Complete your registration today for a chance to win £50 John Lewis vouchers in our weekly draw Enter now
Fund Profile

JPMorgan European Growth & Income 28 February 2023

Disclaimer

Disclosure – Non-Independent Marketing Communication

This is a non-independent marketing communication commissioned by JPMorgan European 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
A new version of this profile is available. View Latest
Overview

JPMorgan European Growth & Income (LON:JEGI) aims to provide a core European equity exposure designed to deliver long-term outperformance of European equities without any surprises. The portfolio is diversified across more than 90 holdings and typically should have a beta of one to the index. JEGI’s structure was simplified in February 2022 from two share classes into a single share class following the approval of shareholders. The former ‘growth’ share class is the surviving share class, and its objective and portfolio carry on in the new simplified structure.

JEGI pays quarterly dividends, each equivalent to 1% of the closing net asset value of the preceding financial year. For the current year JEGI will pay four dividends of 1p, with the last of these payable in March 2023. This is equivalent to a yield of 4.3% on the current share price.

JEGI’s risk-controlled approach does not mean that the portfolio does not evolve, as the team’s investment process involves regular reassessment of the portfolio and the universe of investable stocks. So while the three key portfolio company characteristics of quality, value and momentum remain constant, there is also a constant reassessment of which companies meet those criteria. As a result, the portfolio will tend to have a lower forward P/E ratio, higher return on invested capital and greater earnings momentum than the index. This is combined with a conservative approach to gearing, which is currently at 3%.

JEGI’s discount of c. 11% is underpinned by a performance-related tender mechanism that will be triggered if the trust underperforms its benchmark over five years, with the current performance measurement period running through until 2027.

Analyst's View

We believe that the investment landscape could be undergoing a fundamental shift from that seen over the last five or more years. During that period, very low-cost money helped to justify valuations for growth equities that put many of them out of the reach of JEGI’s portfolio. Higher interest rates have a profound effect on valuations and require flexible thinking when constructing a portfolio. JEGI isn’t chasing big positions in a handful of the fastest-growing stocks in the expectation they will recover, but is instead taking a measured approach to incremental added value with a diversified portfolio, and the team’s emphasis on quality, value and momentum seems well suited to this rather different investment landscape.

JEGI’s current c. 11% discount is wider than the average for the peer group, but there are several factors that could narrow it in the coming year. First, the simplified structure means JEGI is a more straightforward proposition that should have a wider investor appeal; second, it has a long-term performance-based tender offer mechanism; and third, in our view its investment process seems well suited to a higher-interest-rate environment.

Bull

  • Pays quarterly dividends totalling an equivalent of 4% of NAV
  • Investment process suited to a higher-interest-rate environment
  • Discount underpinned by performance-related tender offer

Bear

  • European equities have been out of favour with investors
  • May not capture all the upside in a strong growth market
  • Dividends not always backed by current-year revenue
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

15 May 2024 Why'd you have to go and make things so complicated?
European growth may be more complicated, and positive, than we suspected...
17 Jan 2024 Top of the Pops
We reveal the winners of our investment trust ratings for 2024…
12 Sep 2023 Fund Analysis
JEGI: performing well even as investors remain underweight European equities...
21 Jun 2023 Ça plane pour moi
Some of the world's biggest companies are doing just fine in Europe, yet investors shun the region. Time for a rethink...
17 Mar 2023 A feast for your ISAs – the second course
Dividends, UK small caps, energy and more…
14 Mar 2023 JPMorgan European Growth & Income - Income and growth without compromise
Zenah Shuhaiber
Rewatch this webinar from our month-long online series 'A feast of ideas for your ISA' hosted by the team at Kepler Trust Intelligence throughout March...
Watch Recording
02 Mar 2023 The Devil’s in the demographics
China’s population is in decline - should it turn east or west for inspiration..?
28 Feb 2023 Fund Analysis
JEGI is a core European equity trust designed for all weathers…
17 Feb 2023 A brighter 2023 for European equities
Companies on the continent may have reason to feel cautiously optimistic…
11 Jan 2023 Solving the Rubik’s Cube
We reveal the winners of our investment trust ratings for 2023…
29 Nov 2022 Results analysis: JPMorgan European Growth & Income
JEGI’s new structure offers an attractive combination of income and growth potential…
02 Nov 2022 The stability dividend
Our analysis shows that trusts paying a regular income suffer less discount volatility...
20 Oct 2022 Cold winter, bright future
JEGI is well positioned to benefit from any long-term improvement in Europe’s fortunes…
15 Jun 2022 Staying active
We highlight several alternatives to passive investments for investors looking for core exposure in uncertain markets...
14 Jun 2022 Results analysis: JPMorgan European Growth & Income
Major structural changes will make JEGI an appealing core holding for investors of all stripes…
10 Jun 2022 The devil is in the details
JEGI has made some very favourable changes for shareholders…
08 Apr 2022 Fund Analysis
The newly established JEGI offers investors an attractive combination of a high dividend with a core European equity portfolio…
18 Jun 2020 Gimme shelter
As income investors brace for impact we ask which regions and trusts are less likely to cut their dividends in 2020…
09 Oct 2019 Fund Analysis
One of the only income vehicles across the European universe, JETI offers UK investors a unique way to diversify their income…
View all

