5 Dec 2017 08:00
London, UK, 5 December 2017
Edison reviews JPMorgan European Smaller Companies Trust (JESC)
JPMorgan European Smaller Companies Trust (JESC) was launched in 1990 and aims to generate long-term capital growth from a diversified portfolio of small-cap European equities. The investment process involves screening the c 1,500 company universe to construct a relatively concentrated portfolio of 50-75 positions in firms with positive fundamentals and reasonable valuations. JESC has a very good investment track record, outperforming its benchmark over one, three, five and 10 years. It has also performed strongly versus the average of its four peers, ranking second over one, three and five years and first over the last 10 years, where its NAV total return is 23.6pp higher than its closest peer.
JESC's discount has been in a narrowing range since mid-November 2016. The current 5.6% share price discount to cum-income NAV is narrower than the averages of the last one, three, five and 10 years (range of 11.6% to 14.6%). While JESC aims to generate long-term capital growth, it pays out the majority of net revenue income, which will fluctuate year-to-year. Based on the FY17 total annual dividend of 4.7p, the trust has a dividend yield of 1.1%.
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