JPMorgan European Discovery Trust (LON:JEDT), investment trust targeting european investing 2025, has published its month in review as of 31/01/2025
Monthly as of 2025/01/31
- The Trust underperformed the benchmark over January.
- Positive contributors to relative returns included stock selection in travel & leisure and industrial transportation.
- Detractors included stock selection and an overweight position in pharmaceuticals and biotechnology and stock selection in construction and materials.
- At the stock level, an overweight position to CTS Eventim, Europe’s largest ticketing company, contributed to performance given continued strong operational momentum and the expectation of healthy demand for upcoming tours.
- An overweight to De’Longhi, a leader in small domestic appliances with a focus on coffee and cooking also contributed to performance following the announcement of a EUR 60 million share buyback programme, as well as a strong beat on fourth-quarter revenues.
- Conversely, an overweight position to Bonesupport, a healthcare company specialising in orthobiologics, detracted from performance given the death of a patient following the unauthorised and incorrect use of a Bonesupport product. We do not see this as a risk to the investment case and maintain Bonesupport as one of our highest conviction holdings.
- An overweight position to BFF, an Italian bank, also detracted from performance given the release of a negative research report highlighting the potential for the Bank of Italy’s ban on dividends to continue into 2026, as well as the weakness in the factoring business and loan growth.
Looking ahead as of 2025/01/31
- European equities trade on an extreme discount to US equities. This argument may not be new to prospective investors; however, the European equity market today can offer comparable levels of quality and growth potential. This valuation support is recognised by European CEOs, who are buying back more stock than ever before.
- Technology adoption, healthcare innovation, emerging market consumption and climate change remain the key mega-forces behind our secular themes. In 2025, we believe the biggest influencer on opportunity in this part of our portfolio will be AI.
- We believe the disinflationary trend is likely to continue, alleviating some pressure on central banks, which have adopted a measured approach to interest rate adjustments.
- Looking ahead, improving economic conditions, attractive fundamentals and structurally improving interest rates are likely to present investors with many attractive opportunities across markets.
JPMorgan European Discovery Trust is an investment trust company. The Investment Trust JEDT objective is to achieve capital growth from a portfolio of quoted smaller companies in Europe, excluding the United Kingdom.
