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The JPMorgan Intrepid European Fund Class A (VEUAX): Historical Overview

Europe-Focused Mutual Funds in 2015: Outlook after September

(Continued from Prior Part)

An introduction

The JPMorgan Intrepid European Fund Class A (VEUAX) seeks “total return from long-term capital growth. Total return consists of capital growth and current income.”

The fund’s management uses the bottom-up approach while selecting securities, a process that “focuses on the value, quality and momentum characteristics of stocks.” But it’s also important to note that the fund mostly invests in shares issued by companies whose activities are focused in Western Europe. The fund may invest up to 8% of its assets in securities of companies based out of emerging European countries. It can make use of exchange-traded futures for efficiently managing cash flows.

VEUAX’s assets were spread across 76 holdings as of September 2015, when it was managing assets worth $997.6 million. As for its September portfolio, the fund’s top ten equity holdings included Novo Nordisk A/S (NVO), BT Group (BT), Imperial Tobacco Group (ITYBY), and Ryanair Holdings (RYAAY), which together make up 9.2% of the fund’s portfolio.

Historical portfolios

For this analysis, we’ll be considering VEUAX’s holdings as of August 2015, as this is the latest sectoral breakdown available to us. The fund’s holdings after August reflect valuation-driven changes to the portfolio, not the actual holdings. The sectoral composition in the graph above for September 2015 has been taken from the fund house’s website.

The fund’s portfolio has seen quite a few changes in the past year. Here’s a breakdown:

  • VEUAX’s exposure to the consumer discretionary sector, which had fallen to a low of 10.3%, witnessed a high of 20% earlier in 2015, and currently stands at 13%.

  • The energy sector appears to have fallen out of favor with the fund’s management, having an 8% exposure in 2014 but declining to 1.6% by September 2015. The sector’s exposure has increased, however, from 0.6% since June 2015.

  • Fund managers have become bullish on industrials over the past year. The sector had a little over 7% weight in the portfolio in 2014, but now the sector stands at over 22%.

  • On the other hand, materials have become out of favor. The fund’s exposure to the sector stood at 10% in March 2015, but since then it has declined to 3.5%. Telecom services have had a similar fate.

  • Utilities had become out of favor at the end of 1Q15 with 0.6% exposure, but are being seen as attractive by the fund management as exposure to the sector has increased to 4.5% at present.

But what impact have these portfolio moves had on the JPMorgan Intrepid European Fund Class A (VEUAX)? Continue to the next part of this series to find out.

Continue to Next Part

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