LONDON STOCK EXCHANGE ANNOUNCEMENT

JPMORGAN AMERICAN INVESTMENT TRUST PLC

FINAL RESULTS FOR THE YEAR ENDED 31ST DECEMBER 2021

Legal Entity Identifier: 549300QNAI4XRPEB4G65

Information disclosed in accordance with the DTR 4.1.3

CHAIR'S STATEMENT

The last year has continued to be dominated by the Covid-19 pandemic, with the arrival late in the year of the Omicron variant, the ongoing supportive global fiscal and monetary response, and the development and rollout of vaccines and therapeutic treatments. Investors in the US stock market generally assessed these developments very positively with the result that share prices rose strongly during the year. One consequence of the fiscal and monetary response since the original pandemic began in early 2020 has been the re-emergence of higher inflation, initially thought to be transitory, but now widely regarded as likely to be more persistent, exacerbated by supply chain issues throughout the economy.

As a result Central Banks, and the US Federal Reserve in particular, have begun to raise short term interest rates, and dial back the long standing Quantitative Easing strategy that has persisted since the financial crisis of 2008. This has caused the yield of the 10 year US Treasury Bond to rise from 0.93% to 1.52% over the year, and to approximately 2.40% at the time of writing. Following the period end, rising rates and inflation weighed on markets which has had the effect of interrupting the stock market's upward progress.

Over the year, your Company's NAV rose by +28.1% (2020: 22.0%), slightly underperforming its benchmark, the S&P 500 index, which on a total return basis increased by 29.6%, in sterling terms. The share price traded during the year between a discount of 7.6% to a premium of 1.3%, compared to NAV, closing the year at a small discount and delivering a total return to shareholders for the year of 34.3%. More information is provided in the attribution report detailed in the Investment Manager's Report.

Since the Company changed the investment approach on 1st June 2019, it has outperformed its benchmark index by 5.9% through to the end of the financial year, providing a total return to shareholders of +73.2%, compared with a benchmark return of +67.3%. This is an annualised outperformance of 2.2% over the 31 months since the changed investment approach.

The Portfolio

95.5% of your Company's portfolio was invested into US large-cap stocks in a high conviction portfolio of some 40 stocks at year end. This represents a curated selection of the Manager's best growth and value investment ideas. The proportion of the growth and value weighting can vary between 60% and 40% either way and was 52% in growth and 48% in value at period end. 4.4% of the portfolio was invested in a portfolio of smaller capitalisation stocks that replicates the portfolio of the JPMorgan US Small Cap Growth Fund. The balance of the portfolio (0.1%) comprises the liquidity funds, net of the amounts drawn under the credit facility with ING.

More details about the portfolio and activity during the year can be found in the Investment Manager's report.

Gearing

The Board has set the current tactical level of gearing at 5% with a permitted range around this level of plus or minus 5%, meaning that currently gearing can vary between 0% and 10%. The Company ended the year with gearing of 4.9%.

The Board believes it is prudent for its gearing capacity to be funded from a mix of sources including short and longer term tenors and fixed and floating rate borrowings. The Company's gearing strategy is implemented through the use of an £80 million multi-currency revolving credit facility with ING Bank. This is drawn in US Dollars to match the currency of the Company's asset base. Alongside this bank facility, the Company also has in issue $65 million of unsecured loan notes repayable in February 2031 via a private placement with a UK life assurance company with a fixed interest rate of 2.55% per annum. During the year the Company also raised an additional $35 million of unsecured loan notes repayable in October 2032, via a private placement with a UK life assurance company, with a fixed coupon of 2.32%. The net proceeds from the funding was used in part to repay a proportion of the Company's short-term indebtedness.

The gearing level of the Company was 4.5% calculated in line with the Association of Investment Companies ('AIC') methodology as at the latest practical date. The Board continues to review the appropriate gearing level on a regular basis.

Board Review of the Manager

The Board was unable to visit the Manager's offices in New York as planned during the year due to travel restrictions caused by the pandemic, but has been able to hold virtual meetings with the portfolio managers, Jonathan Simon and Tim Parton, and also with the portfolio manager of the smaller companies' portfolio, Eytan Shapiro. The Board further met with JPMorgan's senior management team to discuss the performance of the portfolio, the Company's strategy and to review broader aspects of the Manager's service.

