# Jupiter European Feeder
## Review of Portfolio as at 30 September 2020 (continued)
Policy Review (continued)
subsequently the entire holding at an average price of €130 per share. Grenke and Amadeus IT both suffered from the Covid-19 pandemic. Grenke booked a provision against a potential rise in bad debts although these were expected to rise further as Covid restrictions hurt small businesses while Amadeus IT suffered from the collapse in air travel volumes.
In terms of other changes to the portfolio, we sold Christian Hansen, Umicore, Intertrust and KWS SAAT; these were low conviction holdings which we inherited from the previous manager. Christian Hansen and Umicore were approx. 1% positions, the other two were tiny. Restructuring apart, portfolio activity was low, which is what you should expect under our stewardship. That said, we took advantage of the sharp drop in markets to open a new position in ASML. This Dutch company’s unique lithographic systems are used to make the machines used by semiconductor manufacturers worldwide. ASML also services these. It is thus a play on the secular growth of demand for microchips without being exposed to their price volatility. During the second quarter of 2020 we trimmed some diagnostics and healthcare holdings which had performed very strongly to fund a new position in DSV Panalpina whose shares had sold off because freight volumes were light; we saw this as an opportunity. DSV Panalpina is an asset-light freight forwarder supported by a sophisticated logistics technology system. Active in over 75 countries it was the strongest and the most profitable operator going into the pandemic. We would expect it to emerge even stronger as it continues to consolidate the market and its more asset-intensive competitors struggle. Towards the end of the reporting period we took part in the IPO of THG Holding, a B2B e-commerce brand building platform and subscribed to the IMCD rights issue to acquire a fast- growing, high-margin, asset-light distributor in India.
In sector terms the strongest positive contributors were healthcare and industrials while financials and consumer services were the weakest. Our zero weighting to oil & gas and telecoms contributed positively to relative outperformance. The fund tends to not invest in the latter areas as the companies are unable to differentiate themselves sufficiently to command pricing power. This leaves them poorly placed to deliver the outsized long-term returns to shareholders that we seek.

## Investment Outlook
From a global perspective, central banks have succeeded in many of their aims. Financial markets have stabilised, equity markets have swiftly recovered and the cost of borrowing money has fallen allowing the corporate sector – where needed – to raise fresh capital on a generous scale. Nevertheless, the outlook for the world economy is still highly uncertain, for example weaker companies may face financial strains and stresses in the months ahead. Nevertheless, we think there is clear scope for European equity markets to make further progress. The pandemic has not caused us to alter our investment approach, indeed, businesses making use of digital technology or involved in aspects of healthcare are doing particularly well.
In our view the companies in the fund are well placed to emerge stronger from the current crisis as weaker competitors struggle and cede market share. We retain our approach of buying and holding exceptional businesses with strong economic moats which allow them to sustain a competitive advantage. We continue to be attracted to companies with long term structural growth drivers and predictable cashflows and will apply our process to analyse and invest behind those opportunities with the aim of generating significant value for long-term shareholders.

### Mark Nichols and Mark Heslop
Fund Managers
30 September 2020
| Jupiter European Feeder |  |
| --- | --- |
| Schedule of Investments as at 30 September 2020 |
|  |  | Quantity/ Nominal | Market Value | % of |
| Investments | Currency | Value | GBP | Net Assets |
| Units of authorised UCITS or other collective investment undertaking |  |  |  |  |
| Collective Investment Schemes - UCITS |  |  |  |  |
| United Kingdom |  |  |  |  |
| Jupiter European Fund - ZM Acc EUR † | EUR | 1,591,260 | 21,958,406 | 85.94 |
| Jupiter European Fund - ZM Acc GBP † | GBP | 174,436 | 3,401,406 | 13.31 |
|  |  |  | 25,359,812 | 99.25 |
| Total Collective Investment Schemes - UCITS |  |  | 25,359,812 | 99.25 |
| Total Units of authorised UCITS or other collective investment undertakings |  |  | 25,359,812 | 99.25 |
| Total Investments |  |  | 25,359,812 | 99.25 |
| Cash |  |  | 317,605 | 1.24 |
| Other assets/(liabilities) |  |  | (125,643) | (0.49) |
| Total net assets |  |  | 25,551,774 | 100.00 |
| †  Related Party Fund |  |  |  |  |

