JPMorgan European Discovery Trust plc (LON:JEDT) has announced its October commentary.
Monthly
As of 2023/10/31
- The trust outperformed its benchmark in October.
- Positive contributors to relative returns included stock selection in industrial engineering and medical equipment & services.
- Detractors included stock selection in automobiles & parts and construction & materials.
- At the stock level, an overweight position in Stabilus, a German manufacturer of industrial gas springs, outperformed after announcing a large acquisition in its industrial business.
- An overweight position in BPER Banca, an Italian banking group, also outperformed as it continues to see strong tailwinds from increased interest rates in Europe.
- On the other hand, an overweight position in Electrolux Professional, a Swedish manufacturer of professional laundry & cooking equipment, underperformed as its clients pushed out orders due to the weakening environment.
- An overweight position in Bravida, a Swedish multi-technical services provider, also underperformed, as the slowing residential construction market is putting pressure on its profitability.
Looking Ahead
As of 2023/10/31
- The risks to the European economy have certainly not disappeared. Uncertainty over profits, the dynamics of the post-Covid economy and the extraordinary surge in corporate profits are still complicated and make forecasting unusually difficult.
- Recent data points suggest that inflation has likely peaked and is gradually falling to more manageable levels. Whilst we believe that recession risk remains, the depth of an economic slowdown may still be relatively shallow and short in duration.
- In the wake of last year’s broad market sell-off, lower valuations presented investors with a new slate of opportunities across equities. Markets have since seen solid gains in 2023, but this rebound has not been evenly distributed. As investors assess positioning for the rest of the year and 2024, it’s important to assess both risks and opportunities after this year’s market rally.
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.
