Fund Profile

Disclaimer

Disclosure – Non-Independent Marketing Communication

This is a non-independent marketing communication commissioned by JPMorgan Asia 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.

Overview
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Overview

JPMorgan Asia Growth & Income (JAGI) offers a combination of a growth-oriented portfolio and a dividend of 1% of NAV per quarter, paid largely from capital. Paying from capital allows the managers to focus on finding the best total return prospects rather than looking for yield, and means the trust can invest more in high growth sectors and companies than one paying a natural yield.

As we discuss in the performance section, JAGI is the top-performing Asian income trust over five years (although its dividend policy only dates from 2017). Excess returns have generally come from stock selection rather than country or sector allocation, in line with the intentions of the strategy.

The portfolio is managed by Ayaz Ebrahim, Robert Lloyd and Richard Titherington, senior members of JPMorgan’s Emerging Markets and Asia Pacific (EMAP) equities team. They pick the best ideas from a team of over 30 analysts based on the ground in Asia, who set out to identify companies which they believe can grow their earnings faster than the market average over the long run.

JAGI, which was named JPMorgan Asian before February 2020, remains heavily exposed to secular growth in the consumer, technology and financial spheres. However, its relatively balanced sector and country exposure has meant that it has not been a victim of the violent rotations between growth and value that have characterised the past year. JAGI has kept up with the market despite extreme macroeconomic and market volatility.

The discount has steadily narrowed since the 2017 change of dividend policy, and in recent months the shares have traded at a small premium to NAV. At the time of writing the premium is 2.1%.

Analyst's View

JAGI offers an attractive package of high growth potential from a stock selection strategy biased towards growth areas, combined with an income paid from capital. For UK income investors, the fact JAGI delivers an income while investing in information technology and other traditionally low-yielding areas could be of particular interest, as UK equity income portfolios typically have a strong value bias. Meanwhile the trust’s focus on total returns should make it interesting for those seeking to reinvest and grow their capital too.

We note the analyst team are very positive on the earnings outlook for their underlying companies, and believe the long-term macroeconomic outlook for Asia is positive. However, they assess valuations as above average, which we believe increases the short-term risks. We note the EMAP team expects lower returns from the Asian market level than have been seen in recent years, although they believe the growth potential in their portfolio is higher than the market. JAGI also trades on a premium, which could increase the downside risks if Asia falls out of favour. However, we note the discount remained quite narrow even through the darkest days of the pandemic, and JAGI’s unusual offering of income and growth potential could support the discount. We believe Asia remains a highly attractive place to invest for the long run, although higher US interest rates and a strong dollar could provide short-term headwinds, especially considering market valuations. JAGI’s large analyst team and clearly defined process make it a potential core Asian holding.

bull bear
A substantial dividend yield not dependent on portfolio income
The market is expensive relative to history and the portfolio expensive relative to the market
Exposure to high-growth companies not often offered by income funds
Emerging markets could be vulnerable if a strong recovery in the US sees the dollar rise
Strong and consistent track record of outperformance through stock selection
China is over a third of the benchmark, so investors take some single-country risk
Continue to Portfolio

Fund History

07 Jul 2022 Finding opportunities amid mass uncertainty
Panic selling may provide opportunities to JAGI investors moving forward…
07 Jun 2022 Results analysis: JPMorgan Asia Growth & Income
JAGI remains a strong option for Asia investors, despite current headwinds…
15 Mar 2022 Fund Analysis
JAGI’s managers think Asia can deliver in the future after recent market falls…
25 Jan 2022 Focus on the signal, not the noise
Asian stocks may have had a tough 12 months but that doesn’t mean investors should shun the region…
08 Dec 2021 Results analysis: JPMorgan Asia Growth & Income
JAGI’s dividends are at a record high…
24 Nov 2021 Why you should look at companies – not countries – in Asia
Expert investors in the region explain why it pays to ignore the headlines and focus on fundamentals...
18 Oct 2021 Fund Analysis
JAGI’s balanced exposures could suit it for a core role in a portfolio…
02 Jul 2021 Where Asia leads the world
The historic perception of Asian companies lagging their Western peers is being swept away by global leaders in their fields. Here, we discuss the drivers of this shift Eastward and a company that exemplifies this trend…
24 May 2021 Results analysis: JPMorgan Asia Growth & Income
JAGI has outperformed its benchmark on a share price and NAV basis over the six months to 31 March 2021, despite a rocky market environment…
27 Apr 2021 Not the usual suspects
Investors are increasingly seeking a combination of growth and income but with dividends under pressure on the UK and Europe, it makes sense to consider your options further afield…
31 Mar 2021 East End boys and West End girls
Our analysts debate whether the US or Asian stock markets will deliver the best returns over the next decade…
25 Mar 2021 Fund Analysis
JAGI offers a high dividend from a growth-oriented portfolio…
20 Jan 2021 Kepler's top-rated investment trusts for 2021
We update our annual quantitative ratings for investment trusts…
07 Oct 2020 Fund Analysis
JAGI is the top-performing Asia income trust over five years…
24 Sep 2020 Bull in the Chinese market?
The Chinese stock market has been a notable winner thus far in 2020. Should investors stay the course, or take profits?
15 Apr 2020 Kepler Rated: JPMorgan Asia Growth & Income
JAGI offers a high yield and exposure to high growth companies in Asia…
11 Mar 2020 Fund Analysis
JAGI has generated significant outperformance in recent years and offers an attractive yield…
27 Feb 2020 Robbing Peter to pay Paul?
Two of our analysts discuss the growing trend for companies to pay an income out of capital…
21 Aug 2019 All change: a closer look at the AIC's revised sectors
We examine the AIC's revised sector classifications and discuss whether further improvements could be made...
03 Jul 2019 Push-me pull-you
Two contrasting influences are dominating the outlook for Asian markets - we analyse them and how Asia trusts are positioning their portfolios in response...
02 Jul 2019 Fund Analysis
With a team-based approach, JPMorgan Asian has outperformed in each calendar year since 2015...
05 Dec 2018 Surf's up
As rough markets drive share price volatility up, we use a proprietary statistical technique to highlight trusts which are on unusually wide discounts...
04 Dec 2018 Fund Analysis
Recent performance has been impressive, with the trust outperforming in rising and falling markets...
10 Oct 2018 Information overload
Our analysis shows the long term case for emerging markets remains largely unaffected by much of the negative newsflow surrounding the sector...
17 May 2018 Fund Analysis
A low cost trust with a yield of 4.1%, putting it on a competitive footing versus its income focused peers...
17 May 2018 Blast off!
As China A-Shares join the global indices, many investors remain structurally underexposed to this exciting region...
View all

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