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Fund Profile

JPMorgan Global Growth & Income 19 November 2020


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.

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JPMorgan Global Growth & Income Trust has a diverse global portfolio which seeks to provide superior total returns, in excess of its benchmark the MSCI All Cap World Index. The team are able to leverage JPMorgan’s considerable bank of global equity analysts, looking to create a portfolio of the highest-quality companies which are chosen for their exposure to key structural trends (as discussed in detail in the Portfolio section).

Recently JGGI changed its Dividend policy to one which allows it to pay its dividend from capital. It now targets a payout of 4% of its NAV, valued at its financial year end. As a result, the trust has fewer practical restrictions on how it can invest, being able to purchase high-growth but low-income names that its global equity income peers are typically not invested in. This has led to it having a large overweight to the US versus its peers in the AIC Global Equity Income sector.

Performance has been strong versus its peers. JGGI delivered an 81.4% NAV total return over five years, exceeding the peer group average of 51% and marginally ahead of its benchmark’s 79.7%. We discuss this, and the trust’s strong COVID-19 bounce back, in the Performance section.

Seemingly as a result of the new dividend policy and the strong performance versus its peers, JGGI has largely traded at a premium since 2017. It has maintained this premium after the initial outbreak of the COVID-19 pandemic, whilst most of its peers have traded at a discount.

Analyst's View

It is our belief that JGGI offers something refreshing within the global equity income space. We view the ability to pay its dividend through capital as being key for JGGI, freeing it from the more typical high-income names. Not only does this allow it to invest in higher-performing sectors, but it also makes the trust attractive for diversifying an income portfolio.

One of the few ways an income investor can invest in the US while generating competitive yields is through trusts, such as JGGI, which can be creative with their dividends. The sacrifice an investor must make for this is the absence of a guarantee of a progressive dividend. That having been said, it is out opinion that the risk of a more volatile dividend stream is more than made up for by the superior total returns JGGI has demonstrated.

This is, we believe, reflected in JGGI’s current premium. While buying a trust at a premium may be off-putting for some investors, we believe the payoff to be reasonable. This has certainly been the case during the COVID-19 pandemic, where we view the the trust’s investment flexibility as allowing it to come out on top, and it is one of the few positive performers in its peer group. So long as JGGI’s investment process and dividend policy continue to offer advantages, we believe its premium will be justified.

bull bear
Ability to pay dividend out of capital allows for flexibility in investing Dividend growth cannot be guarenteed
Diversifies away from the more traditional equity income allocation Relatively short tenure of management team for the trust
Outperformance versus peers since the COVID-19 crash More highly rated portfolio may underperform peers in a possible post-COVID value rally
Continue to Portfolio

Fund History

29 Sep 2023 Fund Analysis
JGGI has delivered consistently strong performance across multiple time periods…
11 May 2023 Tipping point
Battered growth strategies have staged a comeback recently, but what happens now?
02 May 2023 Fund Analysis
JGGI’s flexible, bottom-up investment approach has led to sector-leading performance over five years…
11 Jan 2023 Solving the Rubik’s Cube
We reveal the winners of our investment trust ratings for 2023…
11 Nov 2022 Fund Analysis
JGGI’s wider-than-average discount may offer long-term investors an opportune entry point following the successful merger with SCIN…
18 Feb 2022 Fund Analysis
JGGI’s flexible approach to income investing has generated strong, sector-leading returns over a volatile 12 months…
19 Jan 2022 Apples and pears
We examine the relationship between the demand for open- and closed-ended funds, and ask whether investor behaviour can be predicted...
22 Dec 2021 No humbug
Our analysts look back at a year of predictions, theories and ideas, and highlight those they think could matter most…
01 Oct 2021 Results analysis: JPMorgan Global Growth & Income
JGGI has generated strong outperformance over its 2021 financial year, effectively navigating the pandemic while still providing an attractive yield…
28 Jul 2021 How are the mighty fallen
Dividend culture as we knew it is dead, according to Kepler's David Johnson, but investment trusts offer a solution...
29 Jun 2021 Fund Analysis
JGGI is now the best-performing trust in the AIC’s Global Equity Income sector, thanks to its managers’ flexible approach to global equity investing…
05 Mar 2021 Results analysis: JPMorgan Global Growth & Income
JGGI is well positioned for the year ahead and offers useful diversification for income hungry investors...
20 Jan 2021 Kepler's top-rated investment trusts for 2021
We update our annual quantitative ratings for investment trusts…
19 Nov 2020 Fund Analysis
JGGI offers a differentiated solution to global equity income investing…
12 Mar 2020 The importance of buying earners*
Our analysis shows that the impact of dividend contributions on long term returns is anything but trivial...
03 Mar 2020 Fund Analysis
JGGI is an attractive option for income-hungry investors…
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…
01 Aug 2019 Fund Analysis
JPMorgan Global Growth & Income combines a strong track record of NAV growth with a robust yield...
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