JPMorgan European Investment Trust - Income - Ordinary Shares - J.P. Morgan Asset Management
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JPMorgan European Investment Trust plc - Income Shares
(GB00B17XWW44)

JPMORGAN EUROPEAN INVESTMENT TRUST PLC - INCOME SHARES

Be prepared for any weather

JPMorgan European Investment Trust plc – Income Shares seeks out continental European companies that pay sustainable dividends in order to maintain an attractive quarterly income for shareholders.

Morningstar 5 star   *   

 

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Manager Commentary

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Month in review

The trust outperformed its benchmark in September. Positive contributors to relative returns included an underweight position in technology hardware & equipment and an overweight position in nonlife insurance. Detractors included an underweight position in aerospace & defence and an overweight position in real estate investment & services.An underweight position in Anheuser-Busch InBev contributed to relative returns over the month. Shares in the company remained under pressure following recent quarterly earnings results that were below analysts’ estimates. Anheuser-Busch InBev continues to suffer from an industry-wide decline in beer sales, while flagship brands Budweiser and Bud Light have been losing market share. Another underweight position also contributed. The German pharmaceutical company Bayer has underperformed since the closure of the Monsanto acquisition earlier this year. This month, the share price fell further following comments from the CEO making clear that the decline in sales of treatments Xarelto and Eylea will not be filled by pipeline products and that the company is now stepping away from its 6 billion euro target for pipeline assets.On the other hand, our underweight position in the Swedish clothing retailer Hennes & Mauritz (H&M) was negative in the period. The company reported earnings below expectations, but the market took increased gross margin guidance for the fourth quarter positively.

Looking ahead

A significant stock increase in the period was a switch from BBVA, the Spanish bank, into Crédit Agricole, the French bank. With a combination of populism in European politics and emerging market difficulties adding to the risk of holding European banks, it is important to be holding the correct stocks – particularly as the focus turns to how late in the cycle we are. Despite the relatively low interest rate environment, which is expected to remain until well into 2019, Crédit Agricole has been surpassing market expectations with regard to revenue and appears well placed to continue to do so.Another year of above-trend growth, recovering inflation and rising earnings means that fundamentals are sound, but they remain overshadowed by politics.Valuation has become more attractive this year, and in 2019 earnings should grow again, since we expect another year of economic expansion in developed markets.We expect to hear the details of a UK/EU deal, which is likely to be put to Parliament in the final quarter. The outcome is uncertain, but we continue to think that a deal would benefit both sides, and is therefore more likely than no deal.

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This is a marketing communication and as such the views contained herein are not to be taken as an advice or recommendation to buy or sell any investment or interest thereto. Reliance upon information in this material is at the sole discretion of the reader. Any research in this document has been obtained and may have been acted upon by J.P. Morgan Asset Management for its own purpose. The results of such research are being made available as additional information and do not necessarily reflect the views of J.P. Morgan Asset Management. Any forecasts, figures, opinions, statements of financial market trends or investment techniques and strategies expressed are unless otherwise stated, J.P. Morgan Asset Management’s own at the date of this document. They are considered to be reliable at the time of writing, may not necessarily be all inclusive and are not guaranteed as to accuracy. They may be subject to change without reference or notification to you. It should be noted that the value of investments and the income from them may fluctuate in accordance with market conditions and taxation agreements and investors may not get back the full amount invested. Changes in exchange rates may have an adverse effect on the value, price or income of the products or underlying overseas investments. Past performance and yield are not reliable indicators of current and future results. There is no guarantee that any forecast made will come to pass. Furthermore, whilst it is the intention to achieve the investment objective of the investment products, there can be no assurance that those objectives will be met. J.P. Morgan Asset Management is the brand name for the asset management business of JPMorgan Chase & Co. and its affiliates worldwide. To the extent permitted by applicable law, we may record telephone calls and monitor electronic communications to comply with our legal and regulatory obligations and internal policies. Personal data will be collected, stored and processed by J.P. Morgan Asset Management in accordance with our EMEA Privacy Policy www.jpmorgan.com/emea-privacy-policy.

Investment is subject to documentation. The Investor Disclosure Document, and Key Features / Terms & Conditions can be obtained free of charge from JPMorgan Asset Management (UK) Limited, and the Key Information Document can be obtained from JPMorgan Funds Limited or www.jpmam.co.uk/investmenttrust. This communication is issued by JPMorgan Asset Management (UK) Limited, which is authorised and regulated in the UK by the Financial Conduct Authority. Registered in England No: 01161446. Registered address: 25 Bank Street, Canary Wharf, London E14 5JP.

Morningstar Analyst rating as at 01 October 2018.

Source: Morningstar (www.morningstar.co.uk)

Morningstar Ratings™: © 2018 Morningstar. All rights reserved.

FE Crown Fund Ratings © 2018 FE. All rights reserved.

Moneyfacts award as at: 17 November 2017. ©2017 Moneyfacts Group plc. All Rights Reserved.

Moneywise Investment Trust awards as at: 28 March 2018. Moneywise Publishing Ltd ©2018. All Rights Reserved.

*Source: Association of Investment Companies, April 2018

Past performance is not a reliable indicator of current and future results.