TIDMMATE
RNS Number : 8968Z
JPMorgan Multi-Asset Grwth & Income
18 May 2023
LONDON STOCK EXCHANGE ANNOUNCEMENT
JPMORGAN MULTI-ASSET GROWTH & INCOME PLC
ANNOUNCEMENT OF FINAL RESULTS
The Directors of JPMorgan Multi-Asset Growth & Income plc
announce the Company's results
for the period ended 28(th) February 2023
Legal Entity Identifier:
549300C0UCY8X2QXW762
Information disclosed in accordance with DTR 4.1.
CHAIRMAN'S STATEMENT
Introduction
The objective of the Company is to generate income and capital
growth through a multi-asset strategy, while seeking to maintain
lower levels of volatility than an equity portfolio. Our commitment
to this objective is underpinned by the Company's progressive
distribution policy (adopted on 1st March 2021), which aims to
increase the dividend in line with the UK's annual Consumer Price
Index from the initial distribution level of 4p per share per annum
set at launch in 2018.
Portfolio Performance
For the year ended 28th February 2023, the Company recorded a
negative total return of -5.3% on its opening net asset value, an
underperformance of 11.3% for the year, compared to the Company's
Reference Index. The Company's share price returned -1.5% during
the period as the discount to net asset value narrowed, despite the
prevailing trend over the year of widening discounts across the
investment trust sector. Although the underperformance is
disappointing, it should be noted that the Company's Reference
Index is a total return of 6.0% per annum measured over a rolling
five-year period. Therefore, unlike a typical benchmark, it is not
a relative index and is unaffected by the extremely challenging
market conditions experienced during this reporting period.
2022 was a difficult year for global equity and bond markets.
Post Covid supply chain issues and tight labour markets, combined
with a surge in demand post the pandemic, created inflationary
pressures which were then significantly heightened by the Russian
invasion of Ukraine elevating global energy and commodity prices.
Inflation has remained at persistently higher levels than initially
expected and the resolve of most central Banks to tackle the issue
with increased interest rates have been the prevailing features of
many of the world's major economies in this reporting period.
Equity and bond markets fared poorly in this environment as
economic growth forecasts and corporate earnings expectations have
been successively revised downwards. Heightened geopolitical
tensions have further depressed investor sentiment.
During the reporting period, with the support of the Board, the
Manager transitioned its global equity exposure away from higher
yielding companies to those that they believe offer superior
returns over the long term. Further details of the portfolio are
provided in the investment manager's report on page 11 of the
Company's annual report and financial statements.
Discount Management
The Board recognises that it is in the interests of shareholders
to maintain a share price as close as possible to the Net Asset
Value per share. The Board utilises share buybacks to address
imbalances in supply of and demand for the Company's shares in the
market, when it believes it is in the interests of all shareholders
and subject to normal market conditions. During the 12 months, the
Board utilised its authority to buy back shares in the Company to
narrow the discount and bought back 3,075,000 shares at an average
discount of -4.5%. The discount commenced the period under review
at -4.2% but moved steadily inwards to close on 28th February 2023
at -0.4%. The Company's shares traded at a premium during part of
the year ended 28th February 2023, which allowed the Company to
reissue 100,000 shares from Treasury for a total consideration of
GBP103,800. The Company's average share discount for the year under
review was -2.6%. From 1st March 2023 to 15th May 2023 the Company
bought back 1,625,000 shares. The Company's share price on 15th May
2023 (the last practical date before printing this document), was
94.5p per share, with a discount to net asset value of -3.1% For
further details please see the share capital section on page 26 of
the Company's annual report and financial statements.
Revenue and Distributions
During the 12 months to 28th February 2023, the Company's net
return on revenue after taxation was GBP1,786,000 (2022:
GBP2,650,000). The Board has declared four interim distributions,
each of 1.1p per share in respect of the financial year ended 28th
February 2023, making a total of 4.4p per share for the year (2022:
4.1p). The Company has utilised its power to draw on its
distributable reserves to cover the dividend. The Company did not
'stream' part of these distributions in the year ended 28th
February 2023, as detailed further on page 25 of the Company's
annual report and financial statements.
