Fund Research

JPMorgan European Smaller Companies

Last update 26 November 2018
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JPMorgan European Smaller Companies is a client of Kepler Trust Intelligence. Material produced by Kepler Trust Intelligence should be considered as factual information only and not an indication as to the desirability or appropriateness of investing in the security discussed.

Please see the important information by following this link or at the bottom of the page.

JPMorgan European Smaller Companies investment trust aims to provide capital growth from a diversified portfolio of smaller companies in developed Europe, excluding the UK. It is managed through a high-conviction, stockpicking approach which has delivered impressive results over the 20 years that Francesco Conte has been at the helm. The trust is comfortably the largest and is one of the most liquid in the AIC European Smaller Companies sector, with a market cap of close to £600m.

Fund managers Francesco Conte and Edward Greaves have consistently delivered high levels of alpha over one, three and five years. In comparison to the much larger IA Europe ex UK sector, the trust sits in the middle of the pack in alpha and returns over the short and long term.

Bucking their historic trend, the managers have outperformed in the current period of volatility in markets. YTD, the trust is outperforming the benchmark and its IA and AIC peers thanks to Francesco and Edward having aggressively shifted the portfolio towards a more defensive stance during the summer.

Overall, the managers remain benchmark agnostic, with sector and regional allocation driven by their stockpicking. The managers search for three key characteristics among companies; quality, momentum and value. Holdings often move from the value category to the momentum category but must be considered “good quality” throughout. Last summer, the managers moved away from cyclical stocks and shifted to a more defensive positioning. This now means that pharmaceuticals (+6.4%), oil equipment, services and distribution (+5.2%) and health care equipment and services (4.8%) are the largest overweights within the portfolio. At a stock level they are invested in companies that are macro-agnostic, and less dependent on overall country GDP.

The trust saw its discount narrow during 2017 but so far in 2018 the discount has widened significantly from -5.7% on the 1st of January to -13.5% on the 12th of November. This movement echoes the entire AIC European Smallers sector, where the current average is -11.2%, and reflects troubled sentiment toward the region as a whole. Looking past short term noise, however, the managers are positive about the outlook, and see plenty of exciting opportunities in European markets.

William Sobczak

Important information

JPMorgan European Smaller Companies is a client of Kepler Trust Intelligence. Material produced by Kepler Trust Intelligence should be considered as factual information only and not an indication as to the desirability or appropriateness of investing in the security discussed.

Please see the important information by following this link or at the bottom of the page.

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Fund History: JPMorgan European Smaller Companies

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