The Manager provides other services to the Company, including accounting, company secretarial and marketing services. These have been formally assessed through the annual manager evaluation process. I am pleased to report that, since the on-set of the pandemic, the Manager and the Company's other service providers have been able to adjust their business operations to accommodate the working from home environment with limited disruption. The Board has received assurances that the Company's operations, including the management of the portfolio, and the maintenance of a strong controls environment, have continued as normal.

Ongoing Charges

The Board continues to monitor closely the Company's cost base. The Company's Ongoing Charges Ratio ('OCR') for the year under review was 0.38%. This means the Company remains one of the most competitively priced US actively managed funds available to UK investors, in either closed-ended or open-ended form. However, the Board is aware that major competitors for investors' attention and funds remain passively invested exchange traded funds and open-ended funds which represent the largest pools of capital invested into US equity markets.

Share Price and Premium/Discount

Throughout the year, the Company's shares traded at a discount to the NAV other than for a brief period of trading at a premium. Consistent with our statements made in previous years and because share buy-backs at a discount to NAV are enhancing to the NAV for remaining shareholders, the Board is prepared to buy-back shares when they stand at anything more than a small discount. This undertaking has operated for several years and applies in normal market conditions.

During the year 4,752,679 shares were purchased into Treasury, at a cost of £30.8 million, representing 2.4% of the Company's issued share capital at the beginning of 2021, and at an average discount to NAV of 4.9%. This is a decrease on the amount repurchased during the previous year when £53.1 million was spent repurchasing 5.1% of the issued share capital. Since the year end and at the time of writing the Company has repurchased a further 1,573,242 shares into Treasury, at a cost of £11 million.

The Company will again ask shareholders to approve the repurchase of up to 14.99% of its capital at a discount to estimated NAV of the Company's shares at the forthcoming Annual General Meeting. We will also be seeking shareholder permission to issue shares, where the Board is confident of sustainable market demand. The authority, if approved, will allow the Company to issue up to 10% of its issued share capital from Treasury. The Company will only issue shares at a price in excess of the estimated NAV, including income and with the value of the debt at fair value.

Dividends

The Company paid an interim dividend in respect of the 2021 financial year of 2.5p on 8th October 2021. Subject to shareholder approval at the AGM, a final dividend of 4.5p will be paid on 27th May 2022 to shareholders on the register on 22nd April 2022, making a total of 7.0p per share, an increase of 3.7% on last year's total of 6.75p per share. After the payment of the proposed final dividend, the balance in the revenue reserves will be £21,163 million, equivalent to 10.9p per share (2020: 11.6p) or 1.6 times (2020: 1.7 times) the current dividend. The prudent approach of building up revenue reserves in prior years provides the Board with a means of supporting current dividend levels, and in the future should earnings per share drop materially in any financial year.

Whilst capital growth is the primary aim of the Company, the Board is aware that dividend receipts can be an important element of shareholder returns. The Board continues to monitor the net income position of the Company and based on current estimated dividend receipts for the year ahead, the Board aims at least to maintain the aggregate 2021 dividend in the forthcoming year.

Environmental, Social and Governance ('ESG')

As indicated in my half year statement in August 2021, this Annual Report contains more detailed information on the ongoing engagement the Board has been having with the Manager on ESG considerations. Pleasingly the Manager has been making further progress in the integration of ESG factors into its company research process. The consequences of the war in Ukraine are going to impact and affect ESG thinking for all asset owners and investment managers as energy security and increased defence spending impact investment decision making. The Board and Manager will be evaluating carefully together the impact of these consequences for the further integration of ESG factors in the Company's portfolio. Further information can be found in the Manager's ESG Report in the full Annual Report.

The Board

As previously announced, on 1st September 2021 Mr. Simon Bragg retired from the Board and Ms. Claire Binyon took on the role of Audit Chair. There has been no other change to the composition of the Board during the year.

Sir Alan Collins will have served as a director for ten years at the date of the 2022 AGM. The Board believes that due to his significantly positive contribution to the Company, in particular to his role as the Senior Independent Director, leading the Risk and Remuneration Committees, and his knowledge of the United States, it would be in the Company's best interests for Sir Alan's appointment as a director to be continued for a further year. Sir Alan has responded positively to the Board's request for him to remain a director, pending his retirement at the conclusion of the AGM in 2023, subject to shareholders agreeing to his reappointment at the forthcoming AGM. The succession plan for the Board is well advanced and it is planned to undertake a search for a new director to be appointed during 2022.

The results of this year's Board evaluation process confirmed that all Directors possess the experience and attributes to support a recommendation to shareholders that they seek re-appointment at the Company's forthcoming Annual General Meeting. In line with the AIC Code of Corporate Governance, additional statements to support the re-appointment of each Director are included in the Annual Report.

