LONDON STOCK EXCHANGE ANNOUNCEMENT

JPMORGAN ASIA GROWTH AND INCOME INVESTMENT TRUST PLC

UNAUDITED HALF YEAR RESULTS FOR THE SIX MONTHS ENDED 31ST MARCH 2022

Legal Entity Identifier: 5493006R74BNJSJKCB17

Information disclosed in accordance with DTR 4.2.2

CHAIRMAN'S STATEMENT

Performance

There was remarkable symmetry to the Company's performance statistics over the six months to 31st March 2022 as the Company's net asset value ('NAV') return, share price return and benchmark index all retreated by 6.9% (all figures are on a total return basis).

The decline in the Company's performance in absolute terms over the review period is disappointing, however Asian equity markets can be particularly volatile at times, and the Company has weathered several previous bouts of return volatility over its 25 year history. To put recent performance into perspective, it is helpful to consider the Company's performance track record over longer periods, and I am pleased to report that the Company has provided shareholders with significant positive returns, and notable outperformance of the benchmark, over the long term. Its annualised return over the ten year period to end March 2022 was 9.7% on an NAV basis, and 10.2% in share price terms, comfortably higher that the benchmark's 7.8% increase.

Over the six month review period, the benchmark's 6.9% decline masked a more mixed performance of the region's various markets. China experienced the largest fall (17.5% in sterling terms), due to several adverse influences, some domestic and some driven by events on the global stage. Economic activity in China has slowed due to the severity of government's efforts to control the spread of the Omicron variant, and the policy-induced slump in the property market. In addition, investors are still concerned about long term implications of the Chinese authorities' regulatory crackdown.

At the same time, most major markets around the world have been hit by escalating inflation and fears of further interest rate increases. Some of these global price pressures are the result of Chinese factory closures, which have increased supply constraints on key manufacturing components, especially semiconductors, while Russia's invasion of Ukraine has compounded existing pressures on energy and commodity prices. To dampen these pressures, the US Federal Reserve and the Bank of England began tightening monetary policy during the review period, and signalled further rate hikes ahead. This led to a significant re-rating of growth stocks across all major markets, with media and technology stocks being most vulnerable to such revaluations. China's technology stocks have been especially badly affected.

Across the rest of the Asian region, South Korean and Hong Kong markets also declined (by 8.3% and 3.0% respectively in sterling terms), in part due to the same revaluation of growth stocks, while other markets saw gains, led by Indonesia, which rose 19.4% in sterling terms over the period. Despite weakness in the Chinese and Korean markets, the portfolio's positioning in these markets was one of the main sources of outperformance, thanks to the asset allocation and stock selection skills of the Company's Investment Managers. For Indonesia, both the overweight positioning and stock selection contributed to performance. More broadly, the market benefited from rising resource and energy prices as Indonesia is a key exporter of natural gas, industrial metals and coal.

During the period, growth stocks in China generally underperformed the broader market, with many of these names finding that the path towards profitability is increasingly challenged because of rising competition and regulatory headwinds. This has also been the case across other markets including in South East Asia, India and Korea. The value segment of the market has performed well mainly due to banks benefiting from rising interest rates, the economic and credit recovery in most regions in Asia and credit costs generally remaining low. The Company does not take a large bet in either the direction of value or growth and is focused more on owning the best businesses which are reasonably valued across regions and sectors.

Full detail of the Company's performance, together with a market review and outlook for 2022, can be found in the Investment Managers' Report on pages 9 to 12 of the Company's Half Year Report and Financial Statements for the six months ended 31st March 2022 ('2022 Half Year Report').

Dividend Policy

In the absence of unforeseen developments, the Company's dividend policy aims to pay regular, quarterly dividends, each equivalent to 1% of the Company's NAV. Payments are set based on the NAV on the last business day of each financial quarter, being the end of December, March, June and September, and are funded from a combination of revenue and capital reserves.

For the year ended 30th September 2021, dividends paid totalled 19.3 pence (2020: 15.8 pence). In respect of the quarters ended 31st December 2021 and 31st March 2022, dividends of 4.5 pence and 4.2 pence respectively were paid, totalling 8.7 pence. Two further dividends will be declared on the first business day after 30th June and 30th September 2022.

The Board would like to remind shareholders that the dividends are based upon a percentage of net assets, so the dividend paid to shareholders will reflect the Company's net assets at the particular quarter end, and will thus be subject to market fluctuations.

Discount and Share Capital Management

The discount level of the Company's shares has remained largely unchanged during the review period. The discount level is closely monitored by the Board and the Manager and during the six months to 31st March 2022, 102,796 shares were bought back and held in treasury. 

