JPMorgan US Smaller Companies Investment Trust plc Annual General Meeting 29 April 2015 Fiona Harris , Executive Director, Client Portfolio Manager FOR PROFESSIONAL CLIENTS/QUALIFIED INVESTORS ONLY - NOT FOR RETAIL USE OR DISTRIBUTION
A tight knit team with a disciplined focus on delivering alpha Also leverages the insights of the J.P. Morgan Equity organization, which includes over 40 research analysts in the US Don San Jose, Managing Director Portfolio Manager Industry Exp: 18 years JPM Exp: 14 years Daniel Percella, Jonathon Brachle, Jason Blumstein, Executive Director Vice President Vice President Co-Portfolio Manager / Research Analyst Research Analyst Research Analyst Industry Exp: 7 years Industry Exp: 10 years Industry Exp: 13 years JPM Exp: 7 years JPM Exp: 8 years JPM Exp: 7 years As of April 2015. Source: J.P. Morgan Asset Management. There can be no assurance that the professionals currently employed by J.P. Morgan Asset Management will continue to be employed by J.P. Morgan Asset Management or that the past performance or success of any such professional serves as an indicator of such professional’s future performance or success. 1 1 | FOR PROFESSIONAL CLIENTS/QUALIFIED INVESTORS ONLY - NOT FOR RETAIL USE OR DISTRIBUTION
Our investment philosophy - We are fundamental bottom-up stock pickers Our approach leads to a portfolio that has historically shown less volatility than the market with less exposure to the downside Quality Business Quality Management Valuation We focus on quality first: Management is key: Valuation is critical: Durable business model Good stewards of capital Price/earnings Consistent earnings Committed to increasing Price/book value shareholder value Clear competitive advantages Private market analysis Track record of success High return on invested capital Free cashflow yield Sustainable free cashflow Enterprise value analysis The targets and aims provided above are the Investment Manager’s targets and aims only and are not necessarily part of the Fund’s investment objectives and policies as stated in the prospectus. There is no guarantee that these will be achieved. 2 | FOR PROFESSIONAL CLIENTS/QUALIFIED INVESTORS ONLY - NOT FOR RETAIL USE OR DISTRIBUTION
Portfolio Review 3 | FOR PROFESSIONAL CLIENTS/QUALIFIED INVESTORS ONLY - NOT FOR RETAIL USE OR DISTRIBUTION
JPMorgan US Smaller Companies Investment Trust plc: 2014 Performance As of December 2014 FY 2014 JPM US Smaller Companies IT share price 1 5.6% JPM US Smaller Companies IT net asset value 2 12.8% Russell 2000 Index Net (£) 3 11.1% Excess return 4 1.7% Past performance is not necessarily indicative of future results. The current portfolio management team assumed responsibility of the portfolio November 2008. 1 Change in share price with net dividends, if any, reinvested (Source: Morningstar). 2 Change in net asset value per share with net dividends, if any, reinvested (Source: Morningstar). 3 Change in the Index with net income reinvested, in sterling terms. Comparison of the Company’s performance is made against this index. The benchmark is a recognized index of stocks which should not be taken as wholly representative of the Company’s investment universe. The Company’s investment strategy does not follow or “track” this index and therefore there may be a degree of diversity in performance from the main index stated. (Source: Morningstar) 4 Arithmetic difference between the net asset value and the index 4 | FOR PROFESSIONAL CLIENTS/QUALIFIED INVESTORS ONLY - NOT FOR RETAIL USE OR DISTRIBUTION
2014 Russell 2000 sector performance in GBP For the twelve month period ending 31 December 2014 Russell 2000 Sector performance 27% 24% 24% 16% 14% 9% 6% 5% -35% Health Care Consumer Utilities Financial Technology Consumer Materials & Producer Energy Staples Services Discretionary Processing Durables Source: Wilshire. 5 | FOR PROFESSIONAL CLIENTS/QUALIFIED INVESTORS ONLY - NOT FOR RETAIL USE OR DISTRIBUTION
2014 sector performance in GBP For the twelve month period ending 31 December 2014 Sector performance Portfolio 40% 39% Russell 2000 27% 24% 24% 22% 21% 20% 16% 15% 14% 11% 9% 8% 6% 5% -35% -41% Health Care Consumer Utilities Financial Technology Consumer Materials & Producer Energy Staples Services Discretionary Processing Durables Source: Wilshire. The portfolio is an actively managed portfolio; holdings, sector weights, allocations and leverage, as applicable are subject to change at the discretion of the Investment Manager without notice. The above data excludes cash and gearing. 6 | FOR PROFESSIONAL CLIENTS/QUALIFIED INVESTORS ONLY - NOT FOR RETAIL USE OR DISTRIBUTION
