Fund of the week: JP Morgan European Fledgling Trust

Convinced that equities are as cheap as they'll get, fund managers Jim Campbell and Francesco Conte are gearing up - borrowing moiney to buy stocks - for the first time in two years.

Jim Campbell is putting his money where his mouth is. Convinced that equities are as cheap as they'll get, he and co-manager Francesco Conte are gearing up the JP Morgan European Fledgling Investment Trust for the first time in two years. "Earnings downgrades are slowing, which is typically a good lead indicator that the market has bottomed out", says the Scottish-born economics graduate in Fund Strategy.

Gearing up involves borrowing money to buy stocks and other securities in the hope of boosting returns as asset prices rise. Many funds, such as unit trusts, can't do this, but investment trust rules permit it. As a result, 8% of the trust's assets are now financed through borrowing, with Campbell and Conte targeting growth stocks in the pharmaceutical, healthcare, and IT software and services sectors.

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