Invest in European small caps: JPMorgan JEDT’s hidden gems

JPMorgan European Discovery Trust plc (LON:JEDT) has announced their ten largest investments in % of total assets as at 31 July 2023.

Sanlorenzo2.8%
Alten2.7%
SPIE2.5%
CTS EVENTIM2.4%
SEB2.3%
Vopak2.2%
Verallia2.2%
Thule Group2.1%
Bravida2.1%
TechnoGYM1.9%
Total23.0%
Excludes Investments in Liquidity stocks

JEDT’s portfolio managers Francesco Conte and Edward Greaves noted in their latest July commentary on the future outlook:

“While corporate profits have held up well so far after an extraordinary surge in 2021, margins are now starting to decline for many companies, and we expect weaker profits this year. Increased caution among lenders and slowing corporate profits could constrain capital expenditure.

Recent data points suggest that inflation has likely peaked and is gradually falling to more manageable levels. As inflation pressures subside and fading business and consumer spending pose risks to the global outlook, central banks may have to reverse course and set the stage for a new multi-year period of lower long-term interest rates.

Against this backdrop, we would caution against positioning portfolios with too much concentration in any single equity region. Our highest conviction view is that markets will reward companies with stronger quality credentials, such as robust balance sheets and management teams with deep experience through multiple cycles.”

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.

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