JPMorgan Overseas shareholders made more money than the fund’s benchmark, the MSCI all countries World Index, over the latter half of 2014. The total return to shareholders was was 8.7% vs. 7.6% on the Index. The outperformance came from an improvement in the fund’s rating rather than the performance of the underlying portfolio however; on a fully diluted basis (i.e. taking into account the effect of the company’s subscription shares) the total return on net assets was 7.3%.
The manager’s report says United Continental made the biggest contribution to performance over the six months, with its shares rising 63%. The US airline operator has benefited from a lower oil price, as well as US economic growth, reduced capacity and stronger industry pricing. They say that, unlike in 2008/2009, very little of the current drop in fuel prices is being passed on to consumers. This is because many carriers can still fill seats without resorting to discounts.
Other positive contributions came from UPM, the Finnish paper company, which is exposed to a consolidating industry and an improving pulp market; Electrolux, the Swedish appliance maker which is currently acquiring GE’s appliance business and is expanding in the US following a deal with Home Depot; ICICI, India’s largest private sector bank; and Mr Price, a South African discounted-clothing retailer.
JMO : JPMorgan Overseas shareholders benefit from narrowing discount