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Fund Profile

JPMorgan Global Growth & Income 11 November 2022

Disclaimer

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.

Overview
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Overview

JPMorgan Global Growth & Income (JGGI) takes a high-conviction approach to investing in the broad and diversified global equity markets, the managers selecting from the best ideas of JPMorgan’s huge equity research platform in order to provide a balanced core portfolio. The structure of the trust is designed to deliver both capital growth and income to investors while affording the managers full freedom to implement their investment approach. JGGI recently completed a merger with Scottish Investment Trust (SCIN) on 01/09/2022, which saw net assets grow from £723m to £1.3bn, leading to JGGI’s graduation to the FTSE 250 Index and a reduction in Charges. On 27/10/2022 JGGI’s board published proposals to merge with JPMorgan Elect, which would be completed on similar terms and see net assets grow to above £1.7bn (using 25/10/2022 valuations).

There has been no change to the investment approach, JGGI’s portfolio continuing to be managed by Helge Skibeli, Rajesh Tanna and Timothy Woodhouse, who remain focussed on delivering superior returns to the benchmark MSCI All Country World Index. The Dividend policy means the board has committed to pay out 4% of the financial year-end NAV as a dividend, using capital if necessary. As discussed under Portfolio, this affords the managers the freedom to invest wherever they see the best total returns without yield, i.e. in lower-income-producing but growthier companies which are often off limits to their equity income peers.

As a result, JGGI has performed well over five years whilst also delivering a yield to investors, achieving a total return of 60.4%, compared to the global equity income peer group’s 33.1% and the MSCI All Country World Index benchmark’s 45.6%.

The trust is currently trading at a Discount of 2.5%, significantly off its five-year average premium of 2.1%.

Analyst's View

JGGI’s investment strategy is unchanged following the merger with SCIN, and the trust remains one of the more diversified options within the global growth and income sector. This can be attributed to the managers’ ability to invest across a more diversified universe of stocks due to the revenue and capital account being used to finance a dividend of 4% of financial year-end NAV. This can result in some level of dividend volatility, and in times of uncertainty may restrict dividend progression. However, we believe the strong long-term performance of the trust, which benefits from the ability to capture the capital growth generated by some lesser-featured names in the global equity income space, more than compensates for this. This is testament to the managers’ ability to gradually shift the portfolio towards a more ‘core’ offering.

The reduction in charges has also been a major benefit for the trust, along with the additional visibility, liquidity and opportunities that its inclusion in the FTSE 250 Index will provide. We believe that the current discount level is in part reflective of the perceived uncertainty around the merger and short-term adjustment to ownership. This may therefore offer an opportune entry point for longer-term investors.

Bull

  • Relative performance has remained strong during a prolonged period of volatile market conditions
  • Ability to pay dividend from capital allows for a more flexible investment strategy than peers have
  • Merging of assets has reduced the fees to be paid over the long term

Bear

  • May underperform peers during periods of strong value performance
  • Dividend tied to NAV may be impacted if the NAV were to be affected by market movements towards the financial year end
  • Ability to invest in growthier markets could lead to a higher volatility of returns than the peer group might see
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…
10 Jan 2024 Definitely maybe
Fund flows and discounts may shed some light on a once-in-a-generation opportunity…
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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