19th Aug 2015 11:59
LONDON (Alliance News) - JP Morgan US Smaller Co Investment Trust PLC Wednesday reported a rise in its net asset value in the first half of 2015, beating its benchmark, as it benefited from investments in the financial services and consumer discretionary sectors.
The investment trust said its NAV for the six months ended June 30 rose 4.6%, beating its Russell 2000 Index benchmark, which reported a 3.8% rise, with performance driven by strong stock selection in the financial services and consumer discretionary sectors. It said it particularly benefited from exposure to software provider Advent Software, real estate broker Marcus & Millichap and pizza chain Papa John's.
JP Morgan said that market sentiment at the beginning of the year benefited from a "perceived improvement" in Europe and a drastic decline in the price of oil. However, it noted that the strength of the US dollar, combined with concerns about China and the Eurozone have put corporate profits under pressure, giving rise to worries about valuations.
The company added that its share price grew 2% in the half year, lagging the increase in NAV and resulting in a small widening of the discount.
"Whilst it is disappointing to report the shares' discount widened at the end of June, US smaller companies are seen as riskier assets, and therefore volatile in nature, and aligning our share price movement with the change in the NAV is always going to be challenging," Chairman Davina Walter said in a statement.
"There is clearly much uncertainty in markets currently and reasons to be cautious over the short term, however these set-backs often produce good investment opportunities for long term patient investors. We would also expect the investment team's focus on balance sheet strength and intrinsic value to provide some protection to the company's portfolio. Over the longer term the US economy has demonstrated its ability to create exciting growth prospects in the small cap sector and our company should continue to take advantage of these opportunities," Walter added.
Shares in JP Morgan were trading flat at 171.95 pence Wednesday afternoon.
By Karolina Kaminska; [email protected] @KarolinaAllNews
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