JP Morgan Global Growth & Income Half-Year Results

JPMORGAN GLOBAL GROWTH & INCOME PLC

UNAUDITED HALF YEAR RESULTS FOR THE SIX MONTHS ENDED

31^st DECEMBER 2024

JPMorgan Global Growth & Income plc (the ‘Company’ or ‘JGGI’) announces its half year results for the six-months ended 31st December 2024.

Legal Entity Identifier: 5493007C3I0O5PJKR078

Information disclosed in accordance with DTR 4.2.2

Highlights

• NAV total return of +2.7% compared with +6.5% for the MSCI AC World Index (in Sterling terms) (the ‘Benchmark’). Share price return of +2.4%.
• For five years cumulative ended 31st December 2024, NAV total return of +106.9% compared with +70.8% for the Benchmark. Share price return of +101.9%.
• Third interim dividend of 5.7p declared on 21st February 2025 and will be paid on 9th April 2025. Final interim dividend of 5.7p to be declared in May 2025 and paid in June 2025.
• The Company issued 30.7 million shares through regular issuance in the half year to 31 December 2024 raising £176.7 million.
• Proposed combination with Henderson International Income Trust plc announced, which would leave the Company with combined net assets of £3.4 billion, and an ongoing charges of 0.42%.

The Chairman of JGGI, James Macpherson, commented:

“The recent lag in relative returns is disappointing, but it is important to assess this result from a longer-term perspective.”

“The Company has a very strong and consistent track record of outright gains and outperformance of the Benchmark over many years.”

“The Company has outpaced its Benchmark in each of the past four financial years and delivered an impressive average annualised net asset value total return¹ of +13.8% over the past ten years to end December 2024. This result is comfortably ahead of the Benchmark total return of +11.7% measured on the same basis.”

“The Company’s long track record of consistently good returns and outperformance provides the Board with reassurance that its Portfolio Managers have the skills and experience to steer the Company through any near-term volatility, while also identifying the most attractive investment opportunities generated by the prevailing market conditions.”

¹ The annualised return refers to the average yearly return of the Company or its Benchmark over the relevant reporting period, expressed as a percentage.

Portfolio Managers, Helge Skibeli, Tim Woodhouse and James Cook, commented:

“The Company uses an investment process that, at its heart, relies on strong company fundamentals being rewarded and acknowledged by market participants. However, with momentum dominating investor sentiment in the latter months of 2024, company valuation fundamentals were temporarily overshadowed, and this was the key reason for the Company’s underperformance over the review period.”

“We believe that global stock picking across our core investment universe continues to offer attractive rewards for investors, and we see many well-priced opportunities. The Company has exposure to several long-term trends, such as the rapid adoption of AI tools, cloud computing, and the transition to renewable energy, which we expect will underpin market returns over the medium to long-term.”

“Regardless of the prevailing market environment, we will continue our search for companies that offer superior quality earnings and growth prospects, at similar or lower valuations than market averages. We remain confident of our ability to maintain our long-term track record of strong returns for shareholders.”

CHAIRMAN’S STATEMENT

Introduction

This is my first half year report as Chairman of your Company. My predecessor, Tristan Hillgarth, stepped down at the Company’s last Annual General Meeting. So too did our fellow Director, Mick Brewis. On behalf of the Board, I would like to take this opportunity to thank both Tristan and Mick for the significant contributions they made to the success of the Company during their respective tenures.

Global equity markets were buoyant over the six months ending 31st December 2024, with support coming from several quarters. The so-called ‘Magnificent Seven’ US technology stocks continued to perform strongly, the US economy exceeded expectations, and inflation and rates continued to decline in most developed economies. Towards the year-end there was a notable shift in market drivers from company specific fundamentals, as the market found fresh sentiment driven momentum, in response to the US Presidential election result. The Company’s benchmark, the MSCI AC World Index (the ‘Benchmark’), ended the review period up 6.5% (in sterling terms). 

Performance

The Company’s performance was also positive over the six months to end December 2024, but its return of +2.7% on a net asset value (‘NAV’) debt at fair value basis lagged the Benchmark. The Company returned +2.4% in share price terms over the period. One important driver of the underperformance was the momentum-driven nature of the market, particularly towards the end of the year. A number of high quality businesses lagged as a result, but we continue to see a meaningful opportunity in them today. As the attribution analysis shows below, asset allocation and stock selection decisions both detracted from relative returns. The Investment Manager’s Report discusses performance in more detail.

Performance attribution

Six months ended 31st December 2024

	%	%
Contributions to total returns
Benchmark total return		6.5
Asset allocation	(0.2)
Stock selection	(3.9)
Currency effect	0.2
Gearing/cash	0.2
Investment Manager contribution		(3.7)
Portfolio total return		2.8
Management fees/other expenses	(0.2)
Net asset value total return – prior to structural effects		2.6
Structural effects
Share buy-backs/issuance	0.1
Net asset value total return – debt at par value		2.7
Impact of fair valuation of debt		0.0
Net asset value return – debt at fair value		2.7
Impact of change in rating		(0.3)
Return on Share price		2.4

The recent lag in relative returns is disappointing, but it is important to assess this result from a longer-term perspective. The Company has a very strong and consistent track record of outright gains and outperformance of the Benchmark over many years, despite unusually high levels of market volatility and dramatic fluctuations in market drivers since the turn of the decade. The Company has outpaced its Benchmark in each of the past four financial years and delivered an impressive average annualised net asset value total return¹ of +13.8% over the past ten years to end December 2024. This result is comfortably ahead of the Benchmark total return of +11.7% measured on the same basis. In the Board’s view, this consistency of performance is proof of the Portfolio Managers’ stock selection skills and the robustness of their investment strategy and process.  

As well as discussing recent performance, the Investment Manager’s Report also provides more detailed commentary on market developments, recent portfolio activity and the market outlook.

¹ The annualised return refers to the average yearly return of the Company or its Benchmark over the relevant reporting period, expressed as a percentage.

Outlook

The US economy now seems to be on a relatively stable growth trajectory, with employment and consumer spending rising. Further falls in interest rates will provide additional impetus for growth, even if the rate cuts arrive more slowly than previously expected. If market expectations prove correct, the new US administration’s policy initiatives will also support the domestic economy. However, this remains to be seen. There is a clear risk that President Trump’s mooted tariff increases may trigger a trade war that damages growth not just in the US, but globally.

While financial markets are continuously influenced by various uncertainties, the factors driving market direction tend to evolve over time, as evidenced by the developments of the past six months. Nevertheless, the Company’s long track record of consistently good returns and outperformance provides the Board with reassurance that its Portfolio Managers have the skills and experience to steer the Company through any near-term volatility, while also identifying the most attractive investment opportunities generated by the prevailing market conditions. The Portfolio Managers’ current overweight to US banks is a case in point, as it is motivated by their assessment that US banks should continue to do well while interest rates remain elevated for a longer period than expected.

The Board draws further confidence in the Company’s prospects from its exposure to several long-term structural trends such as artificial intelligence and the transition to renewable energy. These themes are set to drive economic growth and market gains over the medium to long term, from which the Company is positioned to benefit.

In summary, the Board believes the Company is in competent hands, and well-placed to further extend its long track record of superior returns. I look forward to reporting back to you on the Company’s future progress.