The Mercantile Investment Trust plc - Ordinary Shares - J.P. Morgan Asset Management
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The Mercantile Investment Trust plc
(GB00BF4JDH58)

THE MERCANTILE INVESTMENT TRUST PLC

Join our passion for discovering developing firms

The Mercantile Investment Trust plc focuses on identifying tomorrow’s market leaders, by targeting UK companies outside the FTSE 100 that have significant room for growth and are not recognised by other investors.
 

     

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Why invest in the UK?

Guy Anderson, Fund Manager of The Mercantile Investment Trust plc discusses the opportunities and challenges of investing in the UK small and mid-cap market.

Some of the themes discussed include:

  • Perception vs reality of investing in the UK
  • Evolution of the UK market post Brexit
  • UK Market trends
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About this trust

Risks

Performance

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Fees

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Portfolio

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Manager Commentary

Fund Managers

Month in review

  • Positive contributors to relative returns included stock selection in banks and an underweight position in oil & gas producers.
  • Detractors included an overweight position in industrial metals & mining and stock selection and an underweight position in pharmaceuticals & biotechnology.
  • Our underweight position in CYBG, the holding company, contributed positively to returns this month. CYBG’s acquisition of UK-based Virgin Money Brands, a consumer finance company, took place amidst cyclical headwinds and Brexit concerns, and therefore was felt by the market to be poorly timed. Our underweight position in Intu Properties was also positive. A consortium including Brookfield Property withdrew its bid for the UK-based shopping centre group, citing uncertainty around macroeconomic conditions and potential near-term volatility across markets.
  • On the other hand, owning the British tonic water group Fever-Tree detracted from returns in November. Following its strong performance since 2016, with the stock almost doubling, investors have become more cautious owing to its expensive valuation. This is largely due to market weakness, but also the lack of trading updates since July, which has left investors concerned that Fever-Tree is falling behind on its estimates.
  • Another overweight position in EVRAZ, the multinational steelmaking and mining company, also contributed negatively to returns. Miners and steelmakers remain under heavy pressure because of market uncertainty due to the ongoing trade tensions between the U.S. and China.
  • Looking ahead

  • Investors globally are watching for signs of the Federal Reserve’s future plans for the U.S. interest rate:signs of hawkish policy are likely to drive markets down, whilst dovish policy will be well received. Investors are also monitoring the U.S.-China trade situation, which could cause further instability in markets.
  • Brexit uncertainty is building as we draw nearer the proposed March 2019 leave date. A no deal Brexit would not be well received by markets but a compromise agreement may be the catalyst needed to release the undoubted medium-term value in the UK equity market, which now yields over 4%. This is attractive compared to both gilts and inflation.
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    Important information

    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.

    *FE Crown rating as at 01 December 2018.

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

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

    Investment Week Investment Company of the Year awards as at: 22 November 2017. © Incisive Business Media (IP) Limited 2018. All rights reserved.

    Money Observer Ratings: Moneywise Publishing Ltd ©2018. 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.