JPMorgan European Discovery Trust plc (LON:JEDT) has announced its September commentary.
Monthly
As of 2023/09/30
- The trust underperformed its benchmark over September.
- Positive contributors to relative returns included stock selection in construction and materials and stock selection and an underweight position in medical equipment and services.
- Detractors included stock selection and an overweight position in household goods and home construction and stock selection in retailers.
- At the stock level, an overweight position in Bravida, a Swedish multi-technical services company, outperformed as the stock rebounded from earlier months following the chief executive officer’s statement that there is a general weakening in Nordic construction and installation markets.
- An overweight position in BPER Banca, an Italian banking group, outperformed as the company continues to have strong tailwinds from increasing interest rates.
- On the other hand, an overweight position in Zalando, a German online fashion retailer, underperformed as warm weather and a squeeze on consumer budgets have delayed the start of the autumn season, leading to more discounting.
- An overweight position in Verallia, a French manufacturer of glass packaging, underperformed as supply seems to have reached a balance with demand, raising questions about the sustainability of Verallia’s pricing power.
Looking Ahead
As of 2023/09/30
- After nearly two years of a squeeze on consumer wallets and a swift rise in interest rates, recent data points suggest that inflation has likely peaked and is gradually falling to more manageable levels.
- However, we have a somewhat conservative outlook. The risks to the European economy have certainly not disappeared, and a quick look at various macroeconomic indicators points to diminishing economic momentum.
- While we believe that recession risk remains, an economic slowdown may still be relatively shallow in depth and short in duration.
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.
