The £1.5 billion JPM UK Equity Core fund is deliberately avoiding any active tilt toward a small and mid-cap recovery in British equities, according to lead manager Callum Abbot, who says the portfolio’s current composition reflects a sober reading of where returns have consistently been generated over the past decade.
As of March 31, 2026, more than 80% of the fund’s assets sit in companies with market capitalisations above $10 billion, with just 1.4% invested in stocks below $1 billion, a positioning that stands in marked contrast to managers who have been building exposure to smaller companies in anticipation of an eventual rerating.
Abbot said in recent commentary that if you look at the 2010s you would have wanted to be overweight smaller and mid-cap companies, but in the past five years the correct position has been to focus on large caps, a view that the data strongly supports.
Over one, three, and five years to the end of April 2026, the FTSE 100 has outperformed both the FTSE 250 and the FTSE Small Cap ex Investment Companies index, with the FTSE 100 returning 25.8% in 2025 alone against 13% for the mid-cap index and 10.9% for the small-cap benchmark.
Abbot acknowledged that small and mid-cap stocks look attractively valued on a cyclically adjusted basis but argued that valuation alone is insufficient justification for repositioning without a clear and credible catalyst to close the discount.
The manager was asked specifically about UK housebuilders, a sector trading at a discount to book value that he described as normally trading at around 1.4 times book, suggesting the shares could theoretically double when the cycle turns.
His response was characteristically measured, saying he would never use the phrase never about any sector but that close monitoring is required before conviction can be established, and that the fund has not yet found a compelling enough entry argument to justify moving meaningfully into the space.
Banks were raised as a contrasting case study, with Abbot noting that many UK equity managers in the 2010s declared financials structurally defunct and refused to own them, only to miss some of the best-performing stocks in the FTSE since 2023.
The JPM UK Equity Core fund sits within the IA UK All Companies sector and has built a substantial asset base of £1.5 billion on the back of consistent large-cap relative performance and a disciplined process that has avoided the chasing of thematic rotations.
Outside of work, Abbot cited three young children as keeping him occupied, alongside a sustained interest in sport and reading that he described as long-standing alongside his investment career.
