JPMorgan Global Growth & Income releases its 12 month results

JGGI : JPMorgan Global Growth & Income

JPMorgan Global Growth & Income releases its 12 month results – The NAV of JPMorgan Global Growth & Income (JPGI) delivered a total return of  +8.2%, whereas the company’s benchmark, the MSCI AC World Index rose by 8.9% (in sterling terms).  The company’s share price returned 10.5% on the same basis, which reflects a narrowing of the discount to NAV.


Stock selection was the biggest detractor to performance, followed by asset allocation.  This was partially offset by currency movements, which was to the benefit of the portfolio.  The investment managers reported that holdings in DISH Network, the US satellite-TV service provider, Outokumpu, the European stainless steel producer and Allergan, the US pharmaceutical company underperformed and detracted from performance. Positions in Ping An, the Chinese insurance company, DBS, the Singapore-based bank and UnitedHealth Group, the US health insurance provider were some of the strongest performers over the year. The investment managers also commented on the portfolio’s positioning in technology, which continued to detract from performance. The portfolio remained underweight “FAANG” stocks (Facebook, Amazon, Apple, Netflix, Google) – only owning Google. They believe that, while they are great businesses, they are certainly not cheap and represent an ebullience/momentum which frequently leads to derating and disappointment.

Investment managers’ portfolio positioning and outlook

“Last summer we reduced gearing to zero given the risks after such a sustained bull run that the market was already pricing in the most favourable scenarios. We saw such a market correction at the end of January and into February this year, arguably later than many had expected, and have been introducing gearing back into the portfolio over recent months. The key question for the rest of this economic cycle remains the interplay between inflation, bond yields and the gradual reduction in monetary stimulus and how this will impact the economy, the shape of the yield curve and equity market. Currently a healthy environment for the global economy and corporate profits remains a favourable backdrop for equity markets.

Our focus remains on company-specific valuation signals derived from intensive company research and long term cash flow models. We remain vigilant in ensuring that our analyst estimates are as reflective as possible of the changing environment and look to seize opportunities which heightened market volatility can offer us as active stock pickers. We have not made any significant changes to the overall shape of the portfolio which remains pro-cyclically positioned with a bias towards higher beta. Regionally our bottom-up process continues to result in overweight exposure to Europe and the UK whereas North America is an area in which we are broadly neutral.”

Chairman’s outlook

“Since the year end the US equity market has remained firm, buoyed by very strong corporate earnings. Elsewhere the picture is very mixed, with markets and currencies in emerging countries falling as a result both of rising US interest rates and the possibility of highly disruptive trade wars between the US and its trading partners. This latter development adds a major element of uncertainty to an outlook that should otherwise be quite benign, with steady to strong economic expansion in most developed and developing countries.”

JPGI : JPMorgan Global Growth & Income releases its 12 month results

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