JPMorgan UK Small Cap Growth & Income

JUGI focuses on quality companies – those in sound financial positions and using their money efficiently – that operate in growing markets and whose shares are available at reasonable prices. This approach has demonstrated consistency in outperforming passive funds investing in UK smaller companies. For instance, looking at every five-year period – with five years often considered long enough to assess an investment strategy – over the past 20 years, JUGI has outperformed the broader UK smaller companies’ market more than 90% of the time. In addition, JUGI has delivered higher returns than the broader UK smaller companies’ market over the past decade.

However, JUGI’s strategy may struggle in periods when investors focus more on economic trends rather than on companies’ individual merits. This was notably the case in 2022, when the energy shock caused by Russia’s invasion of Ukraine led investors to focus heavily on companies operating in the oil and gas industry. Moreover, smaller companies are often seen as more sensitive to geopolitical and economic events. As such, share prices of many smaller companies came under pressure in 2022, as investors shifted towards investments seen as safer. Similarly, in 2025, a small part of the UK smaller companies market performed exceptionally well, notably businesses linked to gold mining. This also worked against the managers’ focus on companies’ individual characteristics.

Due to these two years, JUGI has lagged passive funds investing in UK smaller companies over the past five years, although it is worth noting that the trust has outperformed in every other calendar year within this period. Performance was particularly strong in 2021, when returns came from a range of very differentiated investments, including a media company, a package holiday business, and a financial firm specialising in buy-to-let mortgages.

Finally, it is worth noting that, historically, JUGI has typically performed better than passive funds in strong market periods, but also fallen more sharply in challenging times. Therefore, we believe the trust could suit investors with a longer-term horizon willing to embrace risk in pursuit of higher potential returns.

Georgina and Katen believe the UK smaller companies’ market is home to many exciting businesses, firmly focused on innovation and led by ambitious management teams. They look to invest in those with the greatest potential, as they believe these businesses can outperform both the broader UK smaller companies’ market and larger companies over time.

When building the portfolio, the managers focus primarily on the individual strengths of each company rather than broader economic trends. However, they favour businesses operating in markets that are likely to grow steadily over the long term. For example, JUGI currently invests in companies producing essential components for data centres and other projects related to artificial intelligence, as well as in banks conducting business overseas in countries experiencing rapid economic growth.

Given the managers’ emphasis on investing in the best opportunities, the trust’s portfolio can look very different from UK smaller-company stock market indices. For instance, as the chart below shows, JUGI currently invests more in sectors like industrials, financials and consumer discretionary, but less in real estate, healthcare and basic materials. This is because many of the companies in the latter sectors depend heavily on things like interest rates or the prices of certain natural resources to generate profits, or have less predictable profits.

In general, Georgina and Katen hold their stocks for three to five years on average, although some have remained in the portfolio for much longer.

• Smaller companies may carry more risk
• UK smaller companies have been out of favour with investors for a number of years
• JUGI uses gearing, or debt, to invest, which can amplify both returns and losses