Fund Research

JPMorgan Global Growth & Income

Last update 01 August 2019

Disclosure – Non-Independent Marketing Communication

This is a non-independent marketing communication commissioned by JPMorgan Global Growth & Income . The report has not been prepared in accordance with legal requirements designed to promote the independence of investment research and is not subject to any prohibition on the dealing ahead of the dissemination of investment research.

Investment objective

The investment objective is to achieve income and capital growth from world stock markets and aims to achieve this objective by holding a diversified portfolio of investments in which the portfolio manager has a high degree of conviction.

As at:

23/07/2019

Group/Investment

JPMorgan Global Growth & Income

Ticker

JPGI

Management Company

JPMorgan Asset Management

Manager Name

Timothy Woodhouse; Helge Skibeli; Rajesh Tanna

Association of Investment Companies (AIC) Sector

Global Equity Income

12 Mo Yield

4%

Dividend Distribution Frequency

Quarterly

Latest Market Capitalisation

£457,593,220

Latest Net Gearing (Cum Fair)

8%

Latest Ongoing Charge Ex Perf Fee

0.56%

Turnover Ratio

75.8%

Shares Outstanding

133,021,285

(Discount)/Premium (Cum Fair)

2.0%

Daily Closing Price

344p

JPMorgan Global Growth & Income aims to provide superior total returns over the long term by investing in companies based around the world which are benefiting the most from key themes in the economy and society.

The themes in the current portfolio include the technological – cloud computing, big data and electric cars – as well as social, for example the growing demand in Asia for financial products and the changing spending habits of millennials.

Since 2018, the board aims to pay out at least 4% of NAV in income each year, based off the NAV at the start of the year and paid in quarterly instalments. This can be paid out of capital, which means the managers, Helge Skibeli, Rajesh Tanna, and Timothy Woodhouse, have not had to change their core, valuation-sensitive approach.

The new dividend policy has seen the trust move to the AIC Global Equity income sector, where it is the second-best performer out of six members over five years in NAV total return terms. Over that period, it has delivered NAV total returns of 81%, compared with the sector average of 55.1%. The MSCI AC World index has returned 80.6% over this time.

The first step of the investment process involves the managers, supported by 81 analysts, creating industry frameworks to determine how companies will respond to structural changes. Next, the team undertakes in-depth analysis looking for companies that are trading at a discount to their forecast intrinsic value which, for the team, is determined by the company’s future cash flow stream. Earnings forecasts are then created over varying time periods and, through understanding a company’s forecast value with the current value of the business, the team is able to create a valuation rankings.

The end result is a diversified portfolio of 81 companies, with the top ten holdings making up just 25% of the portfolio. The industry and geographical exposures are purely a reflection of the managers’ bottom-up stock selection and the research conducted on structural change.

The trust yields 3.7% on a historic basis, but will pay out 4% of the NAV from the start of the 2018 financial year and in future years. Since the introduction of this policy in 2016, the trust has seen a dramatic turnaround in sentiment and, after reaching lows of close to 16% in June of 2016, the trust has spent the past two years consistently trading at a premium to NAV.

William Sobczak

Disclaimer

This report has been issued by Kepler Partners LLP.  The analyst who has prepared this report is aware that Kepler Partners LLP has a relationship with the company covered in this report and/or a conflict of interest which may impair the objectivity of the research.

Past performance is not a reliable indicator of future results. The value of investments can fall as well as rise and you may get back less than you invested when you decide to sell your investments. It is strongly recommended that if you are a private investor independent financial advice should be taken before making any investment or financial decision.

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