Investment Outlook 2025
Pushing the Boundaries
Our Investment Outlook covers all the big issues facing investors, from US economic policy and AI investing, to portfolio diversification, Chinese stimulus and European equity valuations.
Smaller companies tend to offer more growth potential than larger ones, typically leading to higher equity valuations. The current environment is a rare exception—and could hold an attractive opportunity.
The Mercantile is an actively managed investment company. This means the managers have the flexibility to diverge from the Company’s benchmark, the FTSE All-Share, by choosing the number and size of portfolio holdings. This article explores how the managers aim to achieve long-term capital growth, and outperform the benchmark, rather than slavishly tracking it.
At a time when UK stocks are out of favour with investors both at home and abroad, it may surprise many to learn that the UK’s medium and smaller-sized businesses have generated higher long-term returns than the UK’s largest companies. Several factors account for this outperformance.
The UK economy has been getting a lot of bad press of late, with criticism focused on the economy’s underperformance relative to the US and other developed countries. However, things may not be as grim as the media would have us believe.
Patient investors have had plenty of opportunity to perfect their art in the UK equity market over the past 20 months or so to October 2023, as domestically oriented stocks in particular have remained stubbornly out of fashion. Guy Anderson, manager of the mid- and smaller-cap focused Mercantile Investment Trust (MRC), is one of the leaders playing the waiting game. Yet he emphasises that the situation is much more complex than the market’s persistent deeply negative sentiment would suggest.
History proves that the key to successful stock market investing is time in the market, and hence that investors with the endurance and patience to adopt a long-term perspective will be rewarded over time. How does this apply to The Mercantile? Find out more.
The UK market has been out of favor over the past few years, but Georgina Brittain, co-portfolio manager of JPMorgan UK Small Cap Growth & Income plc (JUGI) updates on the Trust’s performance, and Simon French, UK Economist of broker Panmure Gordon argues that the UK economy is in better shape than generally thought and is set to improve.
The Mercantile benefits from the insight and skills of an experienced management team. They attribute their success in part to their persistent forward focus - looking beyond current headlines, and closely examining the latest data – to glean insight into future market developments. This allows them to spot investment opportunities early, and react quickly, to gain exposure ahead of other investors.
For long-term investors, especially those seeking regular income, reliable and consistent investment returns and predictable, rising dividends bring welcome peace of mind. These attributes form the cornerstones of The Mercantile Investment Trust’s investment strategy.
The renewed sense of government stability in the UK following the recent general election could boost the economy further and help to bring more investors back to UK equities.
The UK equity market is currently seeing valuations at historic lows. But with improving economic sentiment, an expected upturn in M&A activity and the potential for government intervention, is the tide about to turn? The Portfolio Managers of the JPMorgan Claverhouse Investment Trust (JCH) believe it won’t be long before the discount narrows. JCH offers a robust choice with diversified exposure to UK high quality large-cap stocks and a track record of 51 years of dividend growth.
Recent additions to the portfolio and an increase in gearing to the highest level in a decade show how the Mercantile Investment Trust plc is positioning for a stronger UK economy and consumer.
JPMorgan Global Growth & Income plc’s global best ideas investment strategy allows the portfolio to go almost anywhere and outperform the broader equity market across market cycles.
With the economy so strong, why don’t Americans feel better?
We’re approaching a pivotal moment for investors in the US. The S&P 500’s impressive rally (up 21% year to October 24) has until recently been dominated by a small number of stocks in the Magnificent Seven.
In this article, portfolio managers of JPMorgan European Growth & Income plc, Alexander Fitzalan Howard and Timothy Lewis, reveal the reasons they believe Europe presents an investment opportunity not to be missed.
The JPMorgan US Smaller Companies Investment Trust plc offers access to one of the deepest market opportunities available anywhere in the world. With a long runway of growth ahead of them, smaller companies tend to outperform over the long term and play a key role in driving productive economic growth. After a period of being overshadowed by the tech driven US large cap market, is it time for US smaller companies to shine?
An improving macroeconomic backdrop combined with several long-term secular growth themes create a positive near-term and long-term outlook for many real assets. JPMorgan Global Core Real Assets (JARA) invests in the higher-quality end of the real asset spectrum, seeking assets with the potential to the generate stable and predictable income that makes up most of the portfolio’s return.
