Can you give an overview of the team running the fund and your investment process?
We are a small, seasoned team with an average of over 20 years' industry experience, and the three senior members of the team have been managing global small cap portfolios since 2010. This longstanding-collaboration fosters alignment and trust, and clarity and efficiency in decision making. We avoid forecasts and subjective opinion; rather, we apply collective judgment to hard evidence. We seek to deliver consistent, long-term investment outcomes that clients can understand and rely on.
We look for smaller companies with four characteristics:
Superior profitability and growth
Attractive relative value
Earnings estimate upgrades
Price momentum
First, we screen and rank a universe of around 5,000 smaller company stocks, including both emerging and developed markets. A stock must score well on a balance of all four characteristics to be included in the portfolio. We then undertake due diligence, with each team member reviewing and ordering a list of high-scoring stocks. We combine these individual rankings to form the basis of that quarter's trading decisions. We identify sell candidates and use cash raised from sales to invest in the best new ideas or top up existing holdings. The result is a portfolio of around 200 stocks that reflects our convictions.
What do you see as the big opportunities and risks for your fund for the rest of the year and moving into 2026? How are you positioned in this environment?
Small cap stocks have outperformed large caps over the long term.[1] They have underperformed in recent years, but we see good potential for small cap performance to return to the norm given their valuation discount vs large companies and generally supportive macro-economic conditions. We think that the depth and breadth of the global small cap universe means it could provide diversification of returns versus large caps and mega caps. Obviously, we have seen fairly extreme market concentration in the US tech names in recent years.
Small cap companies are often younger, fast-growing businesses, and they can be more volatile than larger companies. We think an actively managed, carefully selected portfolio of around 200 stocks can help to minimise risks around single-stock volatility.
Can you identify a couple of key investment opportunities you are playing at the moment in the portfolio?
We are bottom-up stock pickers. We are neutral about sectors and geographies; these tend to change as market and macro conditions change. We see a richness of opportunity in investing across such a large pool of companies, sectors and countries. The MSCI small cap index includes around 5,000 companies in 24 developed-market and 23 emerging-market countries.
In this environment, we want to stay consistent: to continue to buy great businesses, which are expected to continue being great, at attractive prices and hopefully at the right time.
Important Information
Marketing communication. This document is intended for investment professionals and is not for the use or benefit of other persons, including retail investors. The value of investments and income may go down as well as up and investors may not get back amounts originally invested. Exchange rate changes may cause the value of investments to fall as well as rise. This document is information only and is not investment advice. The views expressed are those of the author(s) at the time of preparation, are not necessarily those of Jupiter as a whole and may be subject to change. Every effort is made to ensure the accuracy of any information provided but no assurances or warranties are given. Past performance does not predict future returns. Jupiter Asset Management Limited, registered address: The Zig Zag Building, 70 Victoria Street, London, SW1E 6SQ is authorised and regulated by the Financial Conduct Authority. No part of this document may be reproduced in any manner without the prior permission of JAML.
[1] Note: MSCI ACWI Small Cap avg annual return 2001-2026 was 11.73% vs MSCI ACWI (large cap) avg annual return 9.33%. Morningstar as at 30.4.2026.
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