JPMorgan European Smaller Companies caught out by two IPOs

JESC : JPMorgan European Smaller Companies caught out by two IPOs

JPMorgan European Smaller Companies results for the half year to the end of September 2014 have been published. The net asset value total return was a negative 16.6% – some 7.1% less than the return on the fund’s benchmark, the Euromoney Smaller European Companies (ex UK) Index. Compounding this was a widening in the funds discount from 11.3% to 12.9% so that the return to shareholders was -17.9%. The dividend was maintained at 1.2p.

The Board has agreed a new fee with the manager cutting it from 1.3% of market capitalisation to 1.0% of net assets.

The manager’s report mentions two IPO disasters – Edreams Odigeo in Spain and Bravofly Rumbo in Switzerland – both of which the fund invested in and both of which issued profit warnings with their initial quarterly results. Two other stocks which get a dishonourable mention are  Italian auto components business, Sogefi, which suffered from its exposure to the slowing Brazilian economy, and Dutch construction group, Royal Bam, which experienced cost over-runs on a number of projects.


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