As referred to in my Chairman's Statement in the Company's half
year report, the Board's aim is to help protect shareholders'
distribution income from the longer term effects of inflation and
so for the Company's year ending 28th February 2024, the Board's
expectation is to pay a total distribution of 4.8p per share. This
represents an increase of 9.1% on the 2023 distribution and an
increase of 20.0% since the distribution policy was adopted on 1st
March 2021. As in previous years, the distributions are expected to
be paid to shareholders in August, November, February and May.
Gearing
The Company may use gearing, in the form of borrowings and
derivatives, to seek to enhance returns over the long term. During
the period the Company had no bank loans/facilities or structured
debt, but did use derivatives to enhance portfolio returns and for
efficient portfolio management. The level of the Company's cash
position at 28th February 2023 was 4.8%, (28th February 2022:
3.0%), reflecting a slight increase in the net cash position of the
Company during this reporting period. See page 25 of the Company's
annual report and financial statements for further details and
definition of Gearing. Further details of the portfolio are
provided in the investment manager's report on page 11 of the
Company's annual report and financial statements.
The Board of Directors
There were no changes to the composition of the Board of
Directors during the reporting period and the intention is to
continue with a complement of four directors.
In compliance with corporate governance best practice, all
Directors will be standing for re-appointment at the forthcoming
Annual General Meeting.
Following the Company's annual evaluation of the existing
Directors, the Chairman, the Board and its Committees, the Board
recommends to shareholders that all directors standing be
reappointed.
In accordance with the AIC 2019 Code of Corporate Governance,
endorsed by the Financial Reporting Council, the Company has
established a separate Remuneration Committee. The Company's
Directors fees and that of the Chairman of the Board and the
Chairman of the Audit Committee were last increased with effect
from 1st March 2022. In order to maintain the fees in line with its
peers, the Board agreed that the current fees should be increased
with effect from 1st March 2023. See page 46 of the Company's
annual report and financial statements for further details.
Continuation Vote and Tender
In accordance with the Company's Articles, the Directors are
required to propose an ordinary resolution that the Company
continues its business as a closed-ended investment company at the
fifth annual general meeting of the Company. If the Continuation
Vote is passed by a simple majority, the Directors are required to
put a further Continuation Vote to Shareholders at the Annual
General Meeting (AGM) of the Company every fifth year thereafter.
Therefore, a continuation vote will be put to shareholders as an
ordinary resolution at the Company's forthcoming AGM to be held on
4th July 2023. The five years of the Company's life has been
particularly turbulent with an extended period of global pandemic
and a major equity and bond sell off during the last financial
year. This has affected the Company's ability to match its absolute
return benchmark over the five year period. Nevertheless the board
has confidence that the JPMorgan Multi-Asset team has both the
resources and experience required to deliver sustainable income and
growth from a diversified multi-asset portfolio. In uncertain times
there is an ongoing need for experienced active managers to help
investors navigate current financial markets, and your Board
recommends to shareholders that they vote in favour of the Company
continuing as an investment trust for a further five year period.
Since the outcome of the continuation vote is not certain, this
represents a material uncertainty which may cast significant doubt
on the Company's future and its ability to continue as a going
concern. Notwithstanding this, the financial statements have been
prepared on a going concern basis, for the reasons noted above.
Investment Manager
The performance of the Manager was formally evaluated by the
Board. Following this review, undertaken in February 2023 by the
Management Engagement Committee, and constructive engagement with
the manager with regard to the investment approach and process, the
Board concluded that the performance of the Manager had been
satisfactory and that their services should be retained. The review
also resulted in the decision to remove the investment restriction
that required the Company to hold a minimum of 50% in listed
equities and fixed income. This change was made in order to afford
the Investment Managers added flexibility in managing the Company's
portfolio.
Environmental, Social and Governance Considerations
As detailed in the Investment Manager's report, Environmental,
Social and Governance ('ESG') considerations are integrated into
the Investment Manager's investment process. The Board shares the
Investment Manager's view of the importance of ESG factors when
making investments for the long term and of the necessity of
continued engagement with investee companies throughout the
duration of the investment. Further information on the Manager's
ESG process and engagement is set out in the ESG Report on pages 15
to 17 of the Company's annual report and financial statements.