Gearing

The Company has in place a multi-currency loan facility with Scotiabank. The Investment Managers utilise drawdowns from this loan facility to gear the portfolio during periods when they expect gearing to enhance performance. Over the reporting period and at the time of writing, the Company was not geared.

Board of Directors

As reported in the Annual Report 2021, having served as a Director since September 2013, and chaired the Board since 2017, I will be retiring at the Company's Annual General Meeting to be held in February 2023. I will be succeeded by Sir Richard Stagg, who has served on the Board since July 2018. Directors will seek to appoint a new Director at some point this year.

Outlook

The challenges facing global and Asian markets have increased since our last report, due in large part to the tragic war in Ukraine. In addition to the major escalation in geopolitical tensions triggered by the conflict, Asian countries are not immune to the energy and commodity prices rises the war has exacerbated. Resultant interest rates increases in the US and other developed markets are likely to keep the valuations of Asia's long duration growth stocks under pressure. This is the case even though policy is being eased, not tightened, in China, in an attempt to revive the property sector and offset the massive economic cost of China's 'Covid-zero' policy. It seems likely that this policy will remain a drag on economic activity until a higher proportion of China's elderly population is adequately vaccinated. Meantime, with many of China's factories closed, global component shortages are likely to persist or worsen.

Despite these near-term uncertainties and worries, the Board continues to believe that Asia offers significant long-term investment opportunities and, given the recent market sell-off, there are many opportunities now available at more attractive prices. The region is benefiting from major structural and social changes and it is home to a growing number of innovative, dynamic and well-managed companies, including some world leaders in tech, healthcare and other sectors. Structural changes will bring about opportunities for companies across the Asian region, and particularly in South East Asia, as China's dominance of manufacturing and supplier operations declines and global companies seek out supply chain diversification. 

JPMorgan Asia Growth & Income is a low-cost way to gain diversified exposure to the best of the region's opportunities, while simultaneously providing shareholders with a competitive income of approximately 4%. The Board has great confidence that the Company's Investment Managers will continue to deliver attractive returns and outperformance to patient investors willing to tolerate bouts of market volatility.

Bronwyn Curtis OBE

Chairman                                                                                                                                              

30th May 2022

INVESTMENT MANAGERS' REPORT

Introduction

In this report we consider the Company's investment performance for the six month period to 31st March 2022. We review the market backdrop over the period, and examine the factors that impacted relative performance. Finally, we consider the outlook for Asian equities over the coming six months and beyond.

The market environment

In the six month period to the end of March 2022, investor sentiment deteriorated significantly, with the MSCI AC Asia ex Japan Index falling 6.9% in sterling terms. A myriad of factors impacted the regions. Starting from a global perspective, the tragic invasion of Ukraine exacerbated issues that were already weighing on sentiment, including both inflationary pressures driven by rising resource and commodity prices as well as continued challenges with the global supply chain. The conflict has also heightened political concerns due to the Chinese Communist Party's ambivalent messaging and partial support for Russia. Investors are worried that an increasingly united West could extend sanctions to China if diplomatic relationships between the West and China cannot be improved.

More regionally, the outlook for growth in China, Hong Kong and South Korea also worsened over the period. The Chinese market was hit particularly hard by the property market downturn and a sharp sell-off in technology companies, combined with a marked economic slowdown. Chinese growth is now running below trend - official GDP data showed annualised growth of 4% in Q4 2021, and 4.8% growth in Q1 2022, compared to 8.1% in 2021 calendar year. China's economy has performed better than Hong Kong's, mainly because of strong exports, which have been driven by the global recovery. Hong Kong's economy contracted by 1% year on year in the first quarter, as a consequence of the government's strict policies to contain the spread of Covid-19. Total output in nominal terms has not grown for two years and unemployment is at all time highs. South Korean GDP growth has remained positive, at 3.1% annualised in Q1 2022, but this is half the pace of growth experienced over the previous year, as the central bank took steps to quell inflation pressures.

Elsewhere in the region, the majority of South East Asian markets performed well. Indonesia was the best performing market over the six month review period, led primarily by companies seen to be beneficiaries of rising commodity prices. Taiwan also outperformed the index, thanks to two different drivers. Rising US interest rates supported Taiwanese financial names, while Taiwan Semiconductor Manufacturing ('TMS'), one of the world's leading producers of semiconductors, continues to benefit from strong global demand and ongoing supply constraints. The company's Q4 results were robust, with sales growing more than 6% over the quarter. Leading edge chips used in the most technologically advanced sectors such as high performance computing, mobile phones, Internet of Things ('IoT') and automobiles made up more than 50% of revenues, and sales of chips for use in electric vehicles and mobile phones grew approximately 10% quarter on quarter. TMS was the Company's largest position as at end March 2022, and one of the key contributors to returns over the review period.

