JPMorgan European Discovery Trust outperformance & future earnings growth in July review (LON: JEDT)

Katie Standley, Managing Director, at J.P. Morgan Asset Management, commented on the July performance of the trust and the economic outlook as the recovery continues to take shape in 2021:

Month in review

The trust outperformed its benchmark in July.

Positive contributors to relative returns included stock selection as well as sector overweight positions in software & computer services and medical equipment & services.

Detractors included stock selection as well as sector overweight positions in construction & materials and electronic & electrical equipment.

At a stock level, an overweight position in D’Ieteren Group, the Belgian auto distribution and vehicle glass repair company, contributed positively to returns after the company announced the acquisition of a stake in TVH Parts, and after they sold a stake in their glass-repair company for a higher-than-expected valuation.

Our overweight position in Eckert & Ziegler, the German manufacturer of low-level radiation equipment for the pharmaceutical industry, also contributed positively to performance after the company reported stronger-than-expected half-year earnings and upgraded its full-year outlook.

On the other hand, our overweight position in Scatec, the Norwegian renewable energy producer, contributed negatively due to an unexpected drop in its power production in the Philippines.

An overweight position in Signify, the Dutch manufacturer of lighting products, contributed negatively because its recent growth has been hampered by chip shortages.

Looking ahead

Earnings growth should be strong in 2021, but could slow as profit margins come under pressure next year from higher wages, rising commodity prices and increasing corporate taxes. However, for now, a combination of booming demand and surging productivity continues to bolster profits.

The reaction from central banks on potential further upside surprises on inflation and economic growth will be a key development to watch out for in the coming months.

It is crucial to differentiate cyclical from structural headwinds and tailwinds as the recovery takes shape in 2021.

Although valuations in aggregate are high, the gap between the cheapest and most expensive stocks remains very wide – suggesting plenty of opportunities for stock selection.

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:
Share on facebook
Facebook
Share on twitter
Twitter
Share on linkedin
LinkedIn
JPMorgan European Discovery Trust

More articles like this

JPMorgan European Discovery Trust

Nexans makes game-changing step connecting French and Irish grids

Nexans has been awarded the contract for the Celtic Interconnector developed jointly by the Irish and French Transmission System Operators (EirGrid and RTE – Réseau de Transport d’Electricité). This 700 MW capacity project is the world longest XLPE interconnector to be built

JPMorgan European Discovery Trust

Nexans signs agreement to acquire Reka Cables from Reka Industrial

Nexans SA announced today that it has entered into a Share Purchase Agreement with Reka Industrial Plc to acquire Reka Cables. This acquisition will strengthen Nexans’ position in the Nordics notably in electricity Distribution and Usages. Founded in 1961,

JPMorgan European Discovery Trust

Introducing the NEW Microsoft Teams Rooms licences

Microsoft announced a licence and name change for the Microsoft Teams Rooms licences. While this may be a nuisance, we hope you find the following blog useful in deciding which plan to move to. Previously the licence types

JPMorgan European Discovery Trust

Boost your security, digitise frontline workers

Did you know that 36% of frontline workers use a personal device to perform work-related tasks?1 IT staff know that using personal devices poses many security risks, but the practice is still widespread in many businesses. Do you

JPMorgan European Discovery Trust

Nexans’ annual Climate Day brought sustainable energy debates to the forefront

Nexans hosted its third annual Climate Day in New York City this afternoon with executives from the energy space including Siemens Gamesa, the American Clean Power Association (ACP), Citizens for Responsible Energy Solutions (CRES), Equinor, the American Council on Renewable Energy (ACORE), Ørsted, Marmen, and the Business Network for Offshore Wind (BNOW). In

JPMorgan European Discovery Trust

Why Adobe VIP for Enterprise

Adobe offers 2 core VIP versions for Creative Cloud and Single Apps plan. The majority of our customers at Bechtle have invested in Teams versions but there are some great benefits to Enterprise that you may not be

JPMorgan European Discovery Trust

JPMorgan’s JEDT – investing for capital growth in Europe

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. Month in review As of 31/07/2022 The

No more posts to show