Annual General Meeting
The Company's fifth AGM will be held at 60 Victoria Embankment,
London EC4Y 0JP London at 2.30 p.m. on Tuesday, 4th July 2023. We
are pleased that this year we will once again be able to invite
shareholders to join us in-person for the Company's AGM, hear from
the Investment Managers and ask questions. Shareholders wishing to
follow the AGM proceedings but choosing not to attend in person
will be able to view proceedings live and ask questions (but not
vote) through conferencing software. Details on how to register,
together with access details, will be available shortly on the
Company's website at www.jpmmultiassetgrowthandincome.com or by
contacting the Company Secretary at
invtrusts.cosec@jpmorgan.com
My fellow Board members, representatives of JPMorgan and I look
forward to the opportunity to meet and speak with shareholders
after the formalities of the meeting have been concluded.
Shareholders who are unable to attend the AGM are strongly
encouraged to submit their proxy votes in advance of the meeting,
so that they are registered and recorded at the AGM. Proxy votes
can be lodged in advance of the AGM either by post or
electronically: detailed instructions are included in the Notes to
the Notice of Annual General Meeting on pages 88 to 90 of the
Company's annual report and financial statements.
If there are any changes to these arrangements for the AGM, the
Company will update shareholders via the Company's website and an
announcement on the London Stock Exchange.
Outlook
In recent months, at the start of the current calendar year,
global markets had found renewed optimism on the back of China's
successful emergence from its zero-Covid policy and the prospect of
peaking inflation and interest rates. However, post the Company's
financial year end this enthusiasm has been swiftly dampened by the
challenges to the financial system caused by the failure of Silicon
Valley Bank and Credit Suisse in March, and the subsequent turmoil
in the US regional banking sector. Furthermore, geopolitical
tensions continue to unsettle equity markets with Russia's
aggression against Ukraine, China's lack of condemnation of
Russia's invasion tactics, and difficult US/China relations over
Taiwan, US sanctions and US technology transfer to Chinese
companies. In such uncertain markets the Board has confidence in
the breadth and depth of the investment expertise of the JPMorgan
Multi-Asset team. The Investment Managers have the knowledge and
experience to allocate across a wide range of asset classes to
adapt to this challenging economic outlook. The investment trust
structure facilitates a long-term investment outlook and the
Company's progressive dividend policy should provide some
reassurance to shareholders in the current environment of
exceptionally high levels of inflation.
Sarah MacAulay
Chairman 17th May 2023
INVESTMENT MANAGERS' REPORT
Introduction
In this report, we review the Company's investment performance
for the year ending 28th of February 2023. The period witnessed
heightened volatility with Russia's invasion of Ukraine, central
banks pivoting aggressively to combat high and stubborn inflation,
fading yet still widespread effects of global pandemic, and
elevated political uncertainty shifting the landscape of economies
globally. We review how the Company's diversified portfolio has
performed in this environment, how our asset allocation has evolved
and how we are positioned for the year ahead.
Setting the scene - Our investment approach
We seek to achieve attractive returns by investing in a globally
diversified portfolio that includes company shares, bonds, and
other assets. Our aim is to construct a well-balanced portfolio
which is flexible with respect to both asset class and geography.
This flexibility allows us to take advantage of the best
opportunities to deliver an attractive total return to our
shareholders. We take a research-based approach, positioning assets
in line with our medium- to long-term view of markets and
leveraging the expertise of active managers in portfolio
construction.
Market review: A challenging period for markets as supply chain
disruptions, the lagged effect of loose monetary and fiscal policy
and Russia's invasion of Ukraine caused US and UK inflation to
surge to its highest level in 40 years.
The financial year proved to be a volatile and challenging year
for investors as markets faced several headwinds: the Russian
invasion of Ukraine and resultant impact on global energy supply,
central bank action to combat stubbornly high inflation and ongoing
Covid-19 related lockdowns in China. Equity and bond markets
suffered significant decline through the year, with some
improvement towards the period end.
