Board probes JPMorgan European trust stock selection
Board’s “concern” over underperforming trust leads to investigation of stock selection process.
The board of the JPMorgan European trust, managed by Stephen Macklow-Smith, has ordered an independent investigation of its stock selection.
The review has been instructed to be carried out on the trust’s portfolio of growth shares, which is focused entirely in European equities.
The board is not reviewing the trust’s portfolio of income shares, which has 40 per cent invested in UK equities.
According to the annual results the growth portfolio fell by 13.6 per cent in the year to March 31, while its benchmark, the FTSE All World Developed Europe, ex UK, fell by 12.1 per cent.
The board said the underperformance had been concentrated in a “few months of high anxiety”, during the summer of 2011.
However, while the trust outperformed in the first and final quarters of the reporting year, the board said the inability to fully regain lost ground during the recovery was “of concern”.
Shareholders will be informed of the conclusion of the investigation “in due course”.
The board previously conducted a review of the trust’s stock selection process after the 2008 credit crunch crisis. The review showed that underperfomance at inflection points had always been recovered “quite quickly”.
The board said that with an objective to achieve sustainable annualised outperformance in net asset value of 1-2 per cent over every three year period, the “situation” needed to be addressed, while market volatility added “urgency” to the review.