Jupiter trust could rally as Darwall steps back from open-ended funds

Analysts surprised as European equities star steps back from £7.7bn worth of funds

The discount on the Jupiter European Opportunities Trust could narrow as the product becomes the only pooled vehicle managed by Alexander Darwall.

The FTSE 250 fund house announced on Monday Darwall would be stepping back from two open-ended strategies totalling £7.7bn in assets.

In an analyst note published on Wednesday, Stifel said the European equity manager’s “surprise” move would benefit the trust, which currently trades at a 5% discount. It has traded in a range of a 7% discount to an 8% premium over the past year.

“We think the change is helpful for the investment trust rating as it means this is the only route for most investors to access Alexander Darwall’s investment expertise,” said the note by analysts  Iain Scouller and Anthony Stern.

However, outflows in the European and European Growth funds could force incoming manager, Mark Nichols from Columbia Threadneedle, to shed stocks, which could affect pricing on the underlying investments in all three portfolios. However, the analysts expected this to be modest given holdings are large and liquid.

Darwall has managed the investment trust since 2000. He will continue to also run his long-standing segregated institutional mandates.

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