Following a sluggish start to 2022, global equity markets
rebounded in March, however the potential need for a faster pace of
interest rate hikes to combat higher inflation once again started
to dominate investor sentiment. In the second quarter, US headline
inflation reached 8.5%, its highest level since 1981 and remained
elevated in Europe and the UK. Central banks reacted with the
Federal Reserve and Bank of England continuing to raise rates. In
Europe, concerns over potential gas shortages and higher inflation
drove equities lower. Globally, labour markets continued to show
resilience, with unemployment rates across both the UK and Euro
area close to multi-decade lows. Outside of developed markets,
promising news about a drop in Covid-19 infections in China and the
prospect of an easing of lockdowns led to an improvement in growth
expectations across emerging markets.
Markets staged somewhat of a recovery in July; economic news in
the US revealed business activity was still in expansionary
territory and US job prints were strong. However, inflation
remained stubbornly high and in response, central banks continued
to raise rates with the ECB delivering its first-rate hike in over
a decade in July, followed by a second hike in September. The
recovery in equity markets proved to be short-lived, as central
banks' narrative around their commitment to bring inflation under
control, despite inherent risks to the growth outlook, led to
further declines in equity and bond markets through August and
September. In the UK, the fiscal package that was announced under
the leadership of Liz Truss was poorly received by markets, sending
Sterling to an all-time low in September together with significant
losses in the UK gilt market.
Risk assets rallied in October and continued to perform strongly
in November, as markets anticipated a slowing in the pace of
tightening of financial conditions on the back of moderating
inflationary pressures, although some of these gains were reversed
in December. The major central banks delivered another round of
policy rate hikes during the final quarter of the year. The Bank of
Japan unexpectedly widened its target range for 10-year Japanese
government bonds which led to a sell-off in markets towards the
year end. Emerging markets posted stronger returns over the quarter
as investors welcomed the easing of Covid-19 restrictions and the
weaker US dollar.
2023 started on a more optimistic note on the back of improving
investor sentiment regarding the outlook for the global economy.
Fading recession risks in Europe due to a mild winter and signs of
slowing inflation in January in the US and Eurozone strengthened
market hopes that central banks could end their hiking cycles soon.
Meanwhile in China, the prospect of a release of pent-up demand on
the back of the fast re-opening raised expectations that the
Chinese economy would experience a strong recovery in the first
half of 2023. However, both equity and fixed income markets once
again came under pressure in February as markets recalibrated
higher terminal rate expectations following resilient economic and
inflation data. One exception was European equities which performed
strongly due to the fall in energy prices, rebounding consumer and
business confidence and reduced risk of recession in the
region.
How has the Company performed over the year under review?
The Company delivered a negative return on net assets of -5.3%
over the year, underperforming the Company's Reference Index of
+6.0% over a five year rolling period.
The most significant driver of negative performance was our
fixed income exposure, with our government bond positions in
aggregate suffering significant decline. While we maintained a
lower exposure to equities on average through the year relative to
longer term averages, our aggregate equity exposure also provided a
negative contribution to return, driven by our emerging market
exposure and our decision to reduce overall European equity
exposure. Our global equity manager performed well ahead of the
broad equity market over the period, generating positive absolute
returns. In an environment where broad equity and fixed income
markets struggled, our alternative fund holdings generated positive
returns, proving their diversification benefit.
Portfolio review
We made significant changes in our asset allocation through the
period as we continued to position the Company in line with
favoured markets and regions. While we entered the review period
with a slight overweight to equities, we began scaling this back in
March 2022 as the global macro environment and investor sentiment
deteriorated. We continued to reduce exposure through the summer
months before adding back to the asset class in January this year,
when inflation prints looked to be moderating, recession risks in
Europe were fading and the growth outlook for China dramatically
improved owing to the removal of the Zero-Covid-19 policy.
While stock selection is undertaken by our in-house
International Equity Group, we tilt regional positioning to reflect
our latest views, implemented via index futures.
We reduced our physical global equity allocation in March 2022
and took down exposure further using regional equity futures. We
scaled back our European equity allocation given concerns around
the impact of the Russian Ukraine war and having initially added to
the US as a high-quality equity market, reduced this allocation
from May. We further reduced equity exposure in these regions
through the summer months, as central banks continued with their
hiking paths to curb stubbornly high inflation. While we added back
to Europe from August, we continued to reduce our US equity
exposure which proved beneficial. We increased our overall equity
weight by 10% in January, adding to both developed and emerging
markets as markets rallied during the month as investors
anticipated a deceleration in the pace of rate hikes from the
Federal Reserve.
