JPMorgan UK Small Cap Growth & Income (JUGI)

Managers Georgina Brittain and Katen Patel focus on three key factors, quality, value and momentum, when constructing their Portfolio for JPMorgan UK Small Cap Growth & Income (JUGI). This approach has been particularly important recently as there have been some sizeable share price moves seen at the lower end of the UK market cap spectrum in the past year, and the managers’ stock selection approach, based on these factors, has helped identify many of the winners, leading to strong Performance.

M&A also continues to be a key factor in the small-cap market, with activity in 2026 even higher than the historically elevated levels of the past few years. Georgina and Katen have had several holdings taken over, not only supporting returns due to the high premia of bids, but also providing liquidity for them to rotate into the plethora of opportunities they have identified elsewhere in UK small caps.

The M&A also highlights what may be a considerable valuation opportunity in the asset class, with aggregate PE ratios at the bottom of their interquartile range and only marginally above large-cap equivalents, despite the considerably better growth potential from smaller companies. When combining these valuations with resilient fundamental performance, the yield on the asset class has now crept above 3%, although JUGI is offering more than this to shareholders through its enhanced Dividend model which pays c. 4% in equal quarterly instalments. This approach led to the trust being awarded Kepler’s Income Rating for 2026.

The managers are seeking to capitalise on the valuation opportunity even further through the use of Gearing, which remains around the 10% level. This makes JUGI one of the most geared trusts in the AIC UK Smaller Companies peer group.