Unlike in the West, some Asian countries have chosen not to 'live with the virus', and have instead maintained relatively strict protocols to minimise the spread of Covid-19. Hong Kong and China have implemented the most severe controls, despite the enormous cost to both economies. In sharp contrast, the economies of India and most of South East Asia are experiencing rapid, post-pandemic recoveries as normal life resumes.

Although inflation concerns have risen sharply in many developed countries, due to the shortage of semiconductors and other components, combined with rising energy and commodity prices, these factors have had a more mixed impact on inflation in Asia. In countries such as South Korea and India, inflation is testing ten year highs, while in China and Indonesia, inflation has been rather benign. However, despite this mixed regional picture, rising US inflation and interest rates have nonetheless adversely impacted the share prices of Asian businesses whose valuations are based on their long-term growth prospects. Technology and media stocks have been hardest hit by downward revaluations, and this has weighed particularly heavily on markets such as China, whose indices have a high proportion of these stocks.

Performance

Against this very mixed, and challenging backdrop, the Company performed in line with the index over the period, declining by 6.9% on a net asset value ('NAV') total return basis, and in share price terms. This outright fall is, of course, disappointing, but the Company has delivered significant positive returns for shareholders in absolute terms, and outperformed the benchmark, over three, five and ten years. Over the ten years to the end March 2022, the Company has generated an annualised return of 9.7% in NAV terms, and 10.2% on a share price basis, compared to a benchmark return of 7.8%, measured on the same basis.

PERFORMANCE ATTRIBUTION

FOR THE SIX MONTHS ENDED 31ST MARCH 2022

¹     The dividend/residual arises principally from timing differences in the treatment of income flows.

Source: FactSet, JPMAM and Morningstar.

All figures are on a total return basis. Performance attribution analyses how the portfolio achieved its recorded performance relative to its benchmark.

Major Contributors and Detractors to Performance

At a stock level, our significant overweight to financials contributed positively to returns over the review period, including banks in Indonesia, China, and Singapore. Broadly, banks in the region have performed well, driven by the economic recovery, which has been especially sharp in Indonesia. Investors are also anticipating the favourable impact that rising interest rates will have on banks' margins. In China, amidst the continued troubles of the property sector, the best and most conservatively managed developers, including portfolio holding China Resources Land Ltd, are taking market share and producing solid earnings results, despite a challenging business environment.

At the sector level, in addition to the Company's exposure to financials, holdings in oil and gas companies, also performed strongly, due to the rise in energy and other commodity prices. For example, our out-of-index position in Santos, an Australian-listed resource company, has been one of the main contributors to performance during the review period. Its production growth is primarily driven by projects in South East Asia, including Papua New Guinea.

At the country level, our modest underweight to the poorly performing Chinese market enhanced returns. Our overweight to South Korea also contributed positively, thanks in part to our holdings in SK Hynix, a semiconductor manufacturer and a top ten holding, AfreecaTV and Kakao Corp, an internet content and information provider. The latter is Korea's leading internet conglomerate, with wide ranging businesses including the country's largest online bank, and platforms offering ride sharing, e-commerce and digital content. Our overweight to Indonesia, the region's strongest performer over the review period, also supported performance, while our underweights to Taiwan and India and our overweight to Singapore detracted.

The biggest detractors from performance at the stock level were growth stocks in the technology and media sectors whose valuations have been hit by rising interest rates. Singapore's Sea Limited was the largest negative contributor. The company operates two main businesses: a video game developer focused primarily on emerging markets, and an e-commerce platform with operations in South East Asia, Taiwan, Eastern Europe and Latin America. In addition to the adverse impact of higher rates on Sea Ltd's valuation, the growth outlook for the company's gaming business has matured quickly and e-commerce is becoming more competitive, especially in Latin America. Other detractors from returns include Chinese healthcare names such as Zai Lab, Wuxi Biologics, and Pharmaron Beijing. Despite their good results, these companies have seen their share prices correct sharply on concerns about the possibility of US government sanctions.

Portfolio activity over the past six months

Recent market volatility has created opportunities for us to purchase businesses at more attractive levels. We added to existing holdings in Han's Laser, a Chinese firm with strong positioning in factory automation where demand is being driven by industrial and electric vehicle demand. We also topped up the existing position in Singapore Exchange on underperformance related to the launch of Chinese A share futures by Hong Kong Exchange. Despite this, the exchange has maintained a 90% share and importantly both products are growing. A new purchase was Infosys, one of the leaders in off-shore IT services in India and the company is benefitting from strong demand trends and increasing enterprise digitalisation.