Shareholder engagement

During the year the Senior Independent Director, Sir Alan Collins, and I had the opportunity to meet some of the leading shareholders of the Company to hear their views and to discuss various matters including gearing policy, ESG developments, the portfolio's small capitalisation stock exposure and the Board's stated buyback policy when the shares trade on anything other than a small discount in normal market conditions. The Board believes these shareholder interactions are very helpful in assisting it to manage the Company's affairs.

The two portfolio managers, Tim Parton and Jonathan Simon, also held three calls with shareholders and posted regular portfolio and market updates on the Company's website during the year. These interactions have been well received by shareholders.

Annual General Meeting

This year's Annual General Meeting is the Company's 106th and it will be held on Wednesday, 18th May 2022 at 2.30 p.m. at 60 Victoria Embankment, London EC4Y 0JP. Apart from the formal business of the meeting, the shareholders will have the opportunity to hear from our two portfolio managers, Timothy Parton and Jonathan Simon who will be presenting virtually, followed by a question and answer session. Shareholders are invited to attend the meeting and raise any questions they have, either by asking questions at the meeting, or in advance by writing to the Company Secretary at the address on page 95 of the Annual Report, or via email to [email protected]. As is normal practice, all voting on the resolutions will be conducted on a poll. The Board strongly encourages all shareholders to exercise their votes by completing and returning their proxy forms in accordance with the notes to the Notice of Meeting in the Annual Report.

For shareholders who wish to follow the AGM proceedings, but choose not to attend in person, we will be able to offer participation via video conference. Details on how to register, together with access details, can be found on the Company's website: www.jpmamerican.co.uk. Due to technological reasons, shareholders viewing the meeting via conferencing software will not be able to vote on the poll and we therefore especially encourage those shareholders who cannot attend in person, to exercise their votes in advance of the meeting by completing and submitting their form of proxy. Shareholders are also encouraged to send any questions to the Board, via the Company Secretary, at the email address above, ahead of the AGM. We will endeavour to answer all relevant questions at the meeting, or via the website, depending on arrangements in place at the time.

If there are any changes to the arrangements for the Annual General Meeting, the Company will update shareholders through the Company's website and, if appropriate, through an announcement to the London Stock Exchange.

Outlook

The human tragedy of the Russian invasion of Ukraine continues to unfold with no end in sight at the time of writing. The longer term economic and market consequences are likely to be material as the sanctions regime imposed on Russia takes effect. Energy security and raised defence spending will be priorities for some years to come, and will play out against a background of tightening monetary policy and rising interest rates as the Federal Reserve and other central banks tackle the present high inflation environment.

Unfortunately, the near-term outlook would appear to be one of stagflation in which below average economic growth is accompanied by above average inflation. Equities are often quite volatile in this kind of environment and it would seem prudent to make that a working assumption this time as well. The comparative self-sufficiency of the US economy, and the depth of the US stock market are significant positive factors underpinning your Company's investment objective. Combined with the long experience of our two portfolio managers I am hopeful that the Company's portfolio will prove to be resilient through these more challenging times.

Dr Kevin Carter

Chair                                                                                                                                                    1st April 2022

INVESTMENT MANAGER'S REPORT

Market Review

2021 was another strong year for US equities, as the S&P 500 Index returned 28.7% (in US dollar terms), its third consecutive calendar year of double-digit gains. The S&P 500 has more than doubled over the last three years, a remarkable and surprising outcome amidst the prolonged interference of the Covid pandemic.

Encouraging economic data and robust corporate earnings results buoyed the stock market throughout the year, with the S&P 500 posting a historic record of 70 new all-time highs. Economic recovery was propelled by extraordinary fiscal and monetary stimulus. US GDP recovered to pre-pandemic levels and unemployment fell from 6.2% in January 2021 to 3.9% by December 2021. Labour market tightness allowed workers to enjoy rising wages, in addition to higher house and other asset prices, and this in turn supported consumer spending.

The equity market rally was not without its challenges, as several volatility shocks tested investors' resilience. Early in the year, an unprecedented retail-driven short squeeze in so-called 'meme stocks' - companies that acquire cult-like followings on social media and online platforms - whipsawed the market. This was followed by threats from new Covid-19 variants, including the highly infectious Omicron strain. Concerns about inflation began to mount, compounded by intense supply chain disruptions. Oil prices also surged. The spot price of Brent crude, a global benchmark, started 2021 at US$50 per barrel and reached a high of US$86 in late October. Oil prices eased in the final weeks of the year, but have since reached fresh highs.

