15th Jun 2020 12:00
(Alliance News) - JPMorgan European Investment Trust PLC said the Covid-19 outbreak and its investment style led to both its portfolios underperforming in financial 2020
Income shares in the trust were trading 2.4% lower at 110.50 pence each at midday Monday in London while Growth shares were down 3.1% at 254.00p each.
As at March 31, JPMorgan European's net asset value per Growth share had declined to 274.3 pence from 324.0p the same date the year before.
NAV per Income share at the end of March was 126.5p, down from 172.0p the prior year.
The net asset value negative return from the Growth and Income portfolios were 16% and 28% respectively, falling significantly behind its benchmark, the MSCI Europe Index (excluding the UK), which had a negative return of 8.3%.
The trust said the underperformance of the Growth portfolio was as a result of the "value" style used by the investment manger to select shares being out of favour, combined with a widening of the discount. The Income portfolio returns were hurt by market turmoil during the Covid-19 pandemic as well as the market's initial reaction to both dividend cuts made by companies and the possibility of future dividends being cancelled.
JPMorgan European paid a dividend per Growth share of 8.85 pence, maintained from the year prior. Per Income share the trust paid 6.7p, up from 6.25p.
Looking ahead, Chair Josephine Dixon said: "The turmoil in financial markets caused by the Covid-19 pandemic is ongoing as the virus has not gone away. A global recession is forecast and so the investment challenges remain high. Despite the disappointing results, we remain of the view that an intelligent, rigorous investment process based on fundamental facts will prevail. Whilst we are in unchartered waters there remain significant investment opportunities in Europe and we support the manager's approach to address those in achieving our long term objectives.
By Ife Taiwo; [email protected]
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