JPMorgan US Smaller Companies Investment Trust (JUSC) aims to provide investors with capital growth through a portfolio of US smaller companies. JUSC is actively managed, with Don San Jose as the lead manager, supported by portfolio managers Dan Percella and Jon Brachle. The team take a purely bottom-up approach to investing, searching for high-quality businesses with strong management teams. They will not, however, overlook the price they are paying, and a great deal of emphasis is placed on finding these companies at fair valuations. Currently the portfolio is comprised of 85 companies, and there is a clear tilt towards the larger end of the small-cap universe. The largest sector overweights come from producer durables and materials & processing. We understand, however, that the portfolio is more defensive than one might anticipate from looking purely on a sectoral basis. JUSC has an exceptional track record relative to both peers and the benchmark Russell 2000 Index, outperforming in eight of the past nine years. In fact, the managers stand out for their alpha generation relative to peers in both the AIC North American sectors (i.e. large-cap and small-cap) while still maintaining a low beta of 0.91 over the past five years to date (22 January 2020). We discuss this in more detail in the Performance section. The trust is currently trading at a premium of 2.3%, in comparison to its one year average discount of 2.9%.