Anxiety about inflation unsettled US bonds during the first quarter, and again in Q4, as inflation readings confirmed investors' fears. In November, the US Consumer Price Index (CPI) jumped to 6.8% year-on-year, its highest reading in 39 years. Persistent inflationary pressures, combined with rapidly tightening labour market conditions, led the Federal Reserve to adopt a more hawkish stance, and the market now expects the Fed to begin the process of shrinking its own inflated balance sheet in Q1 2022, paving the way for a sequence of interest rate hikes this year.

Within the S&P 500, all eleven industrial sectors of the index posted double-digit gains over the past year, led by energy, which rose 55%. Expectations about the near-term outlook for oil prices were low at the start of the year, so this sharp rally in oil prices took the market by surprise. Another top performing sector in the S&P 500 was financials, which returned 35% for the period. The defensive utility and consumer staples sectors delivered more modest growth and lagged the S&P 500. However, they still enjoyed very healthy returns of +18% and +19% respectively.

After lagging small cap stocks for the first six months of the year, large cap stocks, as represented by the S&P 500, rallied strongly during the second half of the year, to end 2021 up 28.7% (in US dollar terms), significantly ahead of the small cap Russell 2000, which returned 14.8%. Growth stocks experienced a similar reversal of fortunes over the year. They lagged value names for several months from late 2020 onwards, following the arrival of vaccines which boosted confidence in the economic recovery. However, the Russell 3000 Growth index rose strongly in the final six months of 2021 after new Covid variants cast a temporary shadow over the economic re-opening. The resurgence of both large cap and growth stocks in the latter half of 2021 actually tell the same story - a marked defensive rotation into the resilient, mega cap technology companies that now comprise a significant portion of the US market. The extent of this rotation is powerfully illustrated by the fact that the valuations of both Apple and Microsoft now each exceed the market value of the entire FTSE 100 index.

Performance and Overall Asset Allocation

The Company's net asset value rose by 28.1% in total return terms for the full year, modestly below the return of the S&P 500, which rose 29.6% in sterling terms. Gearing provided a positive contribution to performance given the rising markets, but our small cap growth allocation struggled during the year and detracted most from relative performance, as it posted a negative return for the period.

PERFORMANCE ATTRIBUTION

FOR THE YEAR ENDED 31ST DECEMBER 2021

Source: JPMAM and Morningstar. All figures are on a total return basis.

Performance attribution analyses how the Company achieved its recorded performance relative to its benchmark index.

¹            The impact of fair valuation includes the effect of valuing the combined $100m private placements at fair value. It is the sum of the impact on the closing NAV of the fair value adjustment and its impact on the calculation of total returns arising from the reinvestment of dividends paid in the year into the Company's NAV.

^APM        Alternative Performance Measure ('APM').

A glossary of terms and APMs is provided on pages 91 to 93 of the Annual Report.

Large cap portfolio

The Company's large cap holdings posted a positive return over the year, but slightly lagged the S&P 500. In terms of portfolio positioning, our sector weights remain a by-product of our bottom-up investment analysis and our disciplined approach to portfolio construction. We remain focused on owning high quality businesses with durable competitive advantages, which we believe will provide stability should economic fundamentals deteriorate or uncertainties escalate.

Large Cap Portfolio Stock Attribution

As of 31st December 2021

Source: Wilshire. Excludes Cash & Gearing (USD). The data provided is based on stock selection relative to total return and ending weight relative to S&P 500 Index.

The portfolio is actively managed. Holdings, sector weights, allocations and leverage, as applicable, are subject to change at the discretion of the investment manager without notice.

Past performance is not a reliable indicator of current and future results.

Source: Wilshire. Excludes Cash & Gearing (US$).

^*        Indicates stock was not held as of 31st December 2021.

¹        Based on combining the positions of both Discovery share classes (DISCA and DISCK) which are listed in the S&P 500.

      The portfolio is actively managed. Holdings, sector weights, allocations and leverage, as applicable, are subject to change at the discretion of the investment manager without notice. Past performance is not a reliable indicator of current and future results.

Our positions in the information technology and consumer discretionary sectors trailed their benchmark peers groups, detracting from performance. Within information technology, weak returns from our positions in payments companies, including Global Payments, Mastercard and PayPal, hindered relative performance. These names came under pressure from short-term business headwinds as the Omicron variant sparked fears of renewed lockdowns. In addition, these companies are facing tough competition from newer entrants and newer payment methods. However, Global Payments and Mastercard in particular are now benefiting from consumers' renewed appetite for travel, dining out and other entertainment, and their valuations have compressed to attractive levels, so we continue to hold these names in the portfolio.

