TIDMJAGI
JPMorgan Asia Growth & Income PLC
20 December 2022
JPMorgan Asia Growth & Income (JAGI)
20/12/2022
Results analysis from Kepler Trust Intelligence
For the financial year ending 30/09/2022, JPMorgan Asia Growth
& Income (JAGI) reported a NAV total return of -16.2% and a
share price return of -17.2%. The MSCI All Countries Asia ex Japan
Index, JAGI's benchmark, declined by -13.9% over the same
period.
Performance during the year reflected an extremely tough period
for Asian equities, which impacted JAGI particularly because of its
overweight to China and limited exposure to India, one of few
bright spots in the region. With the exception of India, every
market that JAGI invests in was trading below its 10-year
historical price-to-book average on 30/09/2022.
Dividends for the period totalled 16.5p. JAGI pays a quarterly
dividend, equal to 1% of NAV on the final day of each quarter. This
does mean dividends will rise or fall in line with performance but
it also gives the managers greater flexibility when making
investment decisions.
Chairman of the Board Bronwyn Curtis said: "Asia's long-term
growth prospects remain bright. JPMorgan Asia Growth and Income is
a low-cost way for investors to gain diversified exposure to the
region's best businesses, while also providing shareholders with a
competitive income of approximately 4%. And with share price
valuations now at historical lows in many regional markets, we
share the Investment Managers' excitement about the many
opportunities now available to purchase interesting, world-class
companies in various sectors across Asia, at particularly
attractive prices."
Kepler View
JPMorgan Asia Growth & Income (JAGI) offers investors an
option for core, long-term exposure to companies in Asia. The trust
makes use of its closed-ended structure to pay dividends from
capital, with an objective of paying a quarterly dividend equal to
1% of NAV on the final day of the quarter. This gives the managers
flexibility when investing, meaning they can tilt the portfolio
towards more growth-oriented companies if they believe this is
where the best opportunities lie, without having to worry about
whether those companies will generate enough income to meet
dividend objectives.
Asian markets have been rocked this year, partly because of the
war in Ukraine which drove up commodity prices - a serious problem
for energy importers like India and China. Another major factor has
been China's ongoing 'Zero Covid' policy, which has created huge
supply chain jams and prevented factories and ports from operating.
Outside of China, a global economic slowdown may be starting to
dent exports from countries across the region, including South
Korea, Taiwan and India. For JAGI specifically, being underweight
to India, which the managers argue is expensive relative to peers
and historical levels, and having exposure to higher growth
companies in China and Taiwan led to underperformance.
Despite trading at a 1.2% premium in December 2021, JAGI's
discount has since widened to approximately 10% as at 14/12/2022,
likely reflecting investors' fears about further near-term
volatility. That's understandable but we think the long-term
prospects of Asia remain positive and note that the managers have a
strong track record of investing in the region. We think the trust
is a solid option for Asia exposure and it's possible the discount
will tighten if we see a positive turn in investor sentiment in the
region.
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(END) Dow Jones Newswires
December 20, 2022 06:52 ET (11:52 GMT)
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