Looking at the Portfolio of the JPMorgan Intrepid European Fund

JPMorgan Intrepid European Fund overview

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

The bottom-up approach is employed while selecting securities for the portfolio, as the fund notes that the process “focuses on the value, quality and momentum characteristics of stocks.” The fund mostly invests in shares issued by companies whose activities are focused in Western Europe.

Looking at the Portfolio of the JPMorgan Intrepid European Fund

The fund may invest up to 8% of its assets in securities of companies based in emerging European countries. It can make use of ETFs for efficiently managing cash flows.

The fund’s assets were spread across 81 holdings in September 2016, and it was managing assets worth $826 million at the end of September. The August portfolio’s top ten equity holdings included Nestlé S.A. (NSRGF), Novo Nordisk A/S (NVO), ABB Ltd. (ABB), Adidas AG (ADDYY), and Siemens AG (SIEGY).

Portfolio changes in the JPMorgan Intrepid European Fund

The industrials sector has taken over consumer staples as the most-invested sector by VEUAX. The remaining four out of the top five invested sectors have the fund’s assets evenly distributed among them. The financials, consumer staples, materials, and consumer discretionary sectors round off the top five invested sectors. These five sectors combine to form a little less than 75% of the fund’s assets.

Compared with the MSCI Europe Index, VEUAX is overweight in the consumer discretionary, industrials, information technology, and materials sectors. Meanwhile, it is underweight in the financials, energy, healthcare, and telecom services.

The fund’s portfolio has undergone quite a bit of change in the past three years until September 2016. A look at quarterly portfolios shows that three years ago, consumer discretionary occupied a much larger portion of the portfolio than consumer staples. At present, the situation has reversed.

In the same period, exposure to the energy sector has ranged from 0.5%–11%, and it is currently 4.9%. Almost every sector, except real estate and utilities, has seen sharp swings in portfolio weight over the period.

The fund is true to its name in the sense that it is not afraid of experimenting with different stocks. The fund’s management has occasionally held a stock for as little as a month. There is a high rate of turnover in every sector.

How has this portfolio shuffling impacted the JPMorgan Intrepid European Fund – Class A (VEUAX) in YTD 2016? Let’s see in the next article.