In the consumer discretionary space, our overweight position in Gap, the clothing retailer, was the largest detractor, as supply chain disruptions weighed on earnings and margins. Management lowered full year sales and earnings guidance in response to these setbacks. However, we believe these are short term concerns and we still like Gap's long-term prospects, due to the company's international presence and its 'omni-channel' strategy, which combines retail stores with an online retail platform and cross-channel initiatives that seek to integrate customers' instore and digital interactions, and maximise their value. Gap also benefits from a disciplined management team that continues to close unprofitable stores and focus on more profitable and higher growth areas of the business such as Old Navy and Athleta, its leisure brand.

Still within the consumer discretionary sector, our lack of exposure to Tesla for some of the year also hindered performance. We had exposure to the electric vehicle and solar energy company for the first six months of the year, but exited our position in June on valuation concerns. We reversed that decision in October after the company reported strong Q3 earnings, well ahead of consensus estimates, despite the global semiconductor shortage and other supply-chain challenges that have stymied its competitors. Better margins in its automotive segment allowed Tesla to achieve a consolidated US GAAP operating margin of 14.6%, the highest profit margin of any volume car manufacturer, which validated our investment thesis for reinvesting in the name.

The adverse performance impact of these positions was partially offset by positive contributions from our sector allocations in financials, and by our stock selection in healthcare and consumer discretionary. The trust's overweight in financials was especially beneficial, as financials was one of the best performing sectors in the S&P 500 over the year, supported by the robust economy, good credit fundamentals and low levels of household debt. Bank stocks were also boosted as investors brought forward their expectations of higher interest rates. Our financial names outperformed their benchmark peer group, with the largest contributions to returns coming from our overweight positions in Bank of America, Capital One Financial and Charles Schwab.

We remain confident in the ability of Bank of America's management to grow margins through efficiency improvements, and the diversity of its business mix is another positive. Capital One Financial, another bank, produced strong quarterly results throughout the year and we continue to like the company's approach to online banking and disciplined capital management. Furthermore, both these institutions have healthy capital reserves, which creates a compelling case for additional capital return. Charles Schwab, a wealth manager and financial services provider, generated impressive revenue and earnings growth in 2021 due to rising short term interest rates and rapid growth in new accounts and assets under management. Additionally, the company's efforts to integrate TD Ameritrade, a financial advisory business it acquired in 2020, are enhancing Schwab's scale and competitive position. The revenue and cost synergies from this merger will potentially be very favourable, and this is one reason for our positive view on the business. We also like Schwab's high-quality management team, which has a proven ability to deliver impressive asset growth, and we expect earnings to improve further as rates rise.

At the stock level, our healthcare stock selection added value. While the healthcare sector lagged the S&P 500 over the year, our holdings outperformed their benchmark peer group. We benefitted from our overweight position in Dexcom, a medical device company which produces continuous glucose monitoring (CGM) systems for diabetes sufferers. The company reported strong quarterly earnings and raised its full-year guidance for 2021. The adoption of its CGM technology continues to grow rapidly, as it significantly improves patients' ability to manage the disease, and is now being prescribed for sufferers of less acute, Type 2 diabetes. Dexcom's longer-term growth prospects are also supported by the highly anticipated launch of its next generation G7 monitor, which is much smaller, and therefore more convenient for patients to use. The G7 system, which was expected to be launched in 2021, is now expected to be launched in 2022.

Our overweight to AutoZone was the largest contributor to performance within the consumer discretionary sector and overall. AutoZone is a retailer and distributor of automotive replacement parts and accessories. This industry is defensive by nature, and enjoys meaningful tailwinds and high barriers to entry and AutoZone is a leading player. Its earnings pattern, which is steadier than its competitors', is testament to its well-managed, variable cost structure. The stock rallied throughout the year on the back of strong quarterly results and we anticipate that demand for auto parts will remain high, for several reasons. Firstly, vehicle usage is returning to pre-pandemic levels. Furthermore, and somewhat perversely, the inevitable transition to electrical vehicles (EVs) is having a twofold impact on demand for parts for conventional cars. The shortage of semiconductors is delaying the production of EVs, so car owners looking to switch to EVs are being forced to wait, and must therefore keep, and maintain, their current vehicles in the meantime. Other motorists are forestalling their purchases of much more expensive EVs, which tend to be about twice the price of conventional cars, by extending the life of their current vehicles via increased maintenance.

