JPMorgan US Smaller Cos Outperforms Benchmark In Strong First Half

(Alliance News) - JPMorgan US Smaller Cos Investment Trust PLC on Tuesday reported a rise in net ...

Alliance News 20 August, 2019 | 1:55PM
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(Alliance News) - JPMorgan US Smaller Cos Investment Trust PLC on Tuesday reported a rise in net assets in the first half, outperforming its benchmark.

At June 30, the investment trust's NAV per share stood at 330.30 pence compared to 274.80p at December 31, a 20% jump. Year on year, JPMorgan US Smaller's NAV per share is 4.1% higher.

The stock was down 0.2% on Tuesday i London at 325.32 pence.

The investment trust's net assets grew 20% in the six month period to GBP190.8 million from GBP158.8 million. Compared to the same point last year, JPMorgan US Smaller's net assets are 5.0% higher.

The trust did not declare an interim dividend, the same as a year before.

"The backdrop to US markets over the past two years has been a recurring theme of concerns over trade policy and the direction of interest rates. I am, however, delighted to report that despite these 'Groundhog Day' concerns the company's net asset value, in both absolute and relative terms, performed strongly," said Chair Davina Walter.

In the first six months of 2019, the trust's NAV returned 21%. This was ahead of its benchmark - the Russell 2000 Index - which increased by 17%.

The trust's investment managers - Don San Jose, Dan Percella and Jon Brachle - said: "US equity markets made a strong start to the year, particularly during the first quarter, driven by a powerful rally not seen in US equity markets since the third quarter of 2009. This recovery made up for losses experienced at the end of 2018."

The managers said stock selection in the financial services and consumer discretionary sectors helped performance.

Specialty property lender Kinsale Capital Group and wholesale distributor of swimming pool supplies and equipment Pool Corp were noted as impressive performers in the period.

"The team's new idea production this year has been challenged by high valuations and strong overall stock market performance, which has resulted in two names added to date. The portfolio's positioning remains relatively unchanged. Similar to the previous year, our main allocations are in the financial services, producer durables and consumer discretionary sectors, which make up close to 60% of the overall portfolio's allocation," the managers said.

Walter added: "The US small cap sector is deemed to be higher risk and therefore more volatile, it naturally follows that there will be periods when this sector experiences a sell-off, often a sharp one. Given the strong recent performance and the fact that the concerns that caused markets to decline sharply in the fourth quarter of 2018 have not gone away, it is important to base any assessment of US small cap on the long term outlook. The board continues to believe the company can deliver superior investment returns over the long term based on the highly experienced team of US small cap managers."

By Paul McGowan;

Copyright 2019 Alliance News Limited. All Rights Reserved.

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Securities Mentioned in Article

Security Name Price Change (%) Morningstar
JPMorgan US Smaller Companies Ord 369.57 GBX 0.43

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