Investments in infrastructure and transportation have recently performed well vs. real estate and now make up almost half of JPMorgan Global Core Real Assets Limited (JARA) portfolio. Both types of assets offer access to business models with relatively stable and predictable income that makes them attractive now and over the long term. Learn how infrastructure and transportation assets are helping power JARA’s returns.
While Asia-Pacific real estate has been resilient, an improving environment in the US may produce a generational opportunity for real estate investors and drive an increase in JARA’s net asset value. The onset of inflation and rising interest rates towards the end of 2022 dramatically changed the landscape for real estate assets.
One of the key advantages of JGGI is its ability to go anywhere in its search for the most compelling investment opportunities to meet its objective of providing predictable quarterly income and long-term growth. Read our latest article to discover more.
Although the action has clearly been elsewhere, there is an appealing alternative option for investors that would prefer a more diversified approach to the US stock market. It is often the case that, when markets become as concentrated as this, there will be another part of the market suffering from investor neglect. Relative valuations suggest that, in current market conditions, it is US smaller companies that have been out of favour with investors.
The US stock market is being supported by better-than-expected company profits, a pick-up in economic growth and prospects for interest rate cuts later in the year. Nevertheless, we believe it is important to stay mindful of the risks, using an active investment approach to tap into higher quality opportunities created by the current wide dispersion in valuation and performance across sectors.
The combination of growth and value research teams provides JPMorgan American Investment Trust’s portfolio managers with broad insights into how technological innovation may impact companies across sectors.
JPMorgan US Smaller Companies Investment Trust aims to provide investors with capital growth by investing in US smaller companies that have a sustainable competitive advantage. After a difficult year in 2023, the Company’s managers suggest the conditions are in place for a recovery.
Investment in private infrastructure is still a relatively new opportunity for retail investors: the inclusion of infrastructure assets in investment trusts over the past 15 years or so is an indication of the sector’s appeal. Despite a challenging year for the asset class, we believe that there are several strong reasons to feel optimistic about the outlook for private infrastructure.
While the current environment points towards quality and defensiveness in large caps, expectations for Federal Reserve interest rate cuts later this year could be more constructive for investors in US smaller companies.
Historically, smaller company stocks have traded at a premium valuation to their larger counterparts. For the first time in 20 years this premium has disappeared, reflecting cyclical economic challenges as well as certain structural factors. While the structural headwinds are likely to remain in place, at some point the cyclical headwinds will fade, potentially presenting an opportunity in the smaller companies segment of the stock market.
Real assets underpin everyday society, from local utilities to global transport networks, and from office space to apartment blocks. JPMorgan Global Core Real Assets Limited (JARA) gives shareholders access to a wide set of investments, with a global reach, not typically available in the UK investment trust market, and the aim of providing relative stability and wider diversification.
Austin Forey, portfolio manager, JPMorgan Emerging Markets Investment Trust, reflects on 30 years of investing in emerging markets and the lessons that have shaped his approach to investing.
Investing in high-quality emerging market companies with consistent dividends can be a winning strategy across market environments.
A number of macroeconomic and geopolitical variables are likely to influence the performance of emerging market companies and stock markets, notably the aftermath of elections, both in emerging markets and developed markets. JMG’s portfolio managers prepare for these potentially volatile environments by positioning the portfolio with the strongest businesses they can find at reasonable prices, which have the greatest potential to survive in weaker markets and to thrive in strong ones.
Geopolitical conflict, rising oil prices and increasing expectations for artificial intelligence (AI) are driving some of the biggest impacts on global stock markets. But depending on the regional market and a portfolio’s positioning, the results can vary widely. That’s been the case for the emerging Europe, Middle East and Africa (EMEA) region.
When investors think of the technology sector, familiar names such as Google, Microsoft, and Apple are often the first companies that come to mind. Some household emerging market (EM) companies like Samsung, Infosys and TSMC may also enter the fray. However, the EM technology sector is far broader than that, being home to a number of world leading companies in spaces such as hardware, software, IT outsourcing, semiconductors, and cloud.
In this article Isaac Thong, co-portfolio manager of JPMorgan Global Emerging Markets Income Trust, explains how the team uses a broad investment mandate to achieve the Trust’s objectives for investors.
