In this series of short profiles, we ask leading fund managers to defend their investment strategies, reveal the biggest risks to the bull market, tell us their unpopular investment opinions, discuss what they'd never buy, and recount the best piece of advice they’ve ever been given.
This week our interviewee is Jonathan Ingram, portfolio manager of JPMorgan European Discovery Trust (JEDT).
Describe Your Investment Strategy
Our bottom up strategy relies on understanding the relative benefits of, and then utilising, the very best insights from both fundamental and quantitative perspectives. I have always struggled with the market view that managers are either fundamental or quantitative. Fortunately we sit within J.P. Morgan Asset Management who have world class teams in both disciplines, and so understanding how and when to combine those inputs is really what has defined the strategies we have run over the last 20 years or so.
What are the Biggest Investment Opportunities in 2024?
Small cap stocks around the world are trading at discounts to large cap stocks that have rarely been seen before. Taking European data, the level of discounts that small cap stocks trade at are levels last seen in 2003 and then 2009 which, with hindsight, were two particularly good times to invest into the asset class.
What are the Biggest Risks to the Current Bull Market?
Geopolitical instability is currently at the front of a lot of people’s minds, and it looks plausible that this could become more challenging before we begin to see things improve. Outside of this, interest rates, that stay high for a long time, will likely cause some sort of economic slowdown.
Who is the Most Inspiring Person You've Worked With and Why?
In 2003, I was working within the currency team at J.P. Morgan Asset Management and attended an internal presentation by the CIO of European equities, Chris Complin. Pretty much there and then, I applied to join his team and have been here ever since. What inspired me most was his willingness to challenge every single aspect of a traditional fund management set-up in search of outperformance, not being afraid to borrow ideas from academia or other industries, from behavioural finance to game theory.
What, if Any, Investments Would Fit Into the 'Buy and Hold Forever' Category?
Having a robust sell discipline is just as important as effective idea generation of buy ideas. The success of any investment is ultimately a function solely of those two factors – the price you paid and the price you sold at. We believe that you should put as much focus on when to sell as was put on the initial buy decision. Hence “buy and hold forever” isn’t a category for us.
What Would You Never Invest in?
We would never invest in a business we did not understand.
How Worried Should Active Managers Be About the Future?
There are very few industries where the judgement of success is as clear cut as it is in fund management. With that clarity, inevitably comes pressure. As we further progress into a world of more and more data, the scrutiny on underperforming managers will only increase.
What Unpopular Investment Opinions Do You Have?
I have always taken a data rational approach to fund management, basing our investment style and approach off beliefs that have been empirically proven. One unpopular opinion this produces is that I do not subscribe to the school of thought that low turnover is always better than higher turnover. Turnover comes with a cost of course but, if you factor that cost in and still believe the investment decision to be a good one, you should make that decision regardless of whether it is your first decision that day or that year.
Has Crypto's Resilience Surprised You? And Will We See a Crypto ETF in the UK?
As the volume of cash transactions falls, it shouldn’t come as a surprise that something else has appeared to fill that void of exchanging value outside of the commercial banking system.
Does Asset Management Have a Role in Promoting Social Mobility?
The role of an investment team is to analyse an incredibly wide range of companies, that serve an even more diverse range of end-customers, and that job ultimately becomes harder if you don’t have diversity of thought within investment teams. So social mobility is in our own interests to promote.
Have you Ever Engaged With a Company and Been Particularly Pleased (or Disappointed) by the Outcome?
An example that comes to mind in the “pleased” category was engaging directly with a very high profile CEO over (his own) executive compensation. We felt interests were suitably aligned only if certain stretch targets were hit. The targets we suggested on the face of it were hugely ahead of the market expectations for that year but were ultimately the exact ones the company decided upon.
What's the Best Bit of Advice You've Ever Been Given, Personal and Professional?
Never confuse your own brilliance for the seat you sit in. I should elaborate this advice was given to a large roomful of people, not directly to me! But as I alluded to in the first question, my team and I are surrounded by world class people and it is important to never lose sight of that.
What Does Your Life Outside of Fund Management Look Like?
We are a family of five and so weekends can feel like being an Uber driver sometimes! We all love to cook and so there’s plenty of time in the kitchen also. In between, I like to take whichever child I can persuade to come to watch my team Fulham play.
