European investment trust JEDT outperformed MSCI Europe benchmark in April

JPMorgan European Discovery Trust plc

JPMorgan European Discovery Trust plc (LON:JEDT) has provided its April commentary.

Month in review

As of 30/04/2022

  • The Trust outperformed its benchmark in April.
  • Positive contributors to relative returns included stock selection and an underweight position in real estate and an overweight position in non-life insurance.
  • Detractors included stock selection in industrial engineering and an underweight position in banks.
  • At a stock level, an overweight position in SPIE, the French multi-technical services company, outperformed after recent earnings confirmed its organic growth potential.
  • An overweight position in Encavis, the German renewable-energy company, also outperformed as electricity prices remained high on geopolitical tensions.
  • An overweight position in Bechtle, the German IT reseller, detracted from performance, as the company suffered from supply-chain constraints and a lack of product availability.
  • An overweight position in Interpump group, the Italian manufacturer of industrial pumps, underperformed as fading economic growth lead to a downgrade in expectations for the company.

Looking ahead

As of 30/04/2022

  • Inflationary pressure from the commodity supply shock due to the Russia-Ukraine crisis and supply-chain disruptions from China’s zero Covid-19 policy continues to pose a dilemma for central banks. The recent monetary policy responses suggest that central banks now view inflation as the most pressing problem to tackle at the expense of current growth expectations.
  • We believe that there is still considerable pent-up demand, and strong household balance sheets and savings rates mean developed-world consumers are in a better shape to support the economic expansion over the medium term.
  • Historically, geopolitical events, even those involving major energy producers, have not had a lasting impact on markets. While the ongoing geopolitical tensions and the prospect of higher interest rates may spark occasional bouts of volatility, we still believe the outlook for equities remains positive.

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.

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