In this article, Austin Forey, portfolio manager, provides an update on emerging markets and outlines how JPMorgan Emerging Markets Investment Trust’s long-term investment strategy has produced results for shareholders.
With several decades of experience in emerging market (EM) equities, Austin Forey, portfolio manager of the JPMorgan Emerging Markets Investment Trust plc (JMG), shares his seven truths about successful investing in this diverse asset class.
India’s bull market and China’s sluggish economy create two different challenges in the near term, but JMG’s portfolio managers are finding opportunities everywhere.
This article discusses the election results in India, and the investment implications of short-term valuation challenges and long-term positive prospects.
Investors are, rightly, getting excited about Japan again. After an extensive 34 year wait, the Nikkei Index finally reached a new all-time high. Driving this positive sentiment are a number of structural changes that are targeting improvements in corporate governance and are already creating compelling investment opportunities.
Wider valuation and performance dispersion, elevated market concentration and potentially higher-for-longer interest rates underscore the importance of an active approach to engage opportunities and manage risks in the US stock market.
The world’s fastest growing regional equity market, Asia ex-Japan, includes two of the five largest economies in the world, China and India, and several of the biggest global technology companies. JPMorgan Asia Growth & Income plc (JAGI) is positioned to tap into all the main drivers of Asian equities, from the global artificial intelligence boom to corporate governance reforms and local economic cycles.
More than a year after China’s post-Covid reopening, performance has not lived up to expectations. But Tai Hui, Chief Market Strategist, APAC and Simmy Qi, Portfolio Manager, believes that conditions are right for this huge economic powerhouse to finally turn its fortunes around.
JPMorgan Indian Investment Trust was the first trust to focus purely on Indian companies. Today it remains the largest Indian trust, providing access to India’s massive long-term growth potential through locally based investment expertise. In this article, Amit Mehta, portfolio manager, provides insight into the investment possibilities of the world's most powerful growth engine.
Japan is the world’s third largest economy, but after a couple of decades of low growth, low returns and deflation, it is often overlooked by investors. However, recent economic performance has been better, and may be about to accelerate. In this article JFJ’s portfolio manager, Nicholas Weindling explains what has changed and why he is optimistic about the future.
Japan's economic growth has been driving investment prospects recently. Explore how corporate governance reform and market volatility have affected this.
India is an alluring prospect for growth-focused investors these days. With its economy growing at over 7% in 2022/23 according to the World Bank– the second highest rate of all the G20 nations, there is growing evidence that India is on the cusp of a new investment cycle, with a big pick-up in capital investment and government projects over the past six months. In this article, Amit Mehta, portfolio manager of JPMorgan Indian Investment Trust provides further insight into the compelling case for investing in India.
After decades of false dawns and dispiriting results, it seems the tide is finally turning for investors in Japan. Recent market data shows Japan to be the best-performing major market so far in 2024, underpinned by fundamental changes in the way Japanese companies are operating. Nicholas Weindling and Miyako Urabe, explain what has changed and why they are positive about the outlook ahead.
Japan is facing some political uncertainty, read this quick thought for the week for what this could mean for the Japan equity market outlook.
Making the case for investing in Chinese equities has not been easy in recent years. While there is no easy fix, we ask whether the intensifying policy response is the signal investors need to re-engage with the world’s second largest stock market.
With their focus on long-term returns, investment trusts deserve a closer look for any investors still looking to use their 2023/2024 individual savings account (ISA) allowance before the 5 April deadline.
Investment trust enthusiasts could be forgiven for feeling slightly despondent as they contemplate their portfolios and ponder good ideas for their ISA allowances, before the tax year ends on 5 April.
Seven time-tested strategies for guiding investors through today’s challenges and toward tomorrow’s goals.
Today’s unprecedented pace of technological change is creating attractive investment opportunities across global markets and sectors. One of the most effective ways to capitalise on this growth potential is through investment trusts.
Discover the reasons for investing in a JISA, and why they're potentially one of the most effective ways to save for your child's future.
ETF Perspectives
Explore insights from J.P. Morgan Asset Management’s ETF research. In addition discover data and commentary on current topics related to ETF classes and strategies.
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