In the Company's portfolio of fixed income investments, we
actively managed duration, generally favouring long-dated US
government bonds. We maintained low levels of duration for much of
2022 although we began adding back to US Treasuries at the end of
the year whilst maintaining shorts in JGB's and 10-year Bunds
before adding again at the start of 2023. Outside of government
bonds, we significantly reduced high yield bond exposure and
removed both global convertible and emerging market debt holdings
as we looked to moderate overall risk in the portfolio. Having
removed our investment grade corporate bond holding in 2020, we
reintroduced this in January as overall risk appetite increased, at
a level less than half of our long-term strategic weight. We also
re-introduced a small emerging market debt position as we felt
there would be some relative value opportunities in parts of local
currency emerging market debt.
Our bespoke equity portfolio generated positive returns relative
to the MSCI World Index. We made some changes in the composition of
the equity portfolio at the end of July when we moved from an
approach that focused on companies that generate high and rising
income, to one that uses an actively managed, bottom-up,
research-driven approach to outperform the MSCI World Index. This
change highlights the flexibility in portfolio construction and
ability to represent favoured asset classes and styles in the
portfolio in line with forward looking views.
At a sector level, the largest contributors to performance were
pharmaceutical/medtech and retail. Detractors included banks and
telecommunications. At a stock level, Analog Devices, the US
semiconductor company, was one of the largest contributors. The
stock performed very strongly over the period after the company
cited 'resilient' demand in its quarterly results. An overweight
position in Volvo, the Swedish automobile company also contributed
to relative returns. The stock rallied as sales increased over the
period despite supply chain issues. On the other hand, our
overweight in Amazon, the US retail and technology company,
detracted from returns. Shares were under pressure after the
company reported results which missed expectations as AWS (their
cloud business) slowed more than expected and retail margins didn't
improve as much as expected. An overweight position in Bank of
America, a US multinational investment bank and financial services
company, also detracted from performance. The stock declined as the
company warned of a negative impact from a weaker global economic
outlook in 2023 with interest rates rising further to tackle
inflation.
Asset Class %
Global Equities 2.0
-----
European Equities -0.3
-----
Emerging Market Equities -1.2
-----
Alternatives 0.9
-----
Government Bonds -2.4
-----
Corporate Bonds -0.1
-----
High Yield -1.2
-----
Emerging Market Debt -0.3
-----
Equity Futures -1.5
-----
Convertibles -0.5
-----
Cash 0.2
-----
-4.4
-----
Ongoing charges -1.1
-----
Share Buybacks 0.2
-----
Other 0.0
-----
Total Return on Net Asset Value(A) -5.3
-----
Source: JPMAM.
(A) Alternative Performance Measure ('APM').
A glossary of terms and APMs is provided on pages 91 and 92 of
the Company's annual report and financial statements.
Outlook
The recent events in the banking sector are likely to lead to a
further tightening of bank lending standards, which could further
slow growth in developed economies, possibly leading to a moderate
recession over the course of the year. However, with little
evidence of extreme excess in the real economy and with better
capitalised banks, we see a repeat of 2008 as unlikely. If the
commercial banks tighten lending standards, the Federal Reserve and
other central banks will need to do less to bring about the desired
slowdown in activity and reduction in inflation. At this stage,
there are considerable uncertainties - in both directions - over
the extent to which the recent turmoil will affect sentiment and
activity. This uncertain backdrop argues against extreme
positioning between or within asset classes. We believe that
investors should maintain balance in their portfolios with a focus
on quality within both equity and bond allocations. Against this
backdrop, we maintain a cautious outlook with a more favourable
view on government bond markets whilst being underweight equities.
Within equities we expect US large cap stocks to outperform small
caps whilst economic resilience in Europe and the UK leads us to
favour these regions. We have become more positive on emerging
markets where we believe the growth recovery in China has further
to run. The government bond markets appear increasingly attractive
as global inflation continues to fade which should re-focus markets
back towards growth concerns and drive a return of the stock-bond
correlation towards more negative levels which is beneficial for
multi-asset portfolios.