Key outright sales were LG Household & Health Care because the Chinese cosmetics industry is proving to be more competitive and even LGHH's prestige brands are growing at a slower pace and likely losing share, and PTT Exploration & Production, which outperformed on the back of rising oil and natural gas prices. We also reduced the position in Meituan as near term outlook turned incrementally negative given rising regulatory risks for food delivery, which weigh on the probability that the normalised EPS forecasts will be achieve in the near term.

What should investors expect over the next six months?

Global financial markets are currently subject to unusually high levels of uncertainty, which are being fuelled by a number of factors - the marked slowdown in Chinese growth, the conflict in Ukraine, associated rises in commodity costs, other inflation pressures, and rising interest rates. What makes the current situation even more unique is the fact that inflation is being driven to a significant extent by persistent supply chain disruptions, due in part to factory closures in China, as the authorities maintain stringent lockdown conditions.

Unfortunately, the Fed and other central banks have little power to alleviate these supply bottlenecks. They can only try to dampen domestic demand by tightening monetary policy. The Fed and the Bank of England have already taken steps along this path and signalled their intention to increase rates further in coming months. Slower US growth in particular is likely to weigh on US export demand for goods from Taiwan, South Korea and China.

Market valuations across the region mostly reflect this deterioration in the economic environment. The MSCI AC Asia ex Japan Index is trading at a price to book ratio of 1.6x, which is approximately 5% lower than the average of the last 20 years. Looking more deeply into the Index's geographical constituents, valuations in South Korea, Hong Kong and China are relatively more attractive following recent market sell-offs, while in India they remain elevated. We are overweight to South Korea and Hong Kong accordingly, but underweight China due to our concerns around the slowing economy, regulation headwinds and elevated valuations in the growth segment of the market. We also have a significant underweight to India, which we believe is not only expensive at current levels, but also especially vulnerable to commodity price hikes due to its heavy reliance on imported resources.

In the current inflationary environment, a company's ability to pass on higher costs to its customers is a key determinant of its future prospects. Yet in Asia, corporates across all sectors except energy and other resource producers lack pricing power and are thus seeing pressure on margins. Again, we see this as a particular issue in India, where the market's current high valuations suggest that investors have not yet discounted looming inflation risks. With India's inflation rate testing ten year highs, it is only a matter of time before its central bank tightens policy. This will cast a cloud over the economic outlook and possibly lead investors to reassess current elevated market valuations.

Despite myriad near term uncertainties, and risks to some markets, we stand by our conviction that Asian equities continue to provide attractive long term investment opportunities. From a top-down perspective, Asian countries have large and growing economies, accounting for roughly 40% of the world's GDP, and are home to many companies that are global leaders in a wide range of industries, including semiconductor manufacturing, healthcare, renewable energy, next generation automotive production and financials.

We remain confident that our long experience, our presence in local markets and our focus on the fundamental analysis of specific stocks, will allow us to keep identifying the best investment opportunities on offer in the region, ensuring the Company's portfolio continues to provide our investors with attractive returns and outperformance over the long term.

Ayaz Ebrahim

Robert Lloyd

Investment Managers                                                                                                                               

30th May 2022

INTERIM MANAGEMENT REPORT

The Company is required to make the following disclosures in its half year report:

Principal Risks and Uncertainties

The principal and emerging risks faced by the Company fall into the following broad categories: investment and strategy, political and economic, operational risk and cybercrime, climate change and global pandemic. Information on the principal and emerging risks faced by the Company is given in the business review section within the 2021 Annual Report and Financial Statements.

Related Parties Transactions

During the first six months of the current financial year, no transactions with related parties have taken place which have materially affected the financial position or the performance of the Company during the period.

Going Concern

The Directors believe, having considered the Company's investment objectives, risk management policies, capital management policies and procedures, nature of the portfolio (being mainly securities which are readily realisable) and expenditure projections, that the Company has adequate resources, an appropriate financial structure and suitable management arrangements in place to continue in operational existence for the foreseeable future and, more specifically, that there are no material uncertainties pertaining to the Company that would prevent its ability to continue in such operational existence for at least 12 months from the date of the approval of this half-yearly financial report. For these reasons, they consider there is reasonable evidence to adopt the going concern basis in preparing the financial statements. This conclusion also takes into account the Board's assessment of the impact of heightened market volatility since the Covid-19 outbreak and more recently the Russian invasion of Ukraine, but does not believe the Company's going concern status is affected.

