Page 10 - DIY Investor Magazine | Issue 31

UNLOCKING THE UNTAPPED POWER OF MID-CAPS They are rich in potential, but often underestimated. See how J.P. Morgan Asset Management’s dedicated investment trust specialising in UK mid-cap companies could provide diversification as well as strong growth and income opportunities for your portfolio. As markets come out the other side of a pandemic defined by uncertainty and an increase in risk-averse behaviour, investors are looking to reset their objectives while acting on the lessons they have learned from such a period of volatility. Traditionally, large-caps have represented the solid option for investments. They hold all the advantages of a proven track record, healthy liquidity levels and resilience during periods of instability – a logical strategy for investors looking to regain traction slowly and steadily following the economic shocks of Covid-19. However, recent performance indicators underline a remarkable period for the JPMorgan Mid Cap Investment Trust plc (JMF). Benchmarked against the UK’s FTSE 250, the investment trust specialises in medium-sized UK companies as its key investment targets, while also exploring selected opportunities arising out of the London Stock Exchange’s Alternative Investment Market for growing companies. ‘RECENT PERFORMANCE INDICATORS UNDERLINE A REMARKABLE PERIOD FOR THE JPMORGAN MID CAP INVESTMENT TRUST’ While past performance is not a reliable indicator of current and future results, figures to 31 August 2021 show that JMF has secured a very strong cumulative share price performance of 73.75%, 94.51% and 432.29% over 1, 5 and 10 years. Cumulative NAV performance over the same time period has been 53.03%, 78.84% and 331.60%1. This impressive performance record has been attributed to a combination of highly-targeted stock selection by the fund’s investment managers, and strategic borrowing (gearing) efforts. ‘NIMBLE MID-CAP STOCKS ARE WELL-POSITIONED TO CAPITALISE ON THE GROWTH OPPORTUNITIES THAT ARISE’ MID-CAPS RECIPE FOR SUCCESS Clearly, there is untapped investment potential among some of the UK market’s exciting mid-sized companies. But what are the characteristics that make mid cap stocks a healthy addition to portfolios? As the economy reboots from the pandemic, many nimble mid-cap stocks are well-positioned to capitalise on the growth opportunities that arise. They are big enough to have established themselves with investors; yet small enough to maintain sufficiently agile business models and often outpace the fortunes of large-caps. Attractive mid-cap stocks have a developing track record of solid sales growth, which demonstrates long-term sustainability, but they also in parallel enjoy increasing profitability – this is the ideal mix for a subsequent increase in stock value. CONSUMER IS KING Among its highly diverse portfolio of companies, JMF is notable for high-performing consumer and integrated media brands – among them Future plc, producers and curators of content for over 200 brands, spanning tech, hobbies, home interest and entertainment. 1 Share price quarterly rolling performance (%) as at 30/06/2021: 2016/17 = 23.43%, 2017/2018 = 27.39%, 2018/2019 = -11.44%, 2019/2020 = -15.02, 2020/21 = 65.12. Benchmark: FTSE All-Share Index (ex FTSE 100, ex Inv Companies) (£) DIY Investor Magazine · Nov 2021 10