Katy Thorneycroft
Gareth Witcomb
Investment Managers 17th May 2023
PRINCIPAL AND EMERGING RISKS
The Directors confirm that they have carried out a robust
assessment of the principal risks and emerging risks facing the
Company, including climate change and those that would threaten its
business model, future performance, solvency or liquidity.
With the assistance of the Manager, the Audit Committee has
drawn up a risk matrix which identifies the key and emerging risks
to the Company. These are reviewed and noted by the Board. The
risks identified and the broad categories in which they fall, and
the ways in which they are managed or mitigated are summarised
below. The AIC Code of Corporate Governance requires the Audit
Committee to put in place procedures to identify emerging risks.
The key emerging risks identified are also summarised below.
Principal Description Mitigating activities
Risk
Investment An inappropriate investment strategy, The Board manages these risks
Strategy for example asset allocation or by diversification of investments
the level of gearing or foreign through its investment restrictions
exchange exposure, may lead to and guidelines, which are monitored
underperformance against the reference and reported on by the Manager.
index or peer companies. This The Manager provides the Directors
may result in the Company's shares with timely and accurate management
trading on a narrower premium information, including performance
or a wider discount. data, revenue estimates, currency
performance, liquidity reports
and shareholder analyses. The
Board monitors the implementation
and results of the investment
process with the Investment
Managers, who attend Board meetings,
and reviews data which show
statistical measures of the
Company's risk profile. The
Investment Managers review the
Company's gearing strategically.
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Financial The financial risks faced by the The Board considers the split
Company include market price risk, in the portfolio between companies,
interest rate risk, liquidity sector and stock selection and
risk and credit risk. levels of gearing on a regular
basis and has set investment
restrictions and guidelines,
which are monitored and reported
on by JPMF. The Board monitors
the implementation and results
of the investment process with
the Manager. However, the performance
of the portfolio is significantly
determined by market movements
in global equity and bond markets.
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Corporate Failure to comply with relevant The Board relies on the services
Governance statute law or regulation may of its Company Secretary, the
and Shareholder have an impact on the Company Manager and its professional
Relations both in terms of fines and in advisers to ensure compliance
terms of its ability to continue with Corporate Governance best
to operate. practice, are set out in the
Some investors within the sector Corporate Governance Statement
will only consider investing into on pages 38 to 42 of the Company's
an investment trust where its annual report and financial
AUM is over a certain level; the statements.
Company's AUM currently stands The Board manages shareholder
below these levels. relations by review of sales
and marketing activity and also
receipt of regular feedback
via the Manager's sales and
marketing teams and the Broker
from both existing and prospective
shareholders.
------------------------------------------- -----------------------------------------
Operational Loss of key staff by the Manager, The Manager takes steps to reduce
such as the Investment Managers, the likelihood of loss of key
could affect the performance of staff by ensuring appropriate
the Company. Disruption to, or succession planning and the
failure of, the Manager's accounting, adoption of a team based approach.
dealing or payments systems or The threat of cyber attack,
the depositary's or custodian's in all its guises, is regarded
records could prevent accurate as at least as important as
reporting and monitoring of the more traditional physical threats
Company's financial position. to business continuity and security.
This includes the risk of cybercrime The Company benefits directly
and consequent potential threat or indirectly from all elements
to security and business continuity. of JPMorgan's Cyber Security
programme. The information technology
controls around the physical
security of JPMorgan's data
centres, security of its networks
and security of its trading
applications are tested by independent
reporting accountants and reported
on every six months against
the Audit and Assurance Faculty
('AAF') standard.
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Accounting, In order to qualify as an investment The Section 1158 qualification
Legal and trust, the Company must comply criteria are continually monitored
Regulatory with Section 1158 of the Corporation by the Manager and the results
Tax Act 2010 ('Section 1158'). reported to the Board each month.
Details of the Company's approval The Board relies on the services
are given on page 24 of the Company's of its Company Secretary, the
annual report and financial statements. Manager and its professional
Was the Company to breach Section advisers to ensure compliance
1158, it would lose its investment with the Companies Act 2006,
trust status and, as a consequence, the FCA Prospectus Rules, Listing
gains within the Company's portfolio Rules, DTRs and the Alternative
could be subject to Capital Gains Investment Fund Managers Directive.
