Fund of the week: A steady, green, profit machine
Jan 22, 2010
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It used to be cool to be on the climate change bandwagon. These days, it's the sceptics who are in fashion. But Charlie Thomas, manager of the Jupiter Ecology Fund, isn't fretting. His fund, which looks for companies providing the solutions to environmental issues, hasn't changed its strategy in 22 years. And up 54% in five years against a 36.9% return for the FTSE World, it isn't about to do so.
Two core environmental themes are the ones to watch right now, says Thomas: China and waste recycling. Thanks to increasing regulatory requirements that involve alternative energy (such as wind power), there are a lot of opportunities emerging in China. Late last year, for example, Thomas bought into China Long Yuan's initial public offering. It's the fifth largest renewable energy company in the world. And if it maintains its current growth trajectory, it should be the second largest within a few years, he says.
Meanwhile, at the other end of the spectrum, he believes that increasing commodity prices are acting as a kicker for companies to reduce the amount of waste they send to landfill. "We're moving to a crossover point where it will be cheaper to recycle than to send waste to landfill." So Republic Services, one of North America's largest waste management companies, is also a significant holding.
Thomas holds on to individual stocks for three to five years and picks firms based on three principles. First, do they offer a leading technology or service? Second, can management deliver on growth? Third, is the company making money? In short "we don't buy into something that will be a wonderful theme in ten years' time. It has to be in profit now."
Contact: 020-7314 7600.
Jupiter Ecology Fund top ten holdings
| Name of holding | % of assets |
|---|
| Cranswick |
3.00 |
| Vestas Wind Systems |
2.88 |
| United Natural Foods inc |
2.65 |
| Firstgroup |
2.55 |
| Republic Services Inc |
2.45 |
| East Japan Railway Co |
2.27 |
| Itron Inc |
2.14 |
| Yamatake Corp |
2.10 |
| Stantec Inc |
2.03 |
| Venezuela (Republic of) 9.25% BD 07/05/28 |
2.8 |
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