2014 performance attribution in GBP For the one year period ending 31 December 2014 Stock : +4.41% 1 Attribution Summary Stock attribution (relative to Russell 2000) Sector : -0.86% Average Impact Average Impact Positive contributors Return (%) Negative contributors Return (%) Weight Diff (%) (%) Weight Diff (%) (%) Knight Transportation 96.79 1.09 0.75 Quiksilver -65.70 0.45 -0.83 Marcus & Millichap 137.04 0.79 0.74 Ascent Media -34.29 1.24 -0.70 Taminco 36.65 1.76 0.54 Resolute Energy -67.75 0.57 -0.62 RLJ Lodging Trust 51.67 1.51 0.53 Tidewater -40.59 1.04 -0.61 HFF 51.41 1.32 0.53 Laredo Petroleum -52.23 0.19 -0.50 Sector attribution (relative to Russell 2000) 1.5% 0.8% 0.6% 0.5% 0.5% 0.4% 0.3% 0.2% -1.2% Financial Materials & Energy Technology Producer Consumer Consumer Utilities Health Care Services Processing Durables Staples Discretionary Source: J.P. Morgan Asset Management, Wilshire Atlas. The above data excludes cash and gearing. Past performance is not a guarantee of future results. The inclusion of the securities mentioned above is not to be interpreted as recommendations to buy or sell. 7 | FOR PROFESSIONAL CLIENTS/QUALIFIED INVESTORS ONLY - NOT FOR RETAIL USE OR DISTRIBUTION
JPMorgan US Smaller Companies Investment Trust plc: Annualised Performance As of 31 March 2015 Since FY Q1 One Three Five Ten 11/08 * 2014 2015 year years years years JPM US Smaller Companies IT share 5.6% 11.4% 20.4% 23.1% 19.8% 25.9% 11.3% price 1 JPM US Smaller Companies IT net 12.8% 11.5% 23.4% 20.9% 19.5% 24.5% 10.0% asset value 2 Russell 2000 Index Net (£) 3 11.1% 9.5% 21.2% 18.8% 14.7% 18.5% 11.2% Excess return 4 1.7% 2.0% 2.2% 2.1% 4.8% 6.0% -1.2% Past performance is not necessarily indicative of future results. *The current portfolio management team assumed responsibility of the portfolio November 2008. These figures are run from 30 November 2008 through 31 March 2014. 1 Change in share price with net dividends, if any, reinvested (Source: Morningstar). 2 Change in net asset value per share with net dividends, if any, reinvested (Source: Morningstar). 3 Change in the Index with net income reinvested, in sterling terms. Comparison of the Company’s performance is made against this index. The benchmark is a recognized index of stocks which should not be taken as wholly representative of the Company’s investment universe. The Company’s investment strategy does not follow or “track” this index and therefore there may be a degree of diversity in performance from the main index stated. (Source: Morningstar) 4 Arithmetic difference between the net asset value and the index 8 | FOR PROFESSIONAL CLIENTS/QUALIFIED INVESTORS ONLY - NOT FOR RETAIL USE OR DISTRIBUTION
Q1 2015 performance attribution in GBP For the QTD period ending 31 March 2015 Stock : +2.47% 1 Stock attribution (relative to Russell 2000) Attribution Summary Sector : -0.37% Average Impact Average Impact Positive contributors Return (%) Negative contributors Return (%) Weight Diff (%) (%) Weight Diff (%) (%) Freescale Semiconductor 69.69 1.18 0.62 Career Education -24.09 1.16 -0.44 Patrick Industries 48.72 1.36 0.47 Rovi -15.33 1.44 -0.33 Advent Software 51.21 1.18 0.44 Ascent Media -21.00 0.90 -0.32 Cinemark Holdings 33.86 1.43 0.30 Tidewater -37.39 0.52 -0.27 Drew Industries 30.72 1.24 0.23 First Of Long Island -4.22 1.34 -0.21 Sector attribution (relative to Russell 2000) 1.2% 0.9% 0.8% 0.3% -0.1% -0.1% -0.1% -0.2% -0.5% Consumer Materials & Financial Energy Utilities Technology Producer Consumer Health Care Discretionary Processing Services Durables Staples Source: J.P. Morgan Asset Management, Wilshire Atlas. The above data excludes cash and gearing. Past performance is not a guarantee of future results. The inclusion of the securities mentioned above is not to be interpreted as recommendations to buy or sell. 9 | FOR PROFESSIONAL CLIENTS/QUALIFIED INVESTORS ONLY - NOT FOR RETAIL USE OR DISTRIBUTION
Sector weightings As of March 31, 2015 Sector absolute and relative 1 weights 24.7% 22.4% Absolute Relative 15.6% 10.3% 9.8% 8.4% 7.7% 3.7% 3.0% 2.9% 2.8% 2.6% 0.1% -0.2% -0.3% -1.5% -4.8% -7.4% Financial Consumer Producer Materials & Technology Health Care Consumer Utilities Energy Services Discretionary Durables Processing Staples Source: Wilshire. 1 Reflects relative position to the Russell 2000 Index. 10 | FOR PROFESSIONAL CLIENTS/QUALIFIED INVESTORS ONLY - NOT FOR RETAIL USE OR DISTRIBUTION
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