Fund Profile

JPMorgan Global Growth & Income 03 March 2020

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

The key aim of JPMorgan Global Growth & Income (JGGI) is to generate total returns in excess of that of the MSCI ACWI over the long term. The investment managers (Helge Skibeli, Rajesh Tanna and Timothy Woodhouse) look to achieve this by identifying the companies around the world which will be the long-term structural winners from a number of key secular themes.

Since 2016, the trust also aims to pay out at least 4% of NAV in income each year, based on the NAV at the start of the year and paid in quarterly instalments. This can be paid out of capital, which means the investment managers have not had to change their high-conviction, valuation-sensitive approach to stock-picking. It also means the portfolio is considerably different to those of most peers in the AIC Global Equity Income sector because the investment managers can hold companies in high-growth sectors which don’t typically pay high dividends.

Due to the ability to hold growth companies, the trust has a strong track record for capital appreciation relative to the sector. Over the past five years JGGI has significantly outperformed the average trust in the AIC Global Equity Income peer group, as we discuss in more detail in the Performance section.

Since the change in dividend policy in 2016, JGGI has seen a dramatic turnaround in sentiment and, after reaching lows of close to a 16% discount in June 2016, the trust has spent the past two years consistently trading at a premium to NAV before the coronavirus-inspired sell-off saw it fall onto a discount.

Analyst's View

JGGI may appeal to investors looking to diversify outside the UK. As we noted in our article 'Rethinking UK equity income' last year, UK equity income trusts are highly concentrated in a few big names, which we think is a potential cause for concern for investors. Just eight companies made up over 50% of the yield of the FTSE 100, according to Bloomberg figures from August 2019, many of which have quite uncertain futures.

With just 4.9% of the portfolio in the UK and high exposure to growth sectors which are less held by the typical UK equity income fund, JGGI is a great diversifier for income-reliant investors who don’t want to have ‘all their eggs in one basket’. In particular, the high weighting to information technology and low weighting to consumer defensives, energy and materials are differentiators from the average UK equity income fund. Furthermore, the ability to pay dividends from capital means that investors can have a high degree of confidence in the payout being maintained.

JGGI is currently trading at a 4.3% discount, which may add to its appeal alongside the yield, diversification and total return potential it offers, as well as the trust’s tendency to trade on a premium in recent years until the coronavirus outbreak saw indiscriminate selling in global markets.

bull bear
High visibility on future dividends, with an attractive level of 4% of NAV paid each year Gearing can magnify losses in falling markets as well as gains in rising markets
Provides income from sectors, geographies and growth stocks which diversify well UK Equity income funds The income is not 'natural', which some investors prefer
The cheapest OCF in the sector There is a performance fee, which some may not like
Continue to Portfolio
2022 Kepler Income & Growth Rated Fund

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

Fund History

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...
View all

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