Edison review on JPMorgan European Smaller Cos
JPMorgan European Smaller Companies Trust (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.
Despite a recent widening in JESC's share price discount to cum-income NAV, the discount has been in a narrowing range on both a medium- and long-term basis. The current discount of 12.0% compares to an average of 9.0% over the last 12 months (range of 3.2% to 14.5%). This is narrower than the averages of the last three, five and 10 years of 11.3%, 13.0% and 14.8% respectively. The smaller average discount, despite global stock market volatility over the last year, could imply investor demand for the growth potential of European smaller companies.
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