Welcome to Kepler Trust Intelligence

Please enter a valid email address
{{item.msg}}
Please enter a valid password
{{item.msg}}
Please enter a valid email address
{{item.msg}}
Please check your email. If an account exists you'll be sent instructions on how to reset your password.
To ensure that we are able to provide content which is appropriate for you, please tell us a little about yourself.
Please choose an option
{{item.msg}}
Please enter a company name
{{item.msg}}
Please enter a location name
{{item.msg}}
Please choose an option
{{item.msg}}
Please enter a platform
{{item.msg}}
Please choose an option
{{item.msg}}
Please enter a trust
{{item.msg}}
?
The information contained herein is not for distribution and does not constitute an offer to sell or the solicitation of any offer to buy any securities in the United States to or for the benefit of any United States person (being residents of the United States or partnerships or corporations organised under the laws thereof). The investment funds referred to herein have not been registered in the United States under the Investment Company Act of 1940 and units or shares of such funds are not registered in the United States under the Securities Act of 1933.
Please confirm
{{item.msg}}
Please select an option
{{item.msg}}
See benefits
A free Kepler Trust Intelligence account allows you to access premium content including the ‘Kepler View’ – our verdict on the trusts we cover – and historical research so you can see how our view has changed over time. An account also unlocks useful facilities like the ‘follow’ button which lets you keep track of the trusts you’re interested in and as a logged in user you can also download PDFs of our research, and choose the layout of the page you’re reading to suit your preference. We will not share your details unless you give us permission to do so, and we won’t bombard you with emails – we only send one a week.
Please select an option
{{item.msg}}
Please enter your first name
{{item.msg}}
Please enter your last name
{{item.msg}}
Please enter a valid email address
An account already exists with this email - have you forgotten your password?
{{item.msg}}
Please enter a valid password
{{item.msg}}
Please enter a valid password
{{item.msg}}
How will this information be used? Your answers help us to tailor our content to relevant investment trusts, and to ensure that the asset allocation and portfolio strategy research we produce is appropriate to our userbase.
Our Website uses Cookies Cookies are small text files held on your computer. They allow us to give you the best browsing experience possible and mean we can understand how you use our site. Some cookies have already been set. You can delete and block cookies, but parts of our site won’t work without them. By using our website you accept our use of cookies. For further information please refer to the Kepler Privacy Notice.
Need help?

One more thing...

Did you know, you can 'follow' individual trusts on Kepler Trust Intelligence? Use the functions below to set up alerts and we'll send you research and updates on your chosen trusts.

Suggested trusts to follow

Browse all funds
Need help?
Current Site Kepler Trust Intelligence is produced by the investment companies team at Kepler Partners and is the UK’s premier source of detailed qualitative research on investment trusts. Absolute Hedge is a market leading UCITS research database providing proprietary research on funds, themes and strategies in the UCITS space. Kepler Liquid Strategies is a Dublin domiciled UCITS fund platform featuring a number of best-of-breed fund managers. Kepler Partners is a corporate advisory and asset raising boutique specialising in the regulated funds market in Europe and investment trusts in the UK.