JPMorgan European Smaller Companies Trust (LON:JESC) is managed by a dedicated, highly experienced, three-man team. The ‘best ideas’ portfolio, which generally comprises 60-80 holdings, currently numbers 63. Stocks are selected on a bottom-up basis from a universe of c 1,000 companies, which constitute the Euromoney Smaller Companies ex-UK index, the trust’s benchmark. Long-term performance has been strong, as evidenced by its 10- and 20-year NAV and share price returns, which comfortably outstrip the benchmark and the MSCI Europe ex-UK index.
Investment strategy: Bottom-up with thematic overlay
In the current environment, JESC seeks to invest in companies that can flourish, however tough macroeconomic conditions might become. JESC’s managers seek to own stocks with a blend of positive momentum, attractive valuations and indicators of quality, such as credible management, healthy balance sheets and a strong competitive position. The bottom-up stock-picking strategy is allied to a thematic overlay, with sector and country diversification ensured by the wide opportunity set, rather than by top-down constraints.
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