JPMorgan Global Growth & Income plc focuses on investing in the best ideas from across the world’s stock markets, along with a predictable quarterly income.
The extraordinary events of the past three years – pandemic and lockdowns, followed by the war in Ukraine, and resultant high oil, gas and commodity prices – sparked protracted market turbulence which has left many investors bitterly disappointed by the performance of their investments. JPMorgan Global Growth and Income (JGGI) has distinguished itself over this period, by performing consistently well and delivering capital growth and income while other investments have floundered.
The extraordinary events of the past three years – pandemic and lockdowns, followed by the war in Ukraine, and resultant high oil, gas and commodity prices – sparked protracted market turbulence which has left many investors bitterly disappointed by the performance of their investments. The significant declines in portfolio valuations experienced by many have been especially burdensome in the past year or so, when rapidly rising food and energy prices have sent the cost-of-living skyrocketing, putting unwelcome and unsustainable pressure on household budgets.
JPMorgan Global Growth and Income (JGGI) has distinguished itself over this period, by performing consistently well while other investments have floundered. The Company delivered significant outright gains in NAV terms in 2020 and 2021, and sustained only a small loss in 2022, decisively outperforming its benchmark and its peers, over each of these years. This outperformance has continued so far in 2023. In the three years to end March 2023, JGGI shareholders have realised an average annualised return of 17.1% in NAV terms, well above the benchmark return of 10.8% on the same basis.1
Investment performance in both growth and value markets
In 2020, growth stocks, especially tech companies, saw very substantial gains and outperformed the market as reliance on technology escalated during the pandemic. The following eighteen months or so saw value and cyclical names outpace growth stocks once widespread vaccinations facilitated the return to a more normal way of life and an associated improvement in the economic outlook. More recently, rapidly rising interest rates and the prospect of recession in the US, the UK and other developed economies have benefitted defensive names, while suppressing the valuations of growth stocks. JGGI’s ability to maintain returns in the face of such significant shifts in market sentiment attests to the managers’ ability to act quickly to capitalise on opportunities as the market environment evolves.
Although dividend payments are not guaranteed, JGGI has continued to pay an attractive, competitive and rising dividend. The dividend is paid quarterly and has been a reliable source of income helping shareholders meet their commitments and sustain their lifestyles - particularly important to many investors at the moment, given rapidly increasing living expenses.
Predictable income from dividend payments and revenue reserves
Specifically, JGGI payed a dividend of at least 4% of NAV at the end of the previous financial year. The dividend can be part-funded from the Company’s capital and revenue reserves, as well as portfolio income. However the dividend paid may also exceed the gains of the trust resulting in erosion or loss of the capital invested. Luckily, JGGI’s reserves are substantial, and capable of fully funding several years’ dividend pay-outs if necessary. This means that its managers do not need to confine their investment universe to income-producing stocks in order to meet the Company’s income objective. They are also free to invest in non-dividend paying stocks wherever the investment case and valuations are compelling.
JGGI’s managers attribute the Company’s impressive performance to two factors - its investment strategy, and the quality and depth of JPMorgan Asset Management’s extensive global equity research team which supports this strategy. The managers target the world’s high-quality companies benefiting from structural trends which will ensure they are global leaders in their respective markets over the long term, regardless of short-term market fluctuations. But price is also a key consideration - they will only invest in such companies when valuations are attractive. Risk management is a constant focus, with the aim of providing steady returns over time. The managers do not want to expose shareholders to large and painful fluctuations of their portfolios from year-to-year. To this end, the portfolio is well-diversified across sectors and regions and balanced between quality growth and more defensive businesses. The trust also uses borrowing to gear the portfolio within limited ranges under normal market conditions. Whilst gearing may magnify gains it also can increase losses, therefore Gearing is used cautiously.
The insights and recommendations of JPMorgan’s extensive team of 90 research analysts are an integral part of JGGI’s careful stock selection process. Based in the US, UK, Europe, Asia and emerging markets, these analysts have an average of almost 20 years’ industry experience. Between them, they conduct detailed analysis and valuations of 2,500 companies, across 17 sectors. The quality of their research is enhanced by the analysts’ collaborative approach. They are in regular formal and informal contact with colleagues around the world, and across sectors, to ensure they have the broadest, most in-depth understanding of their sectors, at the global level. JGGI’s managers make full and constant use of this rich, well-funded research resource as they seek to identify the most compelling investment opportunities.
With recession a real possibility in several major economies, inflation still at record highs and global geo-political tensions rising, the near-term investment environment is likely to remain challenging and volatile. However, JGGI’s managers believe equities are a great place to be long term, regardless of the prevailing macroeconomic and market environment. And the Company’s track record suggests investors seeking consistent competitive returns and outperformance, combined with regular and predictable dividends, can rely on JGGI as the bedrock of their diversified, global investment portfolio.
1 Source: J.P. Morgan Asset Management, see below the latest full performance table for The JPMorgan Global Growth and Income plc.
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Summary Risk Indicator
The risk indicator assumes you keep the product for 5 year(s). The risk of the product may be significantly higher if held for less than the recommended holding period
Performance
Past performance is not a guide to current and future performance. Source: J.P. Morgan Asset Management/Morningstar as at 05/05/2023. Net asset value performance data has been calculated on a NAV to NAV basis, including ongoing charges and any applicable fees, with any income reinvested, in GBP.
Investment Objective: To provide superior total returns and outperform the MSCI All Country World Index over the long-term by investing in companies based around the world. The Company makes quarterly distributions, that are set at the beginning of each financial year. On aggregate, the intention is to pay dividends totalling at least 4% of the NAV at the time of announcement. The manager is focused on building a high conviction portfolio of typically 50 - 90 stocks, drawing on an investment process underpinned by fundamental research. Portfolio construction is driven by bottom up stock selection rather than geographical or sector allocation. Currency exposure is predominantly hedged back towards the benchmark. The Company uses borrowing to gear the portfolio within a range of 5% cash to 20% geared under normal market conditions. The Company will repurchase its shares with the aim of maintaining an average discount of around 5% or less calculated with debt at par value.
Key Risks: Exchange rate changes may cause the value of underlying overseas investments to go down as well as up. Investments in emerging markets may involve a higher element of risk due to political and economic instability and underdeveloped markets and systems. Shares may also be traded less frequently than those on established markets. This means that there may be difficulty in both buying and selling shares and individual share prices may be subject to short-term price fluctuations. Where permitted, a Company may invest in other Investment Funds that utilise gearing (borrowing) which will exaggerate market movements both up and down. This Company may use derivatives for investment purposes or for efficient portfolio management. External factors may cause an entire asset class to decline in value. Prices and values of all shares or all bonds and income could decline at the same time, or fluctuate in response to the performance of individual companies and general market conditions. This Company may utilise gearing (borrowing) which will exaggerate market movements both up and down. This Company may also invest in smaller companies which may increase its risk profile. The share price may trade at a discount to the Net Asset Value of the Company.
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 in English from JPMorgan Funds Limited or at 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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