Investing in European smaller companies: JEDT plc outperforms benchmark

Month in review as of 30/06/2022

  • JPMorgan European Discovery Trust plc (LON:JEDT) outperformed its benchmark in June.
  • Positive contributors to relative returns included stock selection in real estate investment and services development and an overweight position in non-life insurance.
  • Detractors included stock selection and an overweight position in electronic & electrical equipment and not holding banks.
  • At a stock level, an overweight position in Ipsos, a French market research company, outperformed as demand for market insights continued unabated.
  • An overweight position in Helvetia Holding, a Swiss insurance company, outperformed as increasing interest rates were a tailwind to the sector’s earnings.
  • On the other hand, an overweight position in Nexans, a French cable manufacturer, detracted from performance as the economic slowdown could impact demand from the construction sector.
  • An overweight position in TKH Group, a Belgian industrial holding, detracted from performance as the economic slowdown was a headwind to its earnings.

Looking ahead as of 30/06/2022

  • Concerns around inflation remain at the centre of market volatility. The recent weakness in consumer sentiment could translate into sluggish consumer spending, affecting wholesale and retail sales in the months ahead.
  • While a recession might not be deep, weakness in the economy could linger and a sluggish economic recovery would erode inflation pressures and wage growth. If the post-pandemic surge in demand fades and higher prices start to deter new spending, central banks may adopt a more gradual policy normalisation, compared with the hawkish rhetoric seen in the first half of 2022.
  • While short-term risks remain, equity markets have already repriced significantly this year, reflecting some risks of a recession. While we would not be surprised to see a few occasional bouts of volatility, we believe equity markets could now offer an attractive entry point to the long-term investor.

JPMorgan European Discovery Trust plc (LON:JEDT) is an investment trust company. The Investment Trust JEDT objective is to achieve capital growth from a portfolio of quoted smaller companies in Europe, excluding the United Kingdom.

Click to view all articles for the EPIC:
Or click to view the full company profile:
Facebook
Twitter
LinkedIn
JPMorgan European Discovery Trust

More articles like this

JPMorgan European Discovery Trust

European markets rise as investors await US inflation data

European markets experienced a modest uptick on Wednesday as global investors turned their attention to the impending release of the latest U.S. inflation figures. By 11:40 a.m. London time, the pan-European Stoxx 600 index had risen

JPMorgan European Discovery Trust

Improving European economy outlook

‘The low growth outlook for Europe will improve as soon as the ECB cuts interest rates. Inflation in Europe has fallen more sharply than in the US; this means that the conditions for a rate cut

JPMorgan European Discovery Trust

Are European stocks more affordable than US Equities?

Analysts concur that European stocks are notably more affordable than U.S. equities. For instance, the stocks in the Stoxx Europe 600 are valued at 14 times earnings, while those in the S&P 500 trade at 25 times annual

JPMorgan European Discovery Trust

Europe stocks kick off Q2 higher

European stocks kicked off the second quarter slightly higher, with focus on a string of economic data points including inflation data from Germany that could provide clarity on the timing for interest rate cuts by the

JPMorgan European Discovery Trust

European stock markets rise ahead of key inflation data

Europe’s major stock markets opened higher Monday ahead of key eurozone inflation data, and at the start of a busy week for global central banks. In initial trade, London’s benchmark FTSE 100 index of leading companies