June 12, 2006
Winslow and Jupiter Launch Global Green Fund Using Only Positive Environmental Criteria
by Bill Baue
The Jupiter Green Investment Trust pioneers cross-continent collaboration and evolution from
negative screening to positive sustainability criteria.
Boston-based Winslow Management Company
and the socially responsible investing (SRI) team at London-based Jupiter Investment Management are joining forces to
launch the Jupiter Green
Investment Trust (ticker: JGC), a global fund that breaks new ground in several ways.
First, such a cross-continent collaboration itself is novel, with Winslow managing North American
assets (30 percent of the portfolio) and Jupiter managing the remaining 70 percent of the portfolio
invested in companies in the rest of the world. And second, the investment trust focuses
exclusively on positive criteria in six environmental themes (clean energy, green transport,
environmental services, sustainable living, waste management, and water management), without
employing negative or best-in-class screening.
"Nobody has been able to provide me
with an example of this kind of collaboration--certainly within the SRI field it is unique, and in
the mainstream field, it is quite unusual," said Emma Howard Boyd, head of Jupiter's SRI and
"We haven't seen anything like it before, but it's hard to say why--it seems like such a
logical way to manage money by using people in their local markets for their expertise," added Matt
Patsky, portfolio manager for the top-performing Winslow Green Growth Fund (WGGFX), who is handling
management for Winslow's portion of the investment trust.
Charlie Thomas, portfolio
manager for the Jupiter Ecology
Fund (also a top performer and also a user of the six green themes), is managing Jupiter's
portion. Mr. Thomas also managed the legacy portfolio, the Jupiter Global Green Investment Trust,
which served as the point of connection between Winslow and Jupiter.
"We've had a long and
close working relationship with Winslow since 1990, when Winslow founder Jack Robinson joined the
board of one of our other investment trusts," Ms. Boyd told SocialFunds.com. "The Jupiter Green
Investment Trust is a rollover vehicle for the Jupiter Global Green Investment Trust, whose life
came to an end in May, and it was through restructuring that fund that we decided to launch a new
vehicle that moved the investment criteria themes along."
One of the largest holdings in
the Jupiter Global Green Investment Trust was the Winslow Green Growth Fund, illustrating Jupiter's
confidence in the Winslow style. The new investment trust will not hold the Winslow Green Growth
Fund because it employs some negative screens, which the new fund moves away from completely.
"Instead of screening companies out for what they're doing negatively, we're screening
companies in for what they're doing positively," Mr. Patsky told SocialFunds.com, pointing
out that this obviates the need for shareholder activism. "We believe this is where the SRI world
should be moving--we are beyond the point of lacking companies that pass our screens, so we should
now be looking at picking the best opportunities with the best solutions, focusing on performance."
"The fact that we're not screening out anything creates some interesting questions,
such as, 'do you have a screen against nuclear?' and the answer is, 'no,'" Mr. Patsky said.
"If we were to find an incredible advance in the treatment of nuclear waste, it might create an
opportunity that we would consider investing in--but we are not likely to get into anything that is
producing nuclear power because of our small- and mid-cap nature."
The Jupiter Green
Investment Trust similarly has a bias toward small- and mid-cap pure plays focused on environmental
solutions, though it does not preclude holding large-cap companies that are leaders in the green
Ms. Boyd points out that the Henderson
Industries of the Future Fund similarly focuses on positive sustainability themes (ten as
opposed to Jupiter's six), though it additionally employs negative screens. Closer comparisons
would be the Merrill
Lynch New Energy Technology Fund (MNE) and the Impax Environmental Markets Fund (IEM), both investment trusts like the Jupiter product, but unlike
the Jupiter fund with its six green themes, Merrill Lynch focuses on just one (clean energy) and
Impax on three (clean energy, water, and waste.)
Investment trusts differ from mutual
funds in that they trade like companies on stock exchanges and are closed-ended, meaning they only
issue a set blocks of shares, whereas mutual funds take on investors on an on-going basis. The
Jupiter Green Investment Trust launched on the London Stock Exchange (LSE) last Thursday.
"Investors are already
in the money, with the average investor up now between three and four percent--not a bad return for
two days, especially since the markets have been in a tailspin," said Mr. Patsky. "This
demonstrates investor confidence in the themes we've laid out."
Jupiter and Winslow both
have a very strong track record performance-wise. The Jupiter Ecology Fund has generated one-year
returns of 27.8 percent as of June 9 to rank in the top 15 percent of its global equity
small/mid-cap category, according to Morningstar. Its three-year annualized returns of 22.8 percent
placed it in the top 30 percent.
The Winslow Green Growth Fund has generated 38.56
percent one-year returns and 26.72 percent three-year annualized returns as of May 31 to rank in
the first percentile in its category during both time periods, according to Thomson Financial Network. The Wall Street Journal listed it as the number
one small-cap growth fund in America on a one-year return basis as of March 31, April 30, and May
31, based on data from Lipper.
While the fund is offered in the UK market, Mr. Patsky points out that Winslow was already
fielding inquiries from its investors based in the US about creating a global green fund.
"The Jupiter Green Investment Trust isn't our solution to meeting that need--we are working on
something else that's US-based, because we think there's an opportunity in the US market," Mr.