- 22.2% rise in share price total return
- Benchmark return 11.3% for the full year
- Average annualised NAV return of 16.2%
Shares in JP Morgan Global Growth & Income (JGGI) were little changed at 468p in morning trading as the company’s net asset value (NAV) per share returned 19.1% for the year ended 30 June 2023, well ahead of the MSCI All Countries World Index return of 11.3%, despite stubbornly high inflation and geopolitical tensions.
The global trust completed the mergers of JPMorgan Elect and Scottish Investment Trust in 2022.
The company’s portfolio managers attributed its outperformance in relation to its benchmark to the ‘positive contribution in 14 out of 19 sectors.’
BROAD-BASED GAINS
‘We had good success in [the] media [sector] reflecting our preference for established leaders such as Meta (META:NASDAQ), Uber (UBER:NYSE) and Amazon.com (AMZN:NASDAQ) rather than unprofitable growth stocks’, said managers Helge Skibeli and Tim Woodhouse, along with James Cook who joined the team during the period.
‘Over the past three years, Amazon has invested over $160 billion into their business, which compares to under $35 billion in the prior three years.’
Other portfolio highlights included French tyre maker Michelin (ML:EPA), which benefited from a ‘resilient business model’ (given that 70% of its revenue is generated from replacement tyres), and ‘higher quality retailers’ like global luxury brand LVMH (MC:EPA) which benefited from the re-opening of China ‘unlike the broad retail sector.’
‘We also managed to avoid investment in companies that had been benefiting from the pandemic such as consumer electronics and home furnishings, instead finding companies with re-opening opportunities, such as hotels’, added the managers.
Going forward the trust has identified several key investment themes including artificial intelligence (AI).
‘We see AI as an opportunity that could change the way companies operate over the next decade, from both an efficiency point of view and a quality-of-service perspective, with social media stocks seeing this as a core part of their infrastructure and business,’ the managers added.
The company has holdings in Nvidia (NVDA:NASDAQ) and Adobe (ADBE:NASDAQ) to give them the ‘ability to monetise AI’.
STRONG TRACK RECORD
In the three years to June, JPMorgan Growth & Income has delivered an average annualised return of 16.2% on an NAV basis with debt fair value compared to the market return of 9.9%, while over 10 years the company has achieved annual returns of 12.9% versus a market return of 10.7%.
Find out how JPMorgan Global Growth & Income is performing ahead of the pack
DIVIDEND INCREASE
Shareholders welcomed an 8.5% increase in divided from the last financial year’s total dividend of 17p to 18.44p through four quarterly installments of 4.61p per share
The company's aim is to pay dividends totaling at least 4% of the NAV as at the end of the preceding financial year, assuming no unforeseen circumstances.
‘Our capacity to part-fund dividends from our significant level of realised capital profits provides the company with the means to meet investors' desire for income, combined with clarity over dividend payments for the coming year', the firm added.
LEARN MORE ABOUT JPMORGAN GLOBAL GROWTH & INCOME
Disclaimer: The author (Sabuhi Gard) owns shares in JP Morgan Global Growth Income (JGGI).
