JPMorgan European Discovery Trust - A balanced trust targeting a world-beating market

JPMorgan European Discovery Trust (JEDT) invests in European small-cap companies (excluding UK), with the aim of providing shareholders with long term capital growth. The investment case for this sector is clear and simple. European small caps have outperformed most other markets over the long term. JEDT’s disappointing performance during H122 prompted its managers to rotate out of high-growth IT software and medtech stocks, in favour of a more balanced approach focused on quality and value name

JPMorgan European Discovery

JEDT offers core European smaller companies exposure with an adaptable and flexible investment approach, possibly suited to a changing investment landscape…

JPMorgan European Discovery Trust - Becoming more stylistically balanced

JPMorgan European Discovery Trust (JEDT) specialises in continental European small and mid-caps. The strength of the strategy is that while it is actively managed, it is also stylistically more balanced than many funds in the sector and of late there has been a nuanced move to more ‘core’ and ‘value’ holdings and a reduction in ‘growth’ stocks. Performance over the year to the end of June 2022 was weaker than the index, but slightly ahead of the AIC European smaller companies peer group. This wa

JPMorgan European Discovery

JPMorgan European Discovery (JEDT) offers investors a portfolio of high-quality European small- and mid-cap equities. JEDT’s managers, Francesco Conte and Edward Greaves, have created a portfolio which not only demonstrates better quality metrics but also superior valuations and earnings momentum than the wider market. All three aspects are important outcomes of the team’s investment process.

JPMorgan European Discovery Trust - A core option within a niche market

JPMorgan European Discovery Trust (JEDT) aims to generate long-term capital growth from a portfolio of high-quality, reasonably valued, smaller European equities. The scale of opportunities in a relatively inefficient market gives active managers an excellent opportunity set for outperforming and delivering good long-term investor returns, and JEDT has a strong long-term investment track record but has been a little more challenged of late. The trust currently offers a 1.7% dividend yield.

What next for European equities?

Despite Europe’s popularity among holidaymakers, it appears that investors prefer sunnier shores. According to The Investment Association, UK investors were net sellers of European equities in 2018, 2019 and 2020. Historically low returns from European equity markets (compared to other regions) and low GDP growth seem to have soured investors’ moods. In this article we will examine the AIC Europe and AIC European Smaller Companies sectors over the last 12 months, to see whether this pessimism is

JPMorgan European Discovery - Overview

JPMorgan European Discovery Trust (JEDT) offers investors a portfolio of small- and mid-cap companies across developed Europe (excluding the UK), following a balanced process that can invest in both expensive growth and cheap recovery companies. JEDT has recently changed its name, and was known as JPMorgan European Smaller Companies Trust until June 2021. The new name is intended to better reflect the trust’s investment strategy and portfolio, as it can invest across the European small- and mid-

Eurovision 2021

Europe, despite its intention to put past crises to rest, may end up being a major economic flashpoint in 2021. With sudden developments in Italian politics, battles over vaccinations and bonds that guarantee a loss, investors may be forgiven for expecting the once benign region to be the next big source of volatility. Yet there is an equal argument for a European renaissance with pan-European stimulus, attractively valued equities and increasing demand for sustainable investing; the argument is

JPMorgan European Smaller Companies - Overview

JPMorgan European Smaller Companies Trust (JESC) offers investors a diversified portfolio of developed European (ex UK) smaller companies. JESC’s portfolio is constructed using a structured, bottom-up investment process. Managers Francesco Conte and Edward Greaves utilise a three-factor process when constructing JESC’s portfolio, aiming to balance value, momentum and quality factors (as we outline in the Portfolio section). The investment process is an adaptive one, with the managers willing to

Now that's what I call a discount!

The accelerant effect of a closing discount adds considerable appeal to investment trusts for many investors, boosting the impact of a rising net asset value (NAV) when it happens concurrently, and leaving the shareholder with what is a de facto ‘geared’ return. Identifying trusts which are trading in a discount to NAV which is likely to close is no mean feat, though, with more than 450 investment trusts to choose from – and typical discounts among conventional trusts around the 10% mark. Last w

JPMorgan European Smaller Companies - Overview

JPMorgan European Smaller Companies (JESC) aims to provide capital growth from a portfolio of smaller companies in developed Europe, excluding the UK. Francesco Conte and Edward Greaves run the £654m trust, searching for attractively valued, high-quality stocks with positive momentum which they believe can outperform the market. The managers believe that Europe offers a unique mix of companies, in particular a number which are disrupting industries with nimble business models. Three key themes

JPMorgan European Smaller Companies - Overview

JPMorgan European Smaller Companies (JESC) aims to provide capital growth from a portfolio of smaller companies in developed Europe, excluding the UK. The £700m trust (in net asset terms), is managed by Francesco Conte and Edward Greaves who have a unique approach to narrowing down their 1000+ universe of companies, using a combination of qualitative and quantitative methods. The managers’ analysis helps them recognise and compare three key characteristics for new investment ideas: quality, mo

