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Unlocking the untapped power of mid-caps

December 2021

Categories: DIY Magazine

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.

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.

[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) (£)


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.

Balancing these out are a range of tech companies, financial, utilities and real estate stocks that make a compelling investment case for those seeking out strong long-term returns. The growth potential in areas such as home improvement and cloud-based IT solutions, for example, puts these mid-cap companies in prime position to benefit from the post-pandemic recovery, and catch the attention of far-sighted investors.

Flexing to fit

The JMF trust mainly invests in a varied pool of strong FTSE 250 mid-cap stocks. There is substantial legroom to shift in different directions when circumstances allow, including investing in the Alternative Investment Market – a source of smaller high-growth firms in fields as varied as biotech and data technologies that have the potential to achieve a market break-through. At the other end of the scale, the trusts looks to hold onto stocks that grow to reach the large-cap FTSE 100 index. As well as keeping trading costs down, this is a valuable way to ensure that the knowledge built up around these stocks is not lost.


An attractive risk-reward balance

By focusing on identifying untapped opportunities among mid-cap firms, JMF provides a solid investor proposition with the potential to generate attractive long-term returns. While mid cap stocks may experience greater volatility, the fund is well diversified and has the flexibility to adjust its positioning at any point in the market cycle to keep risks in check.


Find out more about the JP Morgan Mid Cap Investment Trust here >



Important information

This is a marketing communication and as such the views contained herein do not form part of an offer, nor are they to be taken as advice or a recommendation, to buy or sell any investment or interest thereto. Reliance upon information in this material is at the sole discretion of the reader. Any research in this document has been obtained and may have been acted upon by J.P. Morgan Asset Management for its own purpose. The results of such research are being made available as additional information and do not necessarily reflect the views of J.P. Morgan Asset Management. Any forecasts, figures, opinions, statements of financial market trends or investment techniques and strategies expressed are unless otherwise stated, J.P. Morgan Asset Management’s own at the date of this document. They are considered to be reliable at the time of writing, may not necessarily be all inclusive and are not guaranteed as to accuracy. They may be subject to change without reference or notification to you. It should be noted that the value of investments and the income from them may fluctuate in accordance with market conditions and taxation agreements and investors may not get back the full amount invested. Changes in exchange rates may have an adverse effect on the value, price or income of the products or underlying overseas investments. Past performance and yield are not reliable indicators of current and future results. There is no guarantee that any forecast made will come to pass. Furthermore, whilst it is the intention to achieve the investment objective of the investment products, there can be no assurance that those objectives will be met. J.P. Morgan Asset Management is the brand name for the asset management business of JPMorgan Chase & Co. and its affiliates worldwide. To the extent permitted by applicable law, we may record telephone calls and monitor electronic communications to comply with our legal and regulatory obligations and internal policies. Personal data will be collected, stored and processed by J.P. Morgan Asset Management in accordance with our EMEA Privacy Policy Investment is subject to documentation. The Annual Reports and Financial Statements, AIFMD art. 23 Investor Disclosure Document and PRIIPs Key Information Document can be obtained free of charge in English from JPMorgan Funds Limited or at This communication is issued by JPMorgan Asset Management (UK) Limited, which is authorised and regulated in the UK by the Financial Conduct Authority. Registered in England No: 01161446. Registered address: 25 Bank Street, Canary Wharf, London E14 5JP. 090o211110092914

Author: DIY Investor Magazine Categories: DIY Magazine

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