JPMorgan Mid Cap unloved despite beating benchmark – JPMorgan Mid Cap reported a total return on net assets of 30.4%, compared with the benchmark total return of 21.5% for the year ended 30 June 2017. However, the total return to shareholders was 23.4%, reflecting a widening by 5.1 percentage points of the discount which the chairman attributes to fragile sentiment towards the UK and the UK election result. The board has decided to increase the base dividend this year by 9.5%, to 23.0p. There is also a special dividend of 3p (4.5p last year).
The managers’ report contains a table of performance attribution:
Benchmark total return 21.5
Stock & sector selection 9.1
Gearing/cash 0.6
Investment manager contribution 9.7
Portfolio total return 31.2
Fees/other expenses -0.9
Share repurchases 0.1
Other effects -0.8
Total return on net assets 30.4
The managers’ statement is very short, however. This is what we have on the stocks that drove the performance of the fund “Mergers & Acquisitions (‘M&A’) (i.e. takeovers) has long been a notable feature of the mid cap space, and your Company benefitted from three take-overs during the year – WS Atkins, Shawbrook and Paysafe (the latter not yet completed). While clearly beneficial to performance, the key contributor to our outperformance versus the benchmark over the year was stock selection. A number of our largest holdings continued to deliver very strong returns, key among them JD Sports Fashion, Ashtead, Electrocomponents and Intermediate Capital Group.”
JMF : JPMorgan Mid Cap unloved despite beating benchmark