JPMorgan European Discovery Trust plc (LON:JEDT) has released its Annual Report and Financial Statements for the year ended 31st March 2022.
Marc van Gelder, Chairman of JEDT commented on the outlook:
“Predicting the outlook in these uncertain times remains very challenging. The last few months have been difficult for global markets, with considerable uncertainty surrounding the implications of the re-emergence of inflation and the impact of Russia’s invasion of Ukraine. However, the Board remains confident in the robust investment process and careful approach to risk management followed by the Investment Managers and believes that investing in European smaller companies will continue to deliver attractive long-term returns for shareholders.”
Francesco Conte and Edward Greaves, Investment Managers of JPMorgan European Discovery Trust added:
“We started the year believing like many market participants and policymakers that inflation would prove to be transient. The sad events in the Ukraine and more recently the lockdowns in China make it highly unlikely that rises in prices will be temporary. The positive aspect of equities unlike bonds is that there are companies and sectors that can still perform in inflationary environments and those are the companies which we have been increasingly investing in. Companies with high barriers to entry should be able to pass on inflation. Certain areas of insurance are positively correlated with rising bond yields. Prime property companies in areas where there is limited capacity such as logistics should also have pricing power. So, in the short term, we have adapted the portfolio to be better insulated from inflation.It is difficult to predict when the current inflationary spiral will end.
Historically, European smaller companies have been one of the best asset classes in the world, and we do not see the fundamentals that brought this about, changing. Innovation has powered smaller companies and will continue to do so long into the future. As always it is our job to find these opportunities.”
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.
