JPMorgan European Discovery Trust plc (LON:JEDT) has announced its March commentary.
Month in review As of 31/03/2024
The trust outperformed its benchmark over March.
Positive contributors to relative returns included an overweight position in household goods and home construction and stock selection and an overweight position in aerospace and defence.
Detractors included stock selection in retailers and an overweight position in travel and leisure.
At the stock level, our overweight position in Saipem, an Italian oil and gas services company, contributed positively to performance on the back of the announcement of strong results for the fourth quarter of 2023 and after management delivered guidance that beat consensus forecasts by 20% for 2024.
Our overweight position in Spie, a French engineering services company, contributed positively to performance after management continued to report strong growth (coupled with rising margins) on the back of excess demand driven by the green transformation of Europe.
Our overweight position in Do & Co, an Austrian events and airline food supplier, detracted from performance in a period of profit-taking after a period of very strong price performance.
Our overweight position in Sopra Steria, a French information technology consultancy, contributed negatively in a period of profit-taking after a period of very strong price performance.
Looking ahead As of 31/03/2024
While inflation is moderating to more sustainable levels and we are cautiously optimistic for a balanced interest-rate outlook, the risks to the economy have certainly not disappeared.
On top of the macroeconomic uncertainties, there are numerous political uncertainties arising out of ongoing geopolitical tensions and imminent national elections.
European equities trade on an extreme discount to US equities, a discount that has grown following strong 2023 technology-led gains in the US. This argument may not be new to prospective investors, but the European equity market today can offer comparable levels of quality and growth potential.
While the short-term outlook remains uncertain, we believe European equities offer an attractive entry point to the long-term investor, and we remain focused on selecting companies with pricing power, strong balance sheets and the ability to grow significantly over the long term.
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.
