Citywire for Financial Professionals
Stay connected:

View the article online at

JPMorgan European Growth reviews stock picking after a tough year

The JPMorgan European Growth investment trust is reviewing its stock selection after a slump in performance.  

JPMorgan European Growth reviews stock picking after a tough year

JPMorgan European Growth  trust is reviewing its stock selection after a slump in performance and concerns about more market volatility.  

The review comes as the trust’s results showed its net asset value (NAV) fell 13.6% in the year 31 March to underperform the benchmark FTSE AW Developed Europe ex UK index, which fell 12.1%.

According to the board the fund was hit by a ‘few months of high anxiety’ during 2011 and opted to remain underweight in the banking sector, exiting its Greek, Portuguese and Irish positions.

But holdings in French banks, motor group Faurecia and chemical groups Arkema and BASF all contributed to the poor performance.

The trust also suffered in 2008 when exposure to financials hit returns, compounded by gearing, or money borrowed by the trust to make further investments.   

Figures from Numis Securities show that over five years its NAV has fallen 25% and its share price has declined 27.9%, the second worse performance in the seven-strong Europe investment trust sector.

Charles Cade, analyst at Numis Securities, said: ‘In 2008 with the financial crisis being geared caused a major hit, in addition the fund had some banking exposure so performance came off quite dramatically that year.

‘It subsequently recovered and last year wasn’t a disaster but the board showed signs of being uncomfortable when the fund is underperforming in weak markets. Although it has shown quite a strong recovery it is still back below, on relative terms, where it was pre-2008.’

Its biggest shareholder is US-based 1607 Capital Partners, which holds 22% of the trust.

Cade added: ‘They hold quite a lot of funds. They’re not an activist in the way that some hedge funds are but they are a value investor.

‘I think it [review] is more prompted by the board but ultimately when you do have a large shareholder, if you’re underperforming pressure will start to build.’

The trust has two share classes. Its growth shares are currently trading at 145.5p, an 11.5% discount to its NAV of 164.3p per share. The income class are also trading at 76.5p, an 11.8% discount to NAV of 87p per share, however this share class is not under review.

Sign in / register to view full article on one page

1 comment so far. Why not have your say?

John Osborne

Jun 23, 2012 at 11:06

Their European small company trust has been underperforming as well.

report this

leave a comment

Please sign in here or register here to comment. It is free to register and only takes a minute or two.

News sponsored by:

The Citywire Guide to Investment Trusts

In this guide to investment trusts, produced in association with Aberdeen Asset Management, we spoke to many of the leading experts in the field to find out more.

Watch Now

More about this:

Look up the investment trusts

Look up the fund managers

  • Stephen Macklow-Smith
    Register or Sign in to receive email alerts for items in your favourites whenever we write about them


Today's articles

Tools from Citywire Money

From the Forums

+ Start a new discussion

Weekly email from The Lolly

Get simple, easy ways to make more from your money. Just enter your email address below

An error occured while subscribing your email. Please try again later.

Thank you for registering for your weekly newsletter from The Lolly.

Keep an eye out for us in your inbox, and please add to your safe senders list so we don't get junked.

Sorry, this link is not
quite ready yet