During the year, we made some changes to our large cap holdings, adding 16 new names and exiting the same number. For example, we increased our industrials exposure via the acquisitions of Deere and Trane Technologies. Deere is a well-known leader in the production and distribution of agricultural equipment, including tractors. The company is developing cutting edge technology, including the use of machine learning and artificial intelligence, to significantly increase productivity. This development has strengthened Deere's competitive leadership and should help to improve its long term pricing power and profitability. Trane is a manufacturer of climate control and heating, ventilation, and air conditioning (HVAC) systems. Its management is focused on sustained improvement in revenues, earnings and cash flow, and the company offers a very attractive blend of commercial, residential and transportation-related businesses. A high proportion of revenue comes from recurring servicing fees. Trane has the added appeal of being an industry leader in the adoption of environmentally-friendly business practices. As a part of its 2030 strategic plan, the company has committed to making its internal operations carbon neutral and net positive in water usage, while also pledging to cut the carbon footprint of its products (and thus its customers' combined carbon footprint) by one gigaton of carbon emissions.

In the healthcare space, we added Bristol Myers-Squibb, a global biopharmaceutical company. The company has a healthy product pipeline, including some that originated from its acquisition of Celgene a few years ago. The stock trades at a very attractive valuation, with a sturdy dividend yield fortified by strong free cash flow generation.

These and other acquisitions across the large cap portfolio were funded by the disposal of other names, including toolmaker Stanley Black & Decker, which we sold due to concerns about rising commodity prices and other costs that will adversely impact its profit margins. We also expect demand for its products to plateau as the housing cycle matures. Towards year-end we also exited our position in Meta Platforms, the social media platform (formerly Facebook). The company is the subject of intensifying negative publicity related to its invasive data policies and its unwillingness to stop the spread of misinformation on its platform. These claims are attracting mounting scrutiny from regulators and politicians. Despite posting better than expected earnings, the stock began to decline as Q3 revenue undershot estimates and the company became embroiled in further controversy generated by a whistle-blower's allegations about its business practices. Our disposal of this stock was timely, as it has since declined precipitously.

These acquisitions and sales did not have a significant impact on the portfolio's underlying composition. On a sectoral basis, information technology and financials remain our two largest allocations. Together they represent approximately 40% of the overall portfolio. However, their weightings relative to the S&P 500 diverge, as information technology is our largest underweight, while financials is our biggest overweight. We have another notable underweight in consumer staples, although we have been selectively adding to our exposure this year. However, in general, we continue to find names with better risk/reward profiles in other areas of the market.

As we have discussed in previous reports, within the large cap portfolio, we allocate capital between separate value and growth stock sleeves, with the mix allowed to vary between 60:40 and 40:60. At year end, we had a slight tilt towards growth stocks, with a 52% exposure, compared to a 48% exposure to value names. The chart overleaf provides an overview of the split between value and growth in the large cap strategy since the change in investment approach in June 2019. However, when considering the whole portfolio relative to the S&P 500, we actually have a bias towards value, as measured by Barra. This value bias is also demonstrated by the fact that amongst our top ten overweight names, all but one are from the value sleeve.  

The table below illustrates some key characteristics of the large cap portfolio as a whole. Notably, the portfolio is trading at a discount to the market on both a Price to Earnings and a Price to Free Cash Flow basis. The portfolio, trading at a 14% discount to the market on a free cash flow basis, is at an attractive level and indicates we are not paying a premium for good cash flow.

Source: Factset, J.P. Morgan Asset Management. Data as of 31st December 2021.

¹     Includes negatives.

Small cap portfolio

After two successive years of good performance, the market environment during the review period was very challenging for our small cap growth names. In particular, areas of the small cap market that are perceived to be more direct beneficiaries of the economic reopening performed relatively well, while more expensive, higher growth small cap stocks consolidated or posted more modest gains. As a result, the cheapest stocks with the lowest growth rates and the smallest market caps performed the best, outpacing the larger, higher growth stocks we favour. However, despite the challenges faced by our small cap growth holdings in 2021, we are confident that these names can make a meaningful contribution to returns over the long term, and we have maintained our overall allocation to the small cap portfolio at approximately 5%.

