LONDON STOCK EXCHANGE ANNOUNCEMENT
JPMORGAN GLOBAL GROWTH & INCOME PLC ('the Company')
UNAUDITED HALF YEAR RESULTS FOR THE SIX MONTHS ENDED
31ST DECEMBER 2021
Legal Entity Identifier: 5493007C3I0O5PJKR078
Information disclosed in accordance with DTR 4.2.2
CHAIRMAN'S STATEMENT
This is my first report to you as Chairman following the retirement of Nigel Wightman after our Annual General Meeting held in October last year.
Investor optimism around ongoing vaccine rollouts and a strong corporate earnings season drove equities higher during the first half of this financial year. Global equities rallied strongly over the final quarter of 2021. While the emergence of the highly infectious Omicron variant led to a spike in equity market volatility at the end of November, markets quickly recovered as data from South Africa and the UK indicated a lower risk of severe symptoms.
Against this background I am pleased to report that equity markets rose materially during the six months to 31st December 2021. The total return on the Company's net assets (with debt at fair value) was +8.2% and the return to shareholders was +9.9% compared with the return on our benchmark, the MSCI AC World Index (in sterling terms) of +7.7%.
The table below sets out these figures in more detail and highlights the modest success of stock selection over the period. The Investment Managers' Report provides a detailed commentary on market developments, portfolio activity and the outlook.
PERFORMANCE ATTRIBUTION
SIX MONTHS ENDED 31ST DECEMBER 2021
|
|
% |
% |
|
Contributions to total returns |
|
|
|
Benchmark return |
|
7.7 |
|
Asset allocation |
– |
|
|
Stock selection |
0.6 |
|
|
Currency effect |
-0.1 |
|
|
Gearing/cash |
-0.2 |
|
|
Investment Managers' contribution |
|
0.3 |
|
Portfolio return |
|
8.0 |
|
Management fee/other expenses |
-0.3 |
|
|
Performance fee |
0.2 |
|
|
Net asset value return – prior to structural effects |
|
7.9 |
|
Structural effects |
|
|
|
Share buy-backs/issuance |
0.1 |
|
|
Net asset value return – Debt at par value |
|
8.0 |
|
Impact of fair value valuation of debt |
|
0.2 |
|
Net asset value return – Debt at fair value |
|
8.2 |
|
Return to shareholders |
|
9.9 |
Source: JPMAM and Morningstar.
All figures are on a total return basis.
The Company's shares continued to trade close to, or at a small premium to net asset value during the half year and we were able to reissue from Treasury the remaining 3,776,000 shares for a total consideration of £16,694,000. A block listing on the main market of 15 million Ordinary shares of the Company was secured in August last year. The Company further issued 3,069,000 new shares for a total consideration of £13,792,000 up to 31st December 2021. Since then, the shares have continued to trade at a premium to NAV in 2022, allowing us to continue issuing new shares; up to the time of writing, a further 1,855,000 new shares have been issued for a total consideration of £8,443,000.
As a result of the rise in net asset value and issuance of new shares, shareholders' funds rose over the period from £653.4 million to £725.3 million.
As announced in October last year, the Board signed Heads of Terms with the Board of The Scottish Investment Trust PLC ('SCIN') in respect of a proposed combination with SCIN to be effected by way of a section 110 scheme of reconstruction by SCIN and a transfer of assets to the Company. This was following a strategic review undertaken by the Board of SCIN and will bring together two of the oldest investment trusts in the sector, having both been incorporated in 1887, creating a combined enlarged entity that is expected to have net assets in excess of circa. £1.2 billion. This is subject to shareholder approval, in addition to regulatory and tax approvals. Further details of the proposed transaction will be announced in due course. JPMorgan was appointed as SCIN's alternative investment fund manager as agreed and has realigned and started to manage its investment portfolio substantially in line with the investment policy and strategy of the Company in advance of SCIN's reconstruction. Upon completion of the transaction, as already announced, the Board looks forward to welcoming representatives of SCIN's board on ours. The Board is pleased that this proposed merger will bring with it benefits for both sets of shareholders.
In addition to the above, the Board agreed revised management fee arrangements with JPMorgan, replacing the existing management fee and performance fee structure with a tiered management fee on the following basis:
• 0.55% on net assets up to £750 million;
• 0.40% on net assets between £750 million and £1.5 billion; and
• 0.30% on net assets in excess of £1.5 billion.
The revised fee structure was implemented with effect from 1st January 2022 and any performance fees accrued to that date shall be paid in full. No further performance fee is being accrued since 1st January 2022.
After a strong 2021, it has been a difficult start to this year for equity markets with rising concerns about inflation, central bank tightening and tensions in Eastern Europe followed in the last week by the full-scale invasion of Ukraine, causing significant volatility. Although at this stage it is impossible to predict the outcome of this tragic event, the Board is confident that the Investment Managers are well positioned to identify appropriate investment opportunities around the world and that the Company's portfolio is well placed to deliver good performance over the longer term.