JPMorgan European Growth & Income | Winterflood Research

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Balanced approach supported by discount control

Background: JPMorgan European Growth & Income* (JEGI) aims to provide long-term capital growth by investing in a portfolio of Continental European equities, with a number of risk controls restricting the extent of active stock, sector and country weights. The fund is managed by Alexander Fitzalan Howard, Zenah Shuhaiber and Timothy Lewis of JPMorgan Asset Management, supported by the firm’s wider International Equity Group.

The fund was previously called JPMorgan European and had two separate share classes (Growth and Income), but these were consolidated in early 2022. JEGI now follows the same strategy as the previous Growth portfolio, but an enhanced dividend policy (i.e. supported by realised capital profits) has been introduced, targeting an annual payout of 4% of NAV as at the end of the preceding financial year.

Discount Control Policy: The fund has also implemented discount risk mitigation policies, which include a buyback commitment to keep the discount to single digits in normal market conditions and a one-off performance-related tender for up to 25% of share capital if the NAV total return lags the benchmark over the five years from 4 February 2022.

Long-term outperformance: JEGI has outperformed its benchmark, the MSCI Europe ex UK Index, over the long-term. The fund has generated an annualised NAV total return of +9.9% and an annualised share price return of +10.3% over the 10 years to 6 April 2023, outperforming the +8.5% p.a. return of the benchmark.

*Denotes a corporate broking client of Winterflood Securities

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