Market Outlook

As we entered 2022, US economic activity remained strong, the US consumer in aggregate was in good health, with plenty of spending power, and there seemed to be little evidence to suggest that the economic recovery would be derailed. However, we recognise that we are confronting some challenges. The human toll of any conflict is devastating and events unfolding in Ukraine are deeply upsetting. The Russian invasion of Ukraine resulted in international sanctions on the country and the potential that the markets could face elevated volatility ahead. Oil prices continued to rise due to geopolitical tensions and supply side issues.

In the US the economic cycle is maturing and the Federal Reserve is about to embark on a more restrictive course, which always presents a headwind for the market, especially highly valued growth stocks. Inflation and other uncertainties, such as the tightening liquidity, the variants of Covid-19, and sensitivity to the imposed economic sanctions, is likely to be integral to investor sentiment moving forward.

With the most vigorous part of this recovery now behind us, we are likely to maintain a fairly low risk posture, with a particular focus on valuations. Nonetheless, as always, we will remain on the look-out for attractive investment opportunities that may be created by periods of unusual volatility.  

Timothy Parton

Jonathan Simon

Portfolio Managers                                                                                                                                  1st April 2022

PRINCIPAL AND EMERGING RISKS

TRANSACTIONS WITH THE MANAGER AND RELATED PARTIES

Details of the management contract are set out in the Directors' Report The management fee payable to the Manager for the year was £4,075,000 (2020: £2,795,000) of which £nil (2020: £nil) was outstanding at the year end.

With effect from 1st June 2019, for a period of nine months, the management fee was waived. Therefore, the management fee figure for 2020 reflects the ten months paid for the period 1st March 2020 to 31st December 2020.

Included in administration expenses in note 6 are safe custody fees amounting to £13,000 (2020: £10,000) payable to JPMorgan Chase Bank N.A. of which £2,000 (2020: £2,000) was outstanding at the year end.

Handling charges on dealing transactions amounting to £12,000 (2020: £13,000) were payable to JPMorgan Chase Bank N.A during the year of which £3,000 (2020: £2,000) was outstanding at the year end.

The Manager may carry out some of its dealing transactions through group subsidiaries. These transactions are carried out at arm's length. The commission payable to JPMorgan Securities Limited for the year was £nil (2020: £nil) of which £nil (2020: £nil) was outstanding at the year end.

The Company also holds cash in the JPMorgan US Dollar Liquidity Fund, which is managed by JPMF. At the year end this was valued at £28.3 million (2020: £43.4 million). Income amounting to £55,000 (2020: £268,000) was receivable during the year of which £nil (2020: £nil) was outstanding at the year end.

At the year end, total cash of £36,000 (2020: £76,000) was held with JPMorgan Chase Bank N.A. A net amount of interest of £nil (2020: £nil) was receivable by the Company during the year from JPMorgan Chase of which £nil (2020: £nil) was outstanding at the year end.

Full details of Directors' remuneration can be found in the full Annual Report.

STATEMENT OF DIRECTORS' RESPONSIBILITIES

The Directors are responsible for preparing the Annual Report & Financial Statements in accordance with applicable law and regulations.

Company law requires the Directors to prepare the Annual Report & Financial Statements for each financial year. Under that law, the Directors have elected to prepare the financial statements in accordance with United Kingdom Generally Accepted Accounting Practice (United Kingdom Accounting Standards and applicable law). Under company law the Directors must not approve the Financial Statements unless they are satisfied that, taken as a whole, the Annual Report & Financial Statements are fair, balanced and understandable, provide the information necessary for shareholders to assess the Company's position, performance, business model and strategy and that they give a true and fair view of the state of affairs of the Company and of the total return or loss of the Company for that period. 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 a 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.

The Directors are responsible for keeping proper accounting records that are sufficient to show and explain the Company's transactions and disclose with reasonable accuracy at any time the financial position of the Company and to enable them to ensure that the financial statements comply with the Companies Act 2006. They are also responsible for safeguarding the assets of the Company and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.

The accounts are published on the www.jpmamerican.co.uk website, which is maintained by the Company's Manager. The maintenance and integrity of the website maintained by the Manager is, so far as it relates to the Company, the responsibility of the Manager. The work carried out by the Auditor does not involve consideration of the maintenance and integrity of this website and, accordingly, the Auditor accepts no responsibility for any changes that have occurred to the accounts since they were initially presented on the website. The accounts are prepared in accordance with UK legislation, which may differ from legislation in other jurisdictions.

Under applicable law and regulations the Directors are also responsible for preparing a Directors' Report, Strategic Report, Statement of Corporate Governance and Directors' Remuneration Report that comply with that law and those regulations.