Nothing compares to EU

As with most people, we are sick of discussing Brexit’s endless possible scenarios and how it might impact equity markets. The outlook is forever shifting, the large majority of “information” being pure conjecture. Nevertheless, the political and economic backdrop means that Europe is now one of the most out of favour investment regions. In the open ended IA sector, Q3 and Q4 of last year saw total outflows of -£1.6bn in Europe, relative to the US and Global sectors which saw inflows of £289m an

JPMorgan European Smaller Companies - Overview

JPMorgan European Smaller Companies (JESC) aims to provide capital growth from a diversified portfolio of smaller companies in developed Europe, excluding the UK. The £667m trust (in net asset terms), is managed by Francesco Conte and Edward Greaves and utilises a high-conviction, bottom up, stock picking approach. The team focus on three key characteristics when conducting fundamental analysis on new investment ideas; quality, momentum and value. Companies they select do not need to score well

Morning Note – 22 April 2024

Benefits of scale set to materialise

Frenkel Topping - Resilient with strong growth potential

FY 2023 was a challenging year for Frenkel with higher interest rates encouraging clients to place money into lower margin money market funds. Despite this, sales grew +32% (supported by recurring revenue +9% and +51% in non-recurring), EBIT margins remained strong at 22% and adj. EPS grew +17% (taking into account the higher number of shares). FY 2024 has seen a solid start to transactional business and there is a strong pipeline of new FUM opportunities both of which support further growth. Wi

Bluefield Solar Income Fund – Fundamentals shine despite discount

The manger comments that, in common with the other trusts in the renewable energy sector, the last six months have continued what has been a challenging period for the Bluefield Solar Income Fund (BSIF). It adds that the trust’s ongoing fundamental performance has failed to reverse a steady slide in its share price which began back in May 2023. Despite this, it says the company has continued to deliver solid NAV growth and market-leading shareholder distributions thanks to a range of contractual

LSL Property Services (LSL LN) - Transformation & market recovery

2023 results are, as indicated in its February pre-close update, “slightly ahead of market expectations”. Current trading continues to improve, with 1Q24 underlying operating profit up yoy, “reflecting the benefits of the Group’s transformation programme completed in 2023 as well as improving market conditions.” With net cash of £35m at end 2023, the Board approved 7.4p final DPS and £7m buy back.

S&U - PBT ahead, encouraging volume trends

S&U reported FY24 PBT of £33.6m, down from £41.4m in FY23 on higher funding and regulatory costs and higher impairments in Advantage in H2. PBT was 2% ahead of our forecast as stronger revenues – up 12% to £115.4m – and better costs offset higher-than-expected impairments. Net receivables grew to a record at both Advantage and Aspen and management noted particular strength in Q4 and a good trading environment in the current year. Having absorbed a significant rise in funding cost as well as addi

Hardman & Co Insight: 2023 was an annus horribilis for Quoted UK Infrastructure and Renewable Energy

The focus of Hardman & Co Research is on the nine quoted Infrastructure Investment Companies (IICs) and on the 22 Renewable Energy Infrastructure Funds (REIFs): the stocks analysed are all members of the Association of Investment Companies (AIC). We are updating our publication of January 2023, assessing both the lacklustre share price performances during 2023 and the key issues, including interest rates, inflation and power prices. As a 31-strong group, its combined market capitalisation is no

Foresight Solar Fund - Termination of coverage

Edison Investment Research is terminating coverage on ABC Arbitrage (ABCA), paragon (PGN), Foresight Solar Fund (FSFL), Kendrion (KENDR), Lithium Power International (LPI), Triple Point Energy Transition (TENT), 4iG (4IG), e-therapeutics (ETX), Pharnext (ALPHA) and Shield Therapeutics (STX). Please note you should no longer rely on any previous research or estimates for this company. All forecasts should now be considered redundant. Previously published reports can still be accessed via our web

LIBERUM: PensionBee: Strong start to the new financial year

International Public Partnerships - Consistently and responsibly delivering

International Public Partnerships’ (INPP’s) FY23 results show that it continues to deliver consistent and predictable returns for investors, while delivering environmental and social benefits for the individuals and communities that are served by its assets. Despite this strong performance and a substantial need for private infrastructure funding, the macroeconomic environment has weighed on INPP’s share price, in common with the wider sector. Regardless, attractive returns are available from th

LIBERUM: NewRiver: Q4 trading update: Continued operational momentum

Regional REIT - Performing as expected ahead of refinancing

In a challenging market, Regional REIT’s (RGL’s) FY23 operational and financial performance was robust, in line with expectations and previous guidance. Investor focus remains on the company’s loan to value (LTV) reduction and bond refinancing plans, explored in detail in our previous note and RGL will provide an update on this in due course.

Witan

Business as usual for WTAN’s executive team, while the board reviews investment management arrangements…

LIBERUM: PayPoint: On track for £100m of EBITDA in FY 26

LIBERUM: Speedy Hire: Weakness in FY 24 but recovery in FY 25