The accompanying notes form an integral part of these financial statements.
| Jupiter European Growth |  |
| --- | --- |
| Review of Portfolio as at 30 September 2020 |
| Performance |  |  |  |
| NAV | 30 September 2020 | 30 September 2019 | % Change |
| Class A USD Acc HSC | $11.10 | $10.51 | 5.61 |
| Class C USD Acc HSC | $11.27 | $10.59 | 6.42 |
| Class D EUR A Inc Dist | €18.20 | €17.30 | 5.35+ |
| Class D EUR Acc | €19.40 | €18.41 | 5.38 |
| Class D GBP Acc | fi22.35 | fi20.64 | 8.28 |
| Class D USD Acc HSC | $21.31 | $19.95 | 6.82 |
| Class I EUR Acc | €53.09 | €50.37 | 5.40 |
| Class I JPY Acc 1 | – | JPY 9,430 | – |
| Class I JPY Acc HSC 2 | – | JPY 10,632 | – |
| Class L EUR A Inc Dist | €18.04 | €17.25 | 4.58+ |
| Class L EUR Acc | €39.86 | €38.13 | 4.54 |
| Class L GBP A Inc | fi38.16 | fi35.51 | 7.46+ |
| Class L HKD Acc HSC | HKD 129.84 | HKD 122.43 | 6.05 |
| Class L SGD Acc HSC | SGD 10.48 | SGD 9.97 | 5.12 |
| Class L USD Acc HSC | $21.75 | $20.52 | 5.99 |
| Class N USD Acc HSC | $11.04 | $10.47 | 5.44 |

Benchmark in Fund base currency FTSE World Europe Index	(6.86)
+ Performance takes into consideration dividend distributions during the year.
- Closed on 03 April 2020.
- Closed on 11 May 2020.


## Market Review
The period under review began with European equities making further progress towards the latter months of 2019 driven in part by a stabilisation in European economic survey data but mostly because the prospect of a preliminary ‘phase one’ trade deal between the US and China was in clear view. Against a background of low trading volumes and little company news, the year-end rally was supported by an election win in the UK for the Conservative party whose sizeable majority broke the deadlock over Brexit. This was seen at the time as reducing the risk that had been priced into UK and European equities. Although some of the market rise reflected the further growth in profits, shares also rose as a consequence of investors being prepared to pay more for this growth. It was therefore no surprise that European equities started 2020 strongly accompanied by a tentative stabilisation in business sentiment across the eurozone.
Things changed utterly following an outbreak of a highly infectious novel coronavirus in Wuhan just weeks before the Chinese New Year, the largest annual migration in the world. The impact of the arrival of the coronavirus on European markets unfolded in several phases. The sell-off in February of stocks with exposure to China rapidly expanded to anything linked to travel, tourism and then oil, as the OPEC price war began. As panic
mounted this soon turned into indiscriminate selling and outright capitulation in March. Evidence suggests this was exacerbated by hedge funds being forced into unwinding leveraged positions, creating extraordinary and often inexplicable moves between and within sectors.
By April, the extraordinary drop in global economic activity had become apparent as lockdown took its toll, particularly on service businesses which were even more badly affected than manufacturers. Nevertheless, global stock markets, including Europe, first stabilized and then began to recover as a result of massive economic programs of direct government assistance. Markets were spurred on by a mix of slowing Covid-19 infections and improving sentiment as countries tentatively emerged from lockdown - all underpinned by remarkable levels of stimulus from governments and global central banks. By July, EU leaders had reached a deal on a €750bn EU recovery fund which included the biggest green stimulus package in history. However, it will take at least a year before the spending starts. In the meantime, governments across Europe moved to extend furlough programmes, tax deferrals and loan moratoriums as well as considering taking stakes in small and medium-sized businesses to prevent a cascade of bankruptcies. Over the following months, equity markets rallied as investors began to hope the worst of the pandemic might have passed as infection rates slowed,

