Jupiter UK Growth unit trust. The managers are concerned about the ability of the trust to grow and its active discount policy has shrunk the trust and it is now on the small side (~£50m).

I’ve held this trust for years and quite like its mix of UK equities with other trusts/funds to get regional exposure, though performance has been somewhat middle of the road.

Given the number of other good performers in the UK All Companies sector like JP Morgan Midcap, Keystone and Fidelity Special Values - I’m tempted to switch out.

It seems to be quite an active period for trusts changing sectors or managers, and it looks like smaller trusts are struggling with the new emphasis on costs.


I think that the types of trust that are likely to survive are those that offer exposure to niche areas of the market, and those that have substantial family interest. However, the former does assume that the exposure is desirable to enough investors and - probably - small enough to be off the radar of arbitrageurs who might otherwise buy in at a discount and then try to get the trust wound up, or something along those lines.

As to the future for JPG, then the questions that spring to mind are: how will the new investment strategy differentiate it from its future peers, and what is wrong with the current strategy?

The first might be in the fact that the UT has a concentrated number of holdings, currently 41, which - as fas as I can tell - is not so different to the number of individual shareholdings in the IT once the fund holdings are removed. So there might be some potential here.

The second question can itself be split into two, the first part of which has been already answered by the Board: namely, that the current strategy is no longer attracting sufficient interest from investors and that this is leading to the wide discount. However, the second part of this question - the near-zero discount control policy - is not being addressed, yet this has is a major contributing factor to the shrinkage to the net asset base. This then begs the question, if this policy is to continue then how can investors be confident that the trust’s assets won’t continue to shrink in order to buy back shares?