JPMorgan Global Growth & Income (JGGI)

01/10/2021

Results analysis from Kepler Trust Intelligence

JPMorgan Global Growth & Income (JGGI) has reported its full year results for the year end 30 June 2021. Over the year it managed to generate a NAV total return of 32.3% over its 2021 financial year, and a share price return of 33.0%, outperforming its benchmark, the MSCI ACWI Index, which returned 24.6%.

Much of this performance was the result of the team being allowed a greater amount of flexibility when selecting stocks, compared to more conventional equity income strategies, due to its policy of paying out 4% of NAV as a dividend. This led to JGGI paying a full year dividend of 13.16p per share for FY 2021, a 1% increase on the prior payout. Thanks to the success of JGGI's managers in navigating the various phases of the pandemic, and thus growing the NAV, the board expects to pay a dividend of 16.96p for the next financial year, which will be a 28.9% increase on its recent pay-out of 13.16p per share.

Kepler View

Since adopting its current dividend policy in 2016, JGGI has, in our view, been able to offer investors the unique combination of a high yield combined with a portfolio of quality-growth companies which are not typically associated with an equity income strategy. The trust's relatively idiosyncratic portfolio, when compared to more conventional equity income strategies, also allows it to offer income investors a strong source of diversification, offering investors access to high-growth names their income requirement would typically prevent them from holding.

JGGI's 12-month performance has been almost entirely driven by stock selection, contributing 8.4% to its outperformance. This was largely the result of the team holding high-quality companies during the pandemic, such as media and technology stocks, the COVID-19 'winners', combined with their subsequent rotation into cyclical names during mid-2020, in order to capitalise on the eventual economic rebound.

We believe that JGGI continues to offer income investors not only a strong source of income, but also the attractive ability to access the high-quality growth opportunities, something which, with hindsight, was key in effectively navigating the various phases of the pandemic-driven markets.

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