JPMorgan European Discovery Trust (LON:JEDT), investment trust targeting european investing 2025, has published its month in review as of 31/12/2024.
Month in review as of 31/12/2024
- The trust outperformed the benchmark over December.
- Positive contributors to relative returns included stock selection and an overweight position in household goods and home construction, and stock selection in pharmaceuticals and biotechnology.
- Detractors included stock selection in real estate investment & services development and construction & materials.
- At the stock level, an overweight allocation to DO & CO, the hospitality service provider, contributed to relative returns over the month. DO & CO released second-quarter results that significantly beat consensus, leading to upgrades in expectations. This was followed by the extension of a major contract within the international event catering segment.
- An overweight allocation to Cairn Homes, the Irish homebuilder, also contributed to relative returns over the month. Cairn Homes demonstrates continued strong operational momentum as demand for housing continues to exceed supply.
- Conversely, an overweight allocation to TAG Immobilien, the German real estate company, detracted from relative returns over the month. This was due to what we assume to be profit taking at year-end.
- An overweight allocation to Arcadis, the management, consultancy, design and engineering services provider, also detracted from relative returns over the month. This is due to profit taking following a year of strong performance.
Looking ahead as of 31/12/2024
- European equities trade on an extreme discount to US equities. This argument may not be new to prospective investors but 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 artificial intelligence (AI).
- 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.
