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Investment trust gains emerging market exposure through Europe

11th October 2010 Print

The manager of the JPMorgan Overseas Investment Trust, Jeroen Huysinga, said the European stocks the team's analysts are identifying are offering excellent exposure to emerging markets at cheaper prices than buying directly.

Huysinga said the sentiment towards European stocks is irrationally gloomy and that the investment trust has been able to take advantage of this by gaining or increasing exposure to stocks such as Telefonica and Nokian, which are listed in European countries but conduct the main parts of their business in regions such as Latin America and Russia. The manager confirmed the gearing has also been increasing, potentially to 112%, in order to capitalise upon this opportunity.

Huysinga said, "The investment trust's strategy is to use the extensive resource of analysts globally to identify the best stocks. This in-depth process is providing the investment trust with the opportunity to gain exposure to growth stocks in areas which might seem out of favour to other investors. As a result the team is finding cheap valuations for growth companies with very good fundamentals, which have significantly contributed to the performance of the investment trust during volatile market conditions."

The investment trust often takes on a contrarian view and has recently bought Carlsberg due to its exposure to the Russian beer market as well as increasing holdings in US companies MacDonalds and General Mills. In addition, gradual changes to the portfolio since the end of 2008 include investing in telecoms and increasing exposure to transport services and autos but the investment trust is still underweight bank stocks.

Since October 2008, when Jeroen Huysinga took over the management of the JPMorgan Overseas Investment Trust, along with the team of 56 analysts, the share price has appreciated 66%, while the NAV has risen 50.4% (from 1 October 2008 to 4 October 2010). The benchmark, the MSCI AC World Index, has returned 22.3% over the same time period.