JPMorgan Asia Growth & Income
JPMorgan Asia Growth & Income (JAGI)
Results analysis from Kepler Trust Intelligence
JPMorgan Asia Growth & Income (JAGI) generated impressive outperformance over the six months ending 31 March 2021. NAV total returns were 17.8% compared to a return from the MSCI AC Asia ex Japan benchmark of just 14.1%. The share price total return was 17.8% thanks to a widening premium rating.
The trust pays a quarterly dividend equal to 1% of the NAV at the close of the previous quarter, supplementing revenue returns from capital reserves where necessary. In respect of the quarters to 31 December 2020 and to 31 March 2021 dividends of 4.8 pence and 4.9 pence respectively were paid, totalling 9.7 pence and reflecting the strong rebound in the company's net assets. Two further dividends will be declared on the first business day after 30 June 2021 and 30 September 2021.
This was a strong six months for JPMorgan Asia Growth & Income (JAGI) despite the fact that growth was out of favour for the majority of the period. Despite the fact that value has outperformed growth in Asia since October, JAGI generated excess returns against the benchmark for the remainder of the reporting period and since. In our view, this illustrates the benefits of the diversification in JAGI's portfolio, as well as the tilt towards quality growth rather than speculative stocks, and the strong impact of good stock selection as well.
JAGI's portfolio is focussed on quality growth companies, meaning businesses which can sustainably compound their earnings faster than the market. While JAGI performed strongly in absolute terms in 2020 overall, it slightly underperformed the index, as returns in the region were highly concentrated in a handful of companies in the ecommerce and information technology (IT) fields. JAGI did well from its holdings in these sectors, but also retained significant positions in financials and consumer areas which the managers believe have strong secular growth potential, but which performed relatively poorly in locked down economies. The managers resisted the temptation to chase performance during the lockdowns, and this decision to remain diversified has put the trust in a strong position in 2021 and contributed to its outperformance this year and since the start of the coronavirus crash last March.
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