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JPMorgan European Discovery reports on a strong year as change of name kicks in

JPMorgan European Discovery (formerly JPMorgan European Smaller Companies) announced annual results to 31 March 2021. We note that the change in name has been carried out in order to better reflect the company’s investment strategy and its portfolio. Some of the portfolio companies have market capitalisations of up to EUR8bn; as such, the board believes that the company’s name did not accurately describe the portfolio holdings or the investment opportunities available to the Investment Managers. The change of name took place on 15th June 2021 and the LSE-listed ticker will also change from JESC to JEDT with effect from 17th June 2021.

Performance led by Spanish solar holding, Dutch semiconductor equipment manufacturer and Germany Online pharmacy

The company’s total NAV return was 66.2%, outperforming its benchmark by 8.3% as the MSCI Europe (ex UK) small cap index rose by 57.9%. The managers (Francesco Conte and Edward Greaves) reported noted that “top performers over the period included Spanish renewable energy operator, Solaria, due to the huge growth opportunity for solar energy in Spain; Dutch semiconductor equipment manufacturer, ASM International, as demand for semiconductors proved resilient during the slowdown and atomic layer deposition (ALD) continued to be instrumental in wafer miniaturisation; and German online pharmacy, Shop Apotheke, after the German government passed a law to mandate e-prescriptions.

Stock detractors from performance included Belgium logistics real estate company, Warehouses De Pauw, and Italian renewable energy operator, Falck Renewables, which both underperformed the rapidly rising markets due to their more defensive business models; and Swiss insurance company, Baloise, which suffered from the low interest rate environment.”

Looking forward, the managers say that “it appears we are entering a period which could be very supportive of equity markets. We see a synchronised global economic expansion while at the same time governments and Central Banks remain supportive and the valuation of the European Small Cap asset class is attractive.”

JEDT: JPMorgan European Discovery reports on a strong year as change of name kicks in

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