TIDMJEGI
JPMorgan European Grwth & Inc PLC
29 November 2022
JPMorgan European Growth & Income (JEGI)
29/11/2022
Results analysis from Kepler Trust Intelligence
For the six months to 30/09/2022 JPMorgan European Growth &
Income produced a NAV total return of -9.4% (debt at par value) and
-7.7% (debt at fair value). The share price total return was -9.7%.
This is in comparison to the benchmark, which produced a total
return of -10.5%. The Morningstar Europe investment trust peer
group recorded share price and NAV total returns of -16.3% and
-7.9% respectively, with debt at fair value. This is the first
six-month reporting period under JEGI's new simplified structure,
where there is a single share class invested into one equity
portfolio and with one dividend policy.
The newly simplified structure was designed to provide
shareholders with a dividend based on 4% of the preceding year NAV
payable in July, October, January and March. The company has paid
the first interim dividend of 1 pence per share and declared the
second interim dividend of 1 pence per share. Between the end of
this six-month reporting period and the release of this report, the
board declared a third interim dividend of 1 pence per share. The
board is expecting to declare the fourth interim dividend in
February 2023.
Chair Rita Dhut said: "your Board has confidence that our fund
managers have the requisite experience to navigate such a tricky
environment by continuing to stick to a proven investment process.
The new structure and objective of the Company is now clear and
provides a good basis for shareholders to maintain a core long-term
holding in European equities whilst providing an enhanced income.
Together that provides some assurance to shareholders in these
uncertain times."
Kepler View
It is obviously only early days for JPMorgan European Growth
& Income (JEGI's) new simplified structure, and no one would
have wished for the backdrop that accompanied this first reporting
period. Nevertheless, it is encouraging that stock selection has
added value against the benchmark even in the midst of a very
difficult equity market. The new structure frees the management
team to concentrate on stock selection without having to worry
about the timing of underlying dividends, and this has paid off in
the first six months.
The new dividend policy mirrors one adopted by several other
investment trusts including some of the JPMorgan Asset Management
range. Since the dividend is set as 4% of the preceding financial
year end's NAV per share, it is very easy for investors to see what
the quarterly dividends for the following year will be. It is worth
just noting though that although the current year dividend total of
4 pence per share would imply, based on the current share price, a
yield of 4.6%, the dividend level will be reset once again to 4% of
NAV measured at 31/03/2023 and so investors should be aware that
the dividend rises and falls with the NAV.
JEGI's current discount is slightly wider than the average for
the peer group and in our view could improve as more investors
become aware of its robust performance and newly-simplified
structure and dividend policy. After a very difficult year for
equities generally, we would expect the market to favour low
valuations and more robust growth companies. JEGI's defensive
positioning means it is very well set to benefit from such a
scenario.
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(END) Dow Jones Newswires
November 29, 2022 12:21 ET (17:21 GMT)
Jpmorgan European Growth... (LSE:JEGI)
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