Tax. A breach of the Companies
Act could result in the Company
and/or the Directors being fined
or the subject of criminal proceedings.
Breach of the FCA Listing Rules
or DTRs could result in the Company's
shares being suspended from listing
which in turn would breach Section
1158. The Company must also comply
with the provisions of the Companies
Act 2006 and, since its shares
are listed on the London Stock
Exchange, the FCA Prospectus Rules,
Listing Rules and Disclosure,
Guidance & Transparency Rules
('DTRs').
------------------------------------------- -----------------------------------------
Global Pandemics The outbreak and spread of Covid-19 The Board monitors the effectiveness
demonstrated the risk of global and efficiency of service providers'
pandemics, in whatever form a processes through ongoing compliance
pandemic takes. Should a new variant and operational reporting and
of the virus spread more aggressively there were no disruptions to
or become more virulent, it may the services provided to the
present risks to the operations Company in the year under review.
of the Company, its Manager and The Company's service providers
other major service providers. are capable of implementing
The 'Zero Covid' policy in China business continuity plans which
that was in place during the year include working almost entirely
(although recently withdrawn) remotely. The Board continues
illustrates the negative impact to receive regular reporting
that a pandemic can have on the on operations from the Company's
global economy. major service providers and
would not anticipate a fall
in the level of service in the
event of a re-emergence of a
pandemic.
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Emerging Description Mitigating activities
Risks
------------------------------------------- -----------------------------------------
Climate Change Climate change, which barely registered The Company's investment process
with investors a decade ago, has integrates considerations of
today become one of the most critical environmental, social and governance
issues confronting asset managers factors into decisions on which
and their investors. Investors stocks to buy, hold or sell.
can no longer ignore the impact This includes the approach investee
that the world's changing climate companies take to recognising
will have on their portfolios, and mitigating climate change
with the impact of climate change risks. The Board is also considering
on returns now inevitable. It the threat posed by the direct
is also likely to have a significant impact on climate change on
impact on business models, sustainability the operations of the Manager
and even viability of individual and other major service providers.
companies, whole sectors and even As extreme weather events become
asset classes. more common, the resilience,
business continuity planning
and the location strategies
of our operations and those
of our services providers will
come under greater scrutiny.
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Geopolitical Since the end of the Second World The Company addresses these
Tensions War, the world has enjoyed a technology global developments in regular
and economic hegemony with the questioning of the Manager and
US at its core. With the development with external expertise and
of China as a political, cultural, will continue to monitor these
technological and economic rival, issues, as they develop. The
there is the risk that alongside Manager regularly monitors the
the trade tensions we have seen Company's portfolio holdings
in recent years, there may develop to ensure compliance with any
a rival technology and economic applicable sanctions.
infrastructure which is not compatible
with or available to some of the
companies in which we invest.
This process is likely to be accelerated
by Russia's invasion of Ukraine
in February 2022 and the significant
impact that has had on global
commodities markets.
------------------------------------------- -----------------------------------------
Artificial While it might equally be deemed The Board will work with the
Intelligence a great opportunity and force Manager to monitor developments
(AI) for good, there appears also to concerning AI as its use evolves
be an increasing risk to business and consider how it might threaten
and society more widely from AI. the Company's activities, which
Advances in computing power means may, for example, include a
that AI has become a powerful heightened threat to cybersecurity.
tool that will impact a huge range The Board will work closely
of areas and with a wide range with the Manager in identifying
of applications that include the these threats and, in addition,
potential to disrupt and even monitor the strategies of our
to harm. In addition the use of service providers. Furthermore,
AI could be a significant disrupter the Company's investment process
to business processes and whole includes consideration of technological
companies leading to added uncertainty advancement and the resultant
in corporate valuations. potential to disrupt both individual
companies and the wider markets.
------------------------------------------- -----------------------------------------
TRANSACTIONS WITH THE MANAGER AND RELATED PARTIES
Details of the management contract are set out in the Directors'
Report on page 36 of the Company's annual report and financial
statements. The management fee payable to the Manager for the year
was GBP453,000 (2022: GBP534,000) of which GBPnil (2022: GBPnil)
was outstanding at the year end.
Included in administration expenses in note 6