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

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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

  • The trust underperformed its benchmark in September. Positive contributors to relative returns included stock selection and an underweight position in pharmaceuticals & biotechnology and an overweight position in industrial metals & mining. Detractors included stock selection in construction & materials and in general retailers.
  • Being overweight in EVRAZ, the Russian steel producer, was positive for relative returns over the period. Very strong first-half results, with net income 25% ahead of market expectations, were driven primarily by higher steel and vanadium prices.
  • On the other hand, our overweight to IG Group, the retail contracts for difference (CFD) and spread betting business, detracted from returns over the month. The shares fell following a soft revenue update after a period of low market volatility and regulatory change and the decision of CEO Peter Hetherington to step down.
  • Looking ahead

  • The largest change in position size was an increase of our overweight in Jardine Lloyd Thompson, the insurance broking firm. Our overweight position increased following a a takeover approach at a 34% premium from Marsh & McLennan, which increased the share price and subsequently the size of our overweight position by 21 basis points.
  • Conversely, the greatest reduction in position size was in Thomas Cook, where we exited our holding following a profit warning. We had already reduced our position size in July in anticipation that the prolonged good summer weather could have a material adverse effect on short-term profitability, but following the news that the competitive environment was also deteriorating into 2019 we chose to exit the position entirely.
  • The lack of clarity over how businesses could be affected by Brexit presents some downside risk, although there is the potential for a positive surprise if a satisfactory deal can be reached. With UK equities flat in the year-to-date, we believe much of the potential negative news has been priced in and there appears to be a disconnection between what the fundamentals suggest and share price levels.
  • In our opinion, the UK equity market remains attractively valued compared to other developed markets.
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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 November 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.