Investment trusts for the long-term

Today’s unprecedented pace of technological change is creating attractive investment opportunities across global markets and sectors. One of the most effective ways to capitalise on this growth potential is through investment trusts.

Investors increasingly seem to agree. In 2020, equity-oriented investment trusts raised £3.2 billion, a substantial leap from 2019’s record of £2.2 billion, with the number of equity investment trusts raising more than £50 million increasing from eight to 20.¹

An investment trust is a professionally managed, closed-ended, pooled investment vehicle that offers a number of valuable benefits to investors, including:

Closed-end Structure: Investment trusts tend to have a closed-end structure. By fixing the number of shares issued, the investment trust’s portfolio manager has the freedom to execute buy and sell decisions when the timing is most advantageous, rather than being subject to the vagaries of when investors decide to invest or sell trust shares. (Investors should note that closed-end trusts may trade at a premium or discount to their net asset value, potentially resulting in investors buying assets at a price above their market value or selling shares at a price below the underlying assets’ true market value.)
Stock Market Listing: Investment trust shares are listed on the London Stock Exchange, which allows investors to conveniently buy or sell shares, and easily find the current price of shares.
Ability to Borrow: Investment trusts can borrow to increase the amount of money invested (“gearing”), allowing them to quickly take advantage of emerging opportunities without having to sell existing holdings. Gearing can enhance returns during rising markets and exacerbate losses during declining markets.
Accountability: An independent board of directors, elected by shareholders, oversees the operation and management of investment trusts. The board also has oversight of a fund manager’s performance and the power to replace an underperforming manager. Shareholders are provided the right to vote on all substantive issues that impact the trust’s management.
Competitive Pricing: Investment trusts typically have lower operating costs than open-ended funds, which may result in greater wealth accumulation over the long-term.
Steadier Income: An investment trust has the ability to retain up to 15% of its income in a given year, which can then be used to supplement income when needed in future years and help provide level income payments to investors.

Why J.P. Morgan Asset Management

Successfully tapping global investment opportunities via investment trusts requires an experienced and trusted partner with a long-term track record of strong performance.

At J.P. Morgan Asset Management, our singular goal for more than 150 years has been to help our clients build stronger portfolios. By working with us, institutions, intermediaries, and individual investors have benefited from key advantages unique to J.P. Morgan Asset Management, including:

Size and scale: Responsible for USD 2.6 trillion in assets globally, J.P. Morgan Asset Management is supported by over 1,000 investment professionals with an annual research budget of USD 340 million, which is used for the expressed purpose of uncovering new investment opportunities and mitigating portfolio risks.²
Wide range of choices: Our investment trusts cover a broad range of global markets, and investment styles to meet investors’ varied investment objectives and risk profiles.
Performance results: Past performance, of course, should never be used to predict current or future returns. However, we do have a proud record of delivering attractive investment results. For example,
- Our JPMorgan Emerging Markets investment trust is the only trust to be awarded a Gold Morningstar Analyst Rating, along with its 5-star Morningstar rating.³
- The JPMorgan Global Growth & Income investment trust was recognized as one of the top performing trusts in utilizing gearing in 2020.⁴
- Four JPMorgan investment trusts were named as “value funds to watch”, including Russian Securities, European-Income, Elect-Managed Income, and Global Core Real Assets.⁶
Deep-rooted culture: Sustained outperformance is a function of an enduring culture. Maintaining the continuity of the people and processes that created a record of historical achievement is foundational to future success.

Getting started

Long-term investors interested in the growth potential of global companies positioned to thrive amid the “fourth industrial revolution”, or those that simply want to build a stronger portfolio, should contact their financial adviser. For more information about the full range of J.P. Morgan investment trusts, including investment objectives, risks, and fees click here.

Take the long view

¹ https://citywire.co.uk/investment-trust-insider/news/gavatar-are-investment-trusts-really-all-that-closed-ended/a1466569
² https://am.jpmorgan.com/gb/en/asset-management/per/about-us/
³ https://www.morningstar.co.uk/uk/news/213910/3-emerging-markets-investment-trusts.aspx. © 2021 Morningstar, Inc. All rights reserved. The information contained herein: (1) is proprietary to Morningstar and/or its content providers; (2) may not be copied or distributed; and (3) is not warranted to be accurate, complete, or timely. Neither Morningstar nor its content providers are responsible for any damages or losses arising from any use of this information. Past performance is no guarantee of future results.
⁴ https://www.trustnet.com/news/5253585/the-investment-trusts-that-made-the-best-use-of-gearing-in-2020
⁵ https://www.trustnet.com/news/5053079/revealed-the-funds-that-have-surged-past-their-benchmarks-over-the-past-decade
⁶ https://citywire.co.uk/investment-trust-insider/news/the-rush-to-value-here-are-the-investment-trusts-to-watch/a1452797
⁷ https://www.jpmorgan.com/commercial-banking/solutions/asset-management

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This is a marketing communication and as such the views contained herein do not form part of an offer, nor are they to be taken as advice or a recommendation, to buy or sell any investment or interest thereto. Reliance upon information in this material is at the sole discretion of the reader. Any research in this document has been obtained and may have been acted upon by J.P. Morgan Asset Management for its own purpose. The results of such research are being made available as additional information and do not necessarily reflect the views of J.P. Morgan Asset Management. Any forecasts, figures, opinions, statements of financial market trends or investment techniques and strategies expressed are unless otherwise stated, J.P. Morgan Asset Management’s own at the date of this document. They are considered to be reliable at the time of writing, may not necessarily be all inclusive and are not guaranteed as to accuracy. They may be subject to change without reference or notification to you. It should be noted that the value of investments and the income from them may fluctuate in accordance with market conditions and taxation agreements and investors may not get back the full amount invested. Changes in exchange rates may have an adverse effect on the value, price or income of the products or underlying overseas investments. Past performance and yield are not reliable indicators of current and future results. There is no guarantee that any forecast made will come to pass. Furthermore, whilst it is the intention to achieve the investment objective of the investment products, there can be no assurance that those objectives will be met.

J.P. Morgan Asset Management is the brand name for the asset management business of JPMorgan Chase & Co. and its affiliates worldwide. To the extent permitted by applicable law, we may record telephone calls and monitor electronic communications to comply with our legal and regulatory obligations and internal policies. Personal data will be collected, stored and processed by J.P. Morgan Asset Management in accordance with our EMEA Privacy Policy www.jpmorgan.com/emea-privacy-policy. Investment is subject to documentation. The Annual Reports and Financial Statements, AIFMD art. 23 Investor Disclosure Document and PRIIPs Key Information Document can be obtained free of charge from JPMorgan Funds Limited or www.jpmam.co.uk/investmenttrust.

This communication is issued by JPMorgan Asset Management (UK) Limited, which is authorised and regulated in the UK by the Financial Conduct Authority. Registered in England No: 01161446. Registered address: 25 Bank Street, Canary Wharf, London E14 5JP.

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