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Fund Profile

JPMorgan Asia Growth & Income 15 March 2022

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) aims to offer exposure to the best long-term growth prospects in Asia. The managers, Ayaz Ebrahim and Robert Lloyd, select companies for the portfolio based on the stock-specific analysis done by a team of over 40 analysts, mostly specialised by sector. The basic strategy is to identify companies in a position to grow their earnings faster than the market over the long run and hold for the long term, ignoring short-term market noise and wavering valuations.

The long-term Performance has been excellent, although in Q4 2021 and Q1 2022 markets have sold off. Many of the biggest contributors to outperformance in the previous years have underperformed the market. On a bottom-up basis, the team expect better than average returns from Asian markets over the next five years after this sell-off, with double-digit annual returns. In keeping with their long-term strategy, the managers have been looking through volatility where they see it as short-term and not driven by changes in fundamentals.

One of JAGI’s key attractions is the Dividend. The trust pays 1% of NAV each quarter, with the board supplementing the natural income from the portfolio with capital reserves. This means Ayaz and Robert are free to invest the portfolio in the best growth opportunities. As a result, over the past five years, the trust is the top-performing Asia Pacific income trust on a total return basis.

Perhaps thanks to this mixture of growth potential and income, JAGI has tended to trade on a premium to its AIC Asia Pacific Equity Income peers (see Discount).

Analyst's View

In our view, JAGI is a great option for core, long-term Asia exposure for investors with either a growth or income objective. The management team’s focus is resolutely on the long-term, which we think is likely to be particularly important in volatile regions such as Asia Pacific. The process does bring with it some biases though. As discussed under Portfolio, there is more exposure to the growth factor rather than value. This is not extreme, and the growth companies JAGI prefers are those with sustainable earnings streams and strong balance sheets rather than speculative stocks. However, it does bring with it a greater sensitivity to rising interest rates than the market and a tendency to be in companies with higher valuations which can hurt returns in falling markets (such as we have just experienced).

Ayaz and Robert believe that over the long, run these sorts of macroeconomic factors will be less important to returns than earnings growth (backed up by research into what has worked in the past). As a result, they have re-examined the case for their holdings and, in aggregate, found the long-term return potential to be enhanced by lower starting valuations. In our view, while macroeconomic headwinds might persist in the short-term, there is still huge long-term growth potential in Asia, which merits having a long-term allocation and looking through the noise.

Bull

  • A substantial dividend yield not dependent on portfolio income
  • Exposure to growth companies and sectors not often offered by income funds
  • Strong track record of outperformance

Bear

  • China is over a third of the benchmark, so investors take single-country risk
  • The willingness to hold expensive stocks could increase the sensitivity to a falling market
  • Active management can lead to periods of underperformance as well as outperformance
Continue to Portfolio
2024 Kepler Income & Growth Rated Fund

This trust has been awarded a rating by Kepler Trust Intelligence for income & growth... Find out more

Fund History

17 Jan 2024 Top of the Pops
We reveal the winners of our investment trust ratings for 2024…
15 Dec 2023 Results analysis: JPMorgan Asia Growth & Income
JAGI delivered another year of benchmark beating returns...
15 Dec 2023 What next for Asia?
India looks expensive, but the region as a whole is attractively valued…
18 Aug 2023 We’re all going on a summer holiday
Sustained tourism demand has fund managers looking to the sector…
10 Aug 2023 Fund Analysis
JAGI offers core exposure to Asia, and is trading on a wide discount relative to its own history…
05 Jul 2023 Silk Road Strife
The Asian narrative has been dominated by the India vs China debate, but on which side of the line have investment trust managers fallen?
23 Jun 2023 Mind games
AI may be dominating headlines but investors need not redraw their portfolios…
09 Jun 2023 Far out
When considering reshaping your portfolio, don’t overlook emerging markets…
13 Mar 2023 (Re)open the floodgates
JAGI’s distinct approach to stock picking means it has maintained exposure to Chinese consumer stocks poised to benefit from the country’s reopening…
11 Jan 2023 Solving the Rubik’s Cube
We reveal the winners of our investment trust ratings for 2023…
06 Jan 2023 Fund Analysis
Asia is arguably cheap, which JAGI may be able to capitalise on with its core approach…
20 Dec 2022 Results analysis: JPMorgan Asia Growth & Income
Asia’s long-term prospects still look strong despite a tough year for markets…
15 Dec 2022 It’s a numbers game
The projected growth, and wealth, of Asian populations supports the long term outlook for the region in spite of a troubled short term outlook for equities everywhere…
02 Nov 2022 The stability dividend
Our analysis shows that trusts paying a regular income suffer less discount volatility...
07 Oct 2022 Are the China contrarians right?
Maybe it’s not all so bad in the world’s second-largest economy…
28 Sep 2022 Mind the gap
While chaos reigns in the short-term for markets, some investors see a growing disconnect between prices and reality...
28 Sep 2022 Slides and Audio: JPMorgan Asia Growth & Income
Download the presentation and listen to the audio from our 'Growth at an unreasonable price' event from 21 September...
31 Aug 2022 Growth at an unreasonable price
Growth has taken a beating as inflation fears have soared, but the tide may be turning and we have six speakers at our next event ready to tell us why…
12 Aug 2022 Buying the discount
Trusts spent over £1bn on discount control in the first half of 2022…
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...
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