JPMorgan (NYSE:JPM) European Smaller Companies Trust (LON:JESC) is a relatively concentrated portfolio of 60-80 stocks offering the potential for capital growth. The fund has well-established managers: Jim Campbell since 1995 and Franceso Conte since 1998, who draw on their experience to select high-quality companies with strong management teams, with positive stock price and earnings momentum, that they perceive to be undervalued. JESC has outperformed its benchmark over both short- and long-term periods and over 20 years has outperformed its nearest peer by 410pp.
Investment strategy: Quality, momentum and value
The managers, working within the wider J.P. Morgan Asset Management European equity team, select a portfolio of European smaller companies with potential for capital appreciation, aiming to outperform the benchmark Euromoney Smaller European Companies ex-UK index. The fund is actively managed leading to relatively high portfolio turnover and, although diversified by country and sector, exposure can diverge meaningfully from the benchmark. Frequent meetings with existing and potential portfolio companies are an important part of the process. Liquidity and gearing is actively managed; a range of 20% gearing to 20% net cash is permitted.
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