Translation (ENFR, 2020-09-30):
# Jupiter European Feeder
## Analyse du Portefeuille au 30 septembre 2020 (suite)
Analyse de la politique d'investissement (suite)
de la participation par la suite à un prix moyen de 130 EUR par action. Grenke et Amadeus IT ont souffert l'un comme l'autre de la pandémie de Covid-19. Grenke a constitué une réserve contre la hausse potentielle de ses créances douteuses bien qu'elles risquent d'augmenter encore face aux répercussions des restrictions de la pandémie sur les PME et Amadeus IT a souffert de l'effondrement des volumes de trafic aérien.
Concernant les autres changements du portefeuille, nous avons cédé Christian Hansen, Umicore, Intertrust et KWS SAAT, hérités du précé- dent gestionnaire et qui n'emportaient pas notre conviction. Christian Hansene et Umicore représentaient chacun 1 % du portefeuille, les deux autres étaient de minuscules positions. En dehors de la restructu- ration entreprise, l'activité du portefeuille a été réduite, ce qui est à attendre pendant notre mandat. Ceci étant dit, nous avons profité du lourd repli des marchés pour prendre une nouvelle position dans ASML. Les systèmes photolithographiques uniques de cette société néerlandaise sont utilisés pour fabriquer des machines destinées aux fabricants de semiconducteurs dans le monde entier. ASML assure également le service de ces machines. Cette société est donc une manière pour nous de jouer sur la croissance régulière de la demande de microprocesseurs sans nous exposer à la volatilité de leurs prix. Au cours du deuxième trimestre 2020, nous avons réduit certaines posi- tions dans les diagnostics et la santé qui avaient enregistré des perfor- mances très élevées pour financer une nouvelle position dans DSV Panalpina dont les actions avaient connu un mouvement de liquida- tion au vu du manque de dynamisme des volumes de fret ; nous avons donc décidé de saisir l'opportunité. DSV Panalpina est un transporteur de fret peu capitalistique qui s'appuie sur un système technologique logistique de pointe. Présent dans plus de 75 pays, c'est l'opérateur le plus puissant et le plus rentable à l'heure de la pandémie. Nous tablons sur un renforcement de sa prédominance à mesure de sa consolida- tion continue du marché et à la vue de la mauvaise passe de ses concurrents plus capitalistiques. En fin de période considérée, nous avons pris part à l'introduction en Bourse de THG Holding, une plate- forme de commerce électronique B2B, et avons souscrit à l'émission de droits d'IMCD pour acquérir un distributeur indien peu capitalis- tique et à forte marge, en pleine croissance.
Sur un plan sectoriel, les plus fortes contributions positives ont été la santé et l'industrie tandis que la finance et les services de consomma- tion ont fait office de lanterne rouge. La pondération nulle des sec- teurs du pétrole et du gaz ainsi que des télécommunications dans le portefeuille a servi sa surperformance relative. Le fonds tend à ne pas investir dans ces secteurs du fait d'une incapacité de leurs acteurs à se différencier suffisamment pour pouvoir disposer d'un pouvoir de fixa- tion des prix. Ils sont ainsi mal placés pour fournir à leurs actionnaires les rendements démesurés à long terme que nous recherchons.

## Perspectives d’investissement
Dans une perspective globale, les banques centrales sont parvenues à leurs fins à bien des titres. Les marchés financiers se sont stabilisés, les marchés d'actions ont vite repris et les coûts d'emprunt ont chuté, ce qui a permis aux entreprises d'obtenir des levées généreuses de capi- taux frais lorsqu'elles en avaient besoin. Les perspectives économiques mondiales n'en restent pas moins très incertaines et les entreprises les plus fragilisées pourraient traverser bien des épreuves et subir des ten- sions au plan financier dans les mois à venir. Nous pensons néanmoins que les marchés d'actions européens ont clairement une carte à jouer dans la poursuite de leur progression. La pandémie ne nous a pas fait modifier notre approche d'investissement car les entreprises qui se servent des technologies digitales ou qui sont impliquées dans les dif- férents segments de la santé s'en tirent particulièrement bien.
Selon nous, les sociétés du fonds sont bien placées pour ressortir plus fortes de la crise actuelle au détriment de leurs concurrents affaiblis qui leur ouvrent la voie à la conquête de nouvelles parts de marché. Nous maintenons notre approche d'achat et de conservation de valeurs de qualité exceptionnelle qui ont creusé de véritables fossés économiques qui leur assurent un atout concurrentiel durable. Nous restons attirés par des sociétés aux moteurs de croissance structurelle à long terme et aux flux de trésorerie prévisibles et nous appliquerons notre processus pour analyser et investir dans ces opportunités dans le but de générer une valeur significative pour les actionnaires à long terme.
Mark Nichols et Mark Heslop
Gestionnaires du compartiment 30 septembre 2020
| Jupiter European Feeder |  |
| --- | --- |
| Liste des placements en date du 30 septembre 2020 |
|  |  | Quantité/ Valeur | Valeur Marché | % de |
| Investissements | Devise | nominale | GBP | l’actif net |
| Parts d’OPCVM autorisés ou autres organismes de placement collectif |  |  |  |  |
| Organismes de placement collectif – OPCVM |  |  |  |  |
| Royaume-Uni |  |  |  |  |
| Jupiter European Fund - ZM Acc EUR † | EUR | 1 591 260 | 21 958 406 | 85,94 |
| Jupiter European Fund - ZM Acc GBP † | GBP | 174 436 | 3 401 406 | 13,31 |
|  |  |  | 25 359 812 | 99,25 |
| Total Organismes de placement collectif - OPCVM |  |  | 25 359 812 | 99,25 |
| Total parts d’OPCVM autorisés ou autres organismes de placement collectif |  |  | 25 359 812 | 99,25 |
| Total Investissements |  |  | 25 359 812 | 99,25 |
| Espèces |  |  | 317 605 | 1,24 |
| Autres actifs/(passifs) |  |  | (125 643) | (0,49) |
| Total de l’actif net |  |  | 25 551 774 | 100,00 |
| †  Compartiment d’une partie liée |  |  |  |  |

Les notes annexes font partie intégrante des présents états financiers.