OREANDA-NEWS. September 17, 2015. JPMorgan European Smaller Companies Trust (JESC) has a 25-year track record of seeking capital appreciation by investing in smaller Continental European companies.

The managers note that the sector competes for investor attention against other high-growth areas such as emerging markets, and the recent sell-off in Asia could underpin investor demand, a trend suggested by the historically low level of discount. Performance has been strong versus the benchmark over both short and longer periods, with a 20-year NAV total return of 1,173% - all of which has been achieved under the long-serving current managers - beating the nearest peer by more than 60%. The managers favour cyclical stocks in the expectation of further economic recovery in Europe, driven by domestic demand.

JESC's discount to NAV has narrowed since the first quarter of 2015 and at 9 September the shares stood at a cum-income discount of 8.3%, compared with average figures of 11.7%, 12.8% and 14.0% over one, three and five years. The global market volatility seen from late August does not seem to have had any adverse impact on the trust's discount, suggesting that demand for the growth potential of smaller European companies is holding up, as investors distance themselves from Asian and emerging markets.