JPMorgan European Discovery Trust (LON:JEDT), investment trust targeting european investing 2025, has published its month in review as of 28/02/2025.
Month in review as of 28/02/2025
- The trust outperformed the benchmark over February.
- Positive contributors to relative returns included stock selection in travel and leisure and pharmaceuticals and biotechnology.
- Detractors included an underweight position in industrial metals and mining, and an overweight position in life insurance.
- At the stock level, our overweight position to Bilfinger, the industrial services provider, contributed to performance over the period given strong operational momentum and a rally of German domestic stocks following election results.
- Our overweight position to Heijmans, the fifth largest construction company in the Netherlands, also contributed to performance over the period following strong fiscal year 2024 results that beat consensus expectations and guidance. Strong momentum is expected to continue in 2025.
- Conversely, our overweight position in Vopak, the independent tank terminal operator, detracted from performance over the period following fourth-quarter results that missed expectations, although they were impacted by several one-offs.
- Our overweight position in Fluidra, the pool equipment supplier, also detracted from performance over the period due to concerns about the impact of US tariffs on China and Mexico. Fluidra is significantly exposed to these impacts as approximately 50% of US-sold products originate from Mexico, and a further 10-15% from China.
Looking ahead as of 28/02/2025
- European equities trade on an extreme discount to US equities. This argument may not be new to prospective investors; however, the European equity market today can offer comparable levels of quality and growth potential. This valuation support is recognised by European CEOs, who are buying back more stock than ever before.
- Technology adoption, healthcare innovation, emerging market consumption and climate change remain the key mega forces behind our secular themes. In 2025, we believe the biggest influencer on opportunity in this part of our portfolio will be AI.
- We believe the disinflationary trend is likely to continue, alleviating some pressure on central banks, which have adopted a measured approach to interest rate adjustments.
- Looking ahead, improving economic conditions, attractive fundamentals and structurally improving interest rates are likely to present investors with many attractive opportunities across markets.
JPMorgan European Discovery Trust 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.