Continuation votes are held every three years and the next continuation vote will be put to shareholders at the Annual General Meeting in 2023.

Directors' Responsibilities

The Board of Directors confirms that, to the best of its knowledge:

(i)      the condensed set of financial statements contained within the half yearly financial report has been prepared in accordance with FRS 104 'Interim Financial Reporting' and gives a true and fair view of the state of affairs of the Company and of the assets, liabilities, financial position and net return of the Company, as at 31st March 2022, as required by the UK Listing Authority Disclosure and Transparency Rules 4.2.4R; and

(ii)     the interim management report includes a fair review of the information required by 4.2.7R and 4.2.8R of the UK Listing Authority Disclosure and Transparency Rules.

In order to provide these confirmations, and in preparing these financial statements, the Directors are required to:

•        select suitable accounting policies and then apply them consistently;

•        make judgements and accounting estimates that are reasonable and prudent;

•        state whether applicable UK Accounting Standards have been followed, subject to any material departures disclosed and explained in the financial statements; and

•        prepare the financial statements on the going concern basis unless it is inappropriate to presume that the Company will continue in business;

and the Directors confirm that they have done so.

For and on behalf of the Board

Bronwyn Curtis OBE

Chairman                                                                                                                                    

30th May 2022

STATEMENT OF COMPREHENSIVE INCOME

FOR THE SIX MONTHS ENDED 31ST MARCH 2022

All revenue and capital items in the above statement derive from continuing operations.

The 'Total' column of this statement is the profit and loss account of the Company and the 'Revenue' and 'Capital' columns represent

supplementary information prepared under guidance issued by the Association of Investment Companies.

Net return/(loss) after taxation represents the profit/(loss) for the period and also the total comprehensive income.

STATEMENT OF CHANGES IN EQUITY

FOR THE SIX MONTHS ENDED 31ST MARCH 2022

¹     These reserves form the distributable reserves of the Company and may be used to fund distributions to investors.

STATEMENT OF FINANCIAL POSITION

AT 31ST MARCH 2022

STATEMENT OF CASH FLOWS

FOR THE SIX MONTHS ENDED 31ST MARCH 2022

NOTES TO THE FINANCIAL STATEMENTS

FOR THE SIX MONTHS ENDED 31ST MARCH 2022

1.       Financial statements

The information contained within the financial statements in this half year report has not been audited or reviewed by the Company's auditors.

The figures and financial information for the year ended 30th September 2021 are extracted from the latest published financial statements of the Company and do not constitute statutory accounts for that year. Those financial statements have been delivered to the Registrar of Companies and include the report of the auditors which was unqualified and did not contain a statement under either section 498(2) or 498(3) of the Companies Act 2006.

2.       Accounting policies

Basis of accounting

The financial statements have been prepared in accordance with the Companies Act 2006, FRS 102 'The Financial Reporting Standard applicable in the UK and Republic of Ireland' of the United Kingdom Generally Accepted Accounting Practice ('UK GAAP') and with the Statement of Recommended Practice 'Financial Statements of Investment Trust Companies and Venture Capital Trusts' (the 'SORP') issued by the Association of Investment Companies in April 2021.

FRS 104, 'Interim Financial Reporting', issued by the FRC in March 2015 has been applied in preparing this condensed set of financial statements for the six months ended 31st March 2022.

All of the Company's operations are of a continuing nature.

The accounting policies applied to this condensed set of financial statements are consistent with those applied in the financial statements for the year ended 30th September 2021.

3.       (Loss)/return per share

4.       Dividends

A second quarterly dividend of 4.2p has been declared for payment on 26th May 2022 for the financial year ending 30th September 2022.

Dividend payments in excess of the revenue amount will be paid out of the Company's distributable capital reserve.

5.       Net asset value per share

JPMORGAN FUNDS LIMITED

30th May 2022

For further information, please contact:

Alison Vincent

For and on behalf of

JPMorgan Funds Limited

020 7742 4000

Neither the contents of the Company's website nor the contents of any website accessible from hyperlinks on the Company's website (or any other website) is incorporated into, or forms part of, this announcement.

ENDS

A copy of the annual report will shortly be submitted to the FCA's National Storage Mechanism and will be available for inspection at  https://data.fca.org.uk/#/nsm/nationalstoragemechanism 

The annual report will shortly be available on the Company's website at www.jpmasiagrowthandincome.co.uk where up-to-date information on the Company, including daily NAV and share prices, factsheets and portfolio information can also be found.