JPMorgan Overseas says, for the second half of 2015, the total return on the Company’s net assets was +1.2% and the return to shareholders was +2.5% compared with the return on its benchmark, the MSCI AC World Index (in sterling terms) of +1.5%.
The manager says positions in a number of high growth companies performed strongly, including Alphabet (+44%) as well as AutoTrader (+45%), the UK’s leading online marketplace and classified advertising company for used vehicles, and Ryanair (20%), the leading low-cost airline operator in Europe.
The weakest areas of stock selection were focused on energy and basic industries. In energy they have a preference for exploration and production (E&P) companies, which lagged the more defensive oil majors. In basic industries the holding in First Quantum, the copper producer, saw its shares fall 68%. Originally, they had thought that a strong management team would be able to unlock value for shareholders, but the ongoing drop in commodity prices has caused the company’s balance sheet to weaken, severely limiting management options. They recently exited the position.
JMO : JPMorgan Overseas hurt by First Quantum holding