Each of the Directors, whose names and functions are listed on page 38 of the Annual Report, confirms that, to the best of their knowledge:

•        the financial statements, which have been prepared in accordance with United Kingdom Generally Accepted Accounting Practice (United Kingdom Accounting Standards and applicable law), give a true and fair view of the assets, liabilities, financial position and return or loss of the Company; and

•        the Strategic Report includes a fair review of the development and performance of the business and the position of the Company, together with a description of the principal risks and uncertainties that it faces.

The Board confirms that it is satisfied that the Annual Report & Financial Statements taken as a whole are fair, balanced and understandable and provide the information necessary for shareholders to assess the strategy and business model of the Company.

The Board also confirms that it is satisfied that the Strategic Report and Directors' Report include a fair review of the development and performance of the business, and the position of the Company, together with a description of the principal risks and uncertainties that the Company faces.

For and on behalf of the Board                                                                                                             1st April 2022

Dr Kevin Carter

Chair

STATEMENT OF COMPREHENSIVE INCOME

FOR THE YEAR ENDED 31ST DECEMBER 2021

STATEMENT OF CHANGES IN EQUITY

FOR THE YEAR ENDED 31ST DECEMBER 2021

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

STATEMENT OF FINANCIAL POSITION

AS AT 31ST DECEMBER 2021

STATEMENT OF CASH FLOWS

FOR THE YEAR ENDED 31ST DECEMBER 2021

NOTES TO THE FINANCIAL STATEMENTS

FOR THE YEAR ENDED 31ST DECEMBER 2021

1.       Accounting policies

(a)     General information and basis of accounting

The Company is a closed-ended investment company incorporated in the UK. The address of its registered office is at 60 Victoria Embankment, London, EC4Y 0JP.

The financial statements are prepared under the historical cost convention, modified to include fixed asset investments at fair value, in accordance with the Companies Act 2006, United Kingdom Generally Accepted Accounting Practice ('UK GAAP'), including FRS 102 'The Financial Reporting Standard applicable in the UK and Republic of Ireland' 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.

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

The financial statements have been prepared on a going concern basis. The disclosures on going concern on page 52 of the Annual Report form part of these financial statements.

The policies applied in these financial statements are consistent with those applied in the preceding year.

2.       Return per share

3.       Dividends

(a)     Dividends paid and proposed/declared

All dividends paid and declared in the period have been funded from the Revenue Reserve.

The dividends proposed in respect of the year ended 31st December 2020 amounted to £8,439,000. However, the amount paid amounted to £8,350,000 due to shares repurchased after the balance sheet date but prior to the share register record date.

In accordance with the accounting policy of the Company, the dividend declared in respect of the year ended 31st December 2021, will be reflected in the financial statements for the year ending 31st December 2022.

(b)    (Dividends) for the purposes of Section 1158 of the Corporation Tax Act 2010 ('Section 1158')

The requirements of Section 1158 are considered on the basis of dividends declared in respect of the financial year, shown below. The revenue available for distribution by way of dividend for the year is £11,685,000 (2020: £12,893,000).

The revenue reserve after payment of the final dividend will amount to £21,163,000 (2020: £22,993,000).

4.       Net asset value per share

        Status of results announcement

2020 Financial Information

The figures and financial information for 2020 are extracted from the published Annual Report and Financial Statements for the year ended 31st December 2020 and do not constitute the statutory accounts for that year. The Annual Report and Financial Statements for the year ended 31st December 2020 has been delivered to the Registrar of Companies and included the Report of the Independent Auditor which was unqualified and did not contain a statement under either section 498(2) or section 498(3) of the Companies Act 2006.

2021 Financial Information

The figures and financial information for 2021 are extracted from the published Annual Report and Financial Statements for the year ended 31st December 2021 and do not constitute the statutory accounts for that year. The Annual Report and Financial Statements include the Report of the Independent Auditor which is unqualified and did not contain a statement under either section 498(2) or section 498(3) of the Companies Act 2006. The Annual Report and Financial Statements for the year ended 31st December 2021 will be delivered to the Register of Companies in due course.

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.

1st April 2022

For further information:

Priyanka Vijay Anand

JPMorgan Funds Limited             020 7742 4000

ENDS

A copy of the 2021 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 also be available on the Company's website at www.jpmamerican.co.uk where up-to-date information on the Company, including daily NAV and share prices, factsheets and portfolio information can also be found.

JPMORGAN FUNDS LIMITED