Fund Profile

Disclaimer

Disclosure – Non-Independent Marketing Communication

This is a non-independent marketing communication commissioned by JPMorgan UK Smaller Companies. The report has not been prepared in accordance with legal requirements designed to promote the independence of investment research and is not subject to any prohibition on the dealing ahead of the dissemination of investment research.

Overview
JMI’s widening discount may be an attractive entry point into the best-performing UK small-cap trust over the long term…
Overview

JPMorgan UK Smaller Companies (JMI), managed by Georgina Brittain and Katen Patel, focusses on identifying what the managers believe are the most exciting and highest-quality opportunities within the UK small-cap space. JMI benefits from the wealth of analyst resources available to it, with Georgina alone having more than two decades under her belt as manager, experience which is particularly important given the poor coverage that small-cap stocks receive.

The team’s investment process can largely be summarised in three questions: is it a good business? Is it attractively valued? Is the outlook improving? In practice, this means that the team have a strong bias towards quality-growth stocks, which we outline in more detail in the Portfolio section. The team highlight the strong earnings that their holdings have demonstrated over the last 12 months, where they have seen some of the biggest earnings upgrades of the last decade.

JMI has demonstrated strong long-term Performance through beating both its peers and benchmark over five years, and is in fact the best-performing UK small-cap trust over this period. JMI’s more recent performance has not been as strong due to the trust having been caught up in the global growth-stock sell-off, underperforming over the last 12 months. JMI’s discount has widened recently in line with the direction of its peer group, and it is currently trading on a 14.3% discount, marginally wider than its peer group average. We also note that JMI has recently seen its sustainability rating upgraded by Morningstar to ‘above average’.

Kepler View

We believe that JMI offers investors distinct benefits. The first is that the trust offers access to a committed approach to growth-focussed UK small-cap investing, albeit with a bias to quality stocks. The team have been able to demonstrate long-term success in the execution of this strategy, with investors also benefitting from the substantial weight of resources available to the management team. We believe that both these factors are important in selecting small-cap managers, as the idiosyncratic nature of the sector means that managers have a greater propensity to generate alpha (so long as they can demonstrate that they know where to look, and have the resources to carry out sufficient due diligence on under-researched stocks). We believe the JMI team can demonstrate these things, meaning that JMI is a compelling option for long-term investors looking to capitalise on the high-growth opportunities within the UK.

Conversely, there are also near-term opportunities within the trust because JMI’s near-term performance and discount have both taken a downturn over 2022, even though the nature of the opportunities that the JMI team seek to capitalise on are not based on macroeconomic sentiment or short-lived opportunities like cyclical commodity rallies. Instead, the team believe their holdings represent multi-year growth opportunities, given either their secular growth potential or market dominance. As such, if investors are aligned with the JMI team they may view the current market as an opportunity to ‘buy the dip’ and capitalise on the eventual powerful combination of both positive NAV reversal and a potential discount narrowing once the market begins to normalise.

Bull

  • Long-term track record of strong outperformance
  • Recent drawdowns and discount widening may offer attractive entry point
  • Well-resourced team, with a two-decade management tenure

Bear

  • Can underperform during periods of strong value-stock momentum
  • Small-cap growth investing may not be suitable for cautious investors
  • Gearing can enhance losses on the downside
Continue to Portfolio
2022 Kepler Growth Rated Fund

This trust has been awarded a rating by Kepler Trust Intelligence for growth... Find out more

Fund History

06 Jul 2022 Fund Analysis
JMI’s widening discount may be an attractive entry point into the best-performing UK small-cap trust over the long term…
22 Jun 2022 Spider's web
We outline our new quantitative system for mapping the crucial performance characteristics of investment trusts…
16 Feb 2022 Perfectly formed
Our research suggests that investment trusts really are a better way to gain exposure to smaller companies…
05 Jan 2022 Kepler’s top-rated trusts for 2022
We unveil the winners of our ratings for 2022 in the Growth, Income & Growth and Alternative Income categories…
13 Oct 2021 Results analysis: JPMorgan UK Smaller Companies
JMI has built on its excellent track record, taking a balanced approach to a dynamic asset class…
08 Jul 2021 London Calling
UK equities represent a ‘once in a generation’ opportunity according to the managers who joined us at our event last week…
07 Jul 2021 Slides and Audio: JPMorgan Smaller Companies
Download the presentation and listen to the audio from our 'Cool Britannia' Summer conference on 01 July...
07 Jul 2021 Slides and Audio: Roundtable - Small is beautiful
Download the presentation and listen to the audio from our second roundtable discussion with Dan Whitestone, Georgina Brittain and Judith MacKenzie...
23 Jun 2021 Time to back Britain?
After a challenging period for the United Kingdom, we wonder if it could be the most exciting market on a five-year view…
09 Jun 2021 Cool Britannia?
Join the team at Kepler Trust Intelligence and six leading UK fund managers as we examine the prospects for UK equities with COVID in retreat and Brexit uncertainty finally behind us…
21 May 2021 Fund Analysis
JMI has a strong long-term track record of outperformance...
25 Mar 2021 Results analysis: JPMorgan Smaller Companies
JMI continues to be a compelling proposition for investors even on a tighter discount, after releasing a strong set of half-year results this morning…
06 Jan 2021 This time next year Rodney...
We review the performance of the team’s ‘top picks’ for 2020 – including some proper plonkers – and place our bets for the year ahead…
23 Dec 2020 Fund Analysis
One of the strongest performing trusts in 2019, we look at JMI and the portfolios continued outperformance of the benchmark and peers…
21 Jul 2020 A game of four quarters
Seven trusts, two quarters. Are our team still happy with their trust picks for 2020?
27 Feb 2020 Fund Analysis
After an extraordinary 2019, JMI has seen its discount once more slip, offering a potentially attractive entry point…
02 Jan 2020 Crystal Balls
Drunk on our success in choosing funds to perform well in 2019, the team at Kepler Trust Intelligence is back at the table with a glint in its eye…
07 Aug 2019 Fund Analysis
The managers of JPMorgan Smaller Companies apply a clear, consistent process to UK smaller companies to produce consistent returns...
View all

Welcome to Kepler Trust Intelligence

Kepler Trust Intelligence is authorised in the UK by the Financial Conduct Authority.
Please enter a valid email address
{{item.msg}}
Please enter a valid password
{{item.msg}}
Please enter a valid email address
{{item.msg}}
Please check your email. If an account exists you'll be sent instructions on how to reset your password.
Kepler Trust Intelligence is authorised in the UK by the Financial Conduct Authority. To ensure that we are able to provide content which is appropriate for you, please tell us a little about yourself.
Please choose an option
{{item.msg}}
Please enter a company name
{{item.msg}}
Please enter a location name
{{item.msg}}
Please choose an option
{{item.msg}}
Please enter a platform
{{item.msg}}
Please choose an option
{{item.msg}}
Please enter a trust
{{item.msg}}
?
The information contained herein is not for distribution and does not constitute an offer to sell or the solicitation of any offer to buy any securities in the United States to or for the benefit of any United States person (being residents of the United States or partnerships or corporations organised under the laws thereof). The investment funds referred to herein have not been registered in the United States under the Investment Company Act of 1940 and units or shares of such funds are not registered in the United States under the Securities Act of 1933.
Please confirm
{{item.msg}}
Please select an option
{{item.msg}}
See benefits
A free Kepler Trust Intelligence account allows you to access premium content including the ‘Kepler View’ – our verdict on the trusts we cover – and historical research so you can see how our view has changed over time. An account also unlocks useful facilities like the ‘follow’ button which lets you keep track of the trusts you’re interested in and as a logged in user you can also download PDFs of our research, and choose the layout of the page you’re reading to suit your preference. We will not share your details unless you give us permission to do so, and we won’t bombard you with emails – we only send one a week.
Please select an option
{{item.msg}}
Please enter your first name
{{item.msg}}
Please enter your last name
{{item.msg}}
Please enter a valid email address
An account already exists with this email - have you forgotten your password?
{{item.msg}}
Please enter a valid password
{{item.msg}}
Please enter a valid password
{{item.msg}}
How will this information be used? Your answers help us to tailor our content to relevant investment trusts, and to ensure that the asset allocation and portfolio strategy research we produce is appropriate to our userbase.
Our Website uses Cookies Cookies are small text files held on your computer. They allow us to give you the best browsing experience possible and mean we can understand how you use our site. Some cookies have already been set. You can delete and block cookies, but parts of our site won’t work without them. By using our website you accept our use of cookies. For further information please refer to the Kepler Privacy Notice.
Need help?

One more thing...

Did you know, you can 'follow' individual trusts on Kepler Trust Intelligence? Use the functions below to set up alerts and we'll send you research and updates on your chosen trusts.

Suggested trusts to follow

Browse all funds
Need help?
Current Site Kepler Trust Intelligence is produced by the investment companies team at Kepler Partners and is the UK’s premier source of detailed qualitative research on investment trusts. Absolute Hedge is a market leading UCITS research database providing proprietary research on funds, themes and strategies in the UCITS space. Kepler Liquid Strategies is a Dublin domiciled UCITS fund platform featuring a number of best-of-breed fund managers. Kepler Partners is a corporate advisory and asset raising boutique specialising in the regulated funds market in Europe and investment trusts in the UK.