JPMorgan Global Growth trust: We’re not just relying on the US

JPMorgan Global Growth and Income (JGGI ) co-manager James Cook has pushed back against the idea his investment trust’s strong returns have come just from betting big on the US.

In an investor webinar this week, Cook pointed to the £3.1bn global trust’s outperformance across different markets in recent years.

‘We’ve made positive excess returns in every single major region,’ said Cook, who suggested the trust might sometimes be perceived as US-centric just because it has JPMorgan in its name.

JGGI has been a stellar performance in recent times. That has helped it expand to its current scale via several mergers along the way, most recently with Henderson International Income trust. 

Shareholders in the 4.3%-yielding trust have enjoyed a 93% total return in the past five years, including its enhanced dividends. That is well ahead of 70% for the MSCI AC World index.

Nonetheless, the trust is unusual in its global sector for being overweight the US, with 68% in the region at the end of April, versus 64% for the benchmark.

That is surely a factor which has cost the trust in performance terms year to date, when shareholders are down 6.5%.

Cook said European value stocks had typically outperformed US high-growth stocks by about 30% over the past three months.

A significant proportion of the trust’s outperformance in recent years has come from successful calls on individual US tech giants, rather than being underweight or overweight the ‘Magnificent Seven’ as a whole. 

The trust’s current approach is to find stocks that have been ‘unduly punished’ by tariffs and economic concerns. ‘Tariffs have been very negative and have given us an opportunity to find US stocks to trade for attractive valuations,’ said Cook.

The manager also said they had started to take more positions in defensive companies way back in October 2024, prior to Donald Trump’s election, on fears of a US recession.

JGGI is also looking at AI growth opportunities, linking this to rising power demand in the US. It is believed that the rapid growth in AI users is not only profitable for AI companies, but also energy companies which provide the power needed to fuel these programmes, placing two potentially prosperous investment themes on JGGI’s horizon.

Alphabet is the only Mag Seven stock they have not held once in the last five years, due to concerns that AI large language models, such as ChatGPT, are going to be ‘very painful’ for Google’s dominant search business. 

Quality will out

The JPMorgan trust’s broad portfolio can hold between 50-90 stocks. However, it was clarified that ‘it’s traditionally been a lot closer to that 50 number’.

Cook and his co-managers, Timothy Woodhouse and Helge Skibeli, invest in a mix of ‘value’ and ‘growth’ stock, relying on the breadth of JPMorgan’s global platform.

However, it is their quest for ‘superior quality of earnings’ that Cook emphasised this week. He considers 80% of JGGI’s portfolio to be in ‘quality businesses’.

In theory, these companies should be able to perform even in an economic downturn as these stocks have, according to him, ‘high barriers of profitability and resilient earnings through the economic cycle’. Many of the key holdings here are consumer businesses, such as Amazon, LVMH and McDonald’s. All three are top 10 holdings.  

Addressing LVMH, Cook said the luxury company had been a strong contributor to the strategy over five years. Although, the shares have now nearly halved since their 2023 peak.

The fact that ‘China hasn’t fully recovered’, Cook said, has been the primary reason for that underperformance. This along with poor brand momentum caused JGGI to scale back its position in the company, which now stands at 2.1%