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) uses detailed fundamental research done by a team of over 40 investment professionals to identify superior growth companies in the Asia Pacific region. The team aims to take a long-term view, and looks through the volatility and unpredictability often found in the economies, markets and politics of Asian countries.

As such, the process depends less on one or a few people making the right calls again and again, but more on a wide, experienced team implementing a sound strategy consistently. The trust has performed extremely well in recent years with minimal levels of gearing. As we discuss in the Performance section, JAGI is the second-best performer of all Asia Pacific trusts (growth or income) over five years, almost entirely down to strong stock selection. It has outperformed a passive investment in its benchmark index in each of the past seven years.

JPMorgan Asia Growth & Income, renamed from JPMorgan Asian in February 2020, pays 1% of NAV each quarter as a dividend – out of capital if necessary. Since implementing this policy in 2017, the discount has generally been in single digits, having been in double digits previously – it is now 1.3%.

The portfolio continues to be managed – as it has always been – for capital growth, despite the new dividend policy. JAGI offers more exposure to ‘growthier’ sectors, such as information technology and consumer discretionary, than the typical income trust. This has helped JAGI to outperform the other AIC Asia Pacific Income trusts on a total-return basis while offering a comparable yield.

Analyst's View

JAGI offers a highly attractive combination of growth and income. The focus on capital growth in stock selection means that the trust has exposure to areas of high secular growth such as information technology and consumer discretionary, while the dividend policy means that it offers a considerable income. In particular, as we discuss in the Dividend section, we think it offers diversification to the biases of the average UK equity income fund.

However, Asia is an inherently volatile continent, as early 2020 reminded us. Following on from the US–China trade war of 2016 and beyond and the Hong Kong protests of 2019, COVID-19 is just the latest macroeconomic and political issue to have roiled markets. We can’t see how a fund manager could be expected to generate alpha consistently by correctly charting the course of these events and positioning their portfolio appropriately. The bottom-up, stock-specific approach of JAGI, along with a time horizon long enough to allow most macro and political movements to wash out, offers a solution to this problem.

Asia Pacific income trusts have tended to trade close to par in recent years. As such, we don’t think the 1.3% discount is overly tight and would expect JAGI to trade close to par over the medium term.

bull bear
A dividend yield not dependent on portfolio income Due to investing for capital growth, might not provide the defensive qualities of a traditional income strategy
Tilt to growth areas not commonly focused on by equity income portfolios China is over a third of the benchmark, so investors take some single-country risk
Strong and consistent track record of outperformance through stock selection Asia remains a volatile region with serious political and economic risks
Continue to Portfolio

Fund History

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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