A best-selling global trust that offers both growth and income

It has been a challenging period for the majority of investment trusts, with many trading at a discount and having to use buybacks to provide some additional support. One of the few exceptions is the popular JPMorgan Global Growth & Income, which has regularly had to issue new shares to meet the demand.

The fund often appears in our list of best-sellers, which is understandable given the successful track record and attractive yield. Its performance last year was particularly impressive, as the balanced portfolio was able to generate strong returns, despite only having a modest exposure to the large US tech stocks that were responsible for most of the market’s gains.

Strong demand

In February, the trust announced that it was going to issue new shares after being approached by a large wealth manager. The placing was accompanied by a retail offer that was materially oversubscribed, with the orders having to be scaled back accordingly.

A total of £34.5m was raised during the process, which the broker Numis describes as a good result given the extremely tough environment for attracting new capital. It comes hot on the heels of the £173m from last year’s secondary issuance, a period when many investment trusts had to buyback their own shares to limit the discounts.¹

Increased scale and lower costs

The trust has also been involved in a number of mergers that have increased the assets to £2.3bn and helped to reduce the ongoing charges. These include the combination with the Scottish Investment Trust and the rollover from JPMorgan Elect in 2022, as well as the forthcoming tie up with JPMorgan Multi-Asset Growth & Income that was proposed in January.

Strategy and portfolio

JPMorgan Global Growth & Income aims to provide superior total returns and outperform the MSCI All Country World Index over the long-term. It does this by investing in a high conviction portfolio of 50 to 90 companies based on bottom up stock selection, with most of the currency exposure hedged back towards the benchmark.

The managers can tap into the local proprietary analysis conducted by JPMorgan’s global research team to identify the shares that they think will provide the highest total returns. At the end of January the main regional weightings were: the US 65%, Europe & Middle East ex UK 14.7% and Emerging Markets 8.3%, with the biggest sector being Technology Semiconductors and Hardware at 15.5%².

The top ten holdings account for 37.5% of the assets and include well-known names such as Microsoft, Amazon, UnitedHealth, Taiwan Semiconductor, Nvidia and Coca-Cola. It is an interesting combination that allows the fund to benefit from the strong performance of growth stocks, as well as more value-oriented companies with reliable dividends.

JPMorgan Global Growth & Income top 10 holdings

1. Microsoft
2. Amazon.com
3. UnitedHealth
4. Taiwan Semiconductor
5. Nvidia
6. Coca-Cola
7. Mastercard
8. CME
9. ASML
10. Progressive 

Source: JPMorgan, as at 31 December 2023

Attractive dividend policy

The trust makes quarterly distributions that are set at the beginning of each financial year that runs from the start of July. This is an unusual policy, but the intention is to pay dividends totalling at least four percent of the NAV at the time of announcement, with the shares currently offering a prospective yield of 3.6%. Please note this is not guaranteed.³

Impressive performance

JPMorgan Global Growth & Income has been a top performer in the AIC Global Equity Income sector. It has comfortably beaten its benchmark over one, three, five and ten years, generating annualised total shareholder returns of 18.15%, 15.02%, 16.04% and 14.61% respectively³.

Important information - investors should note that the views expressed may no longer be current and may have already been acted upon. JPMorgan Global Growth & Income invests in a relatively small number of companies and so may carry more risk than funds that are more diversified. Overseas investments will be affected by movements in currency exchange rates. Reference to specific securities should not be construed as a recommendation to buy or sell these securities and is included for the purposes of illustration only. Shares in the trust are listed on the London Stock Exchange and their price is affected by supply and demand. The trust can gain additional exposure to the market, known as gearing, potentially increasing volatility. This information is not a personal recommendation for any particular investment. If you are unsure about the suitability of an investment you should speak to one of Fidelity’s advisers or an authorised financial adviser of your choice.