JPMorgan European Discovery Trust plc (LON:JEDT) has announced its December commentary.
JEDT investment trust’s share price rose 8.87% over the 12 months to the end of December 2023, delivering some much-needed capital growth to European equities investors in 2023.
Month in review – As of 31/12/2023
- The trust underperformed its benchmark over December.
- Positive contributors to relative returns included stock selection and an overweight position in the construction & materials and leisure goods sectors.
- Detractors included stock selection in banks and medical equipment and services.
- At the stock level, our overweight position in Bravida, a Swedish multi-technical installation company, outperformed as lower interest rates could lead to an improvement for its new-build business.
- An overweight position in Kion, a German provider of forklift trucks and supply-chain solutions, also outperformed on the back of the wider market rally.
- Our overweight positions in BPER Banca, an Italian banking group, and Banco de Sabadell, a Spanish banking group, underperformed as investors started pricing additional interest-rate cuts from the European Central Bank (ECB).
Looking ahead – As of 31/12/2023
- The risks to the European 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, that are hard to forecast at this stage.
- Economic growth looks set to moderate in 2024. Cooling labour markets and tighter lending standards could limit growth in consumption, while the lagged effects of monetary tightening may challenge business spending. However, as inflation moderates the market will focus on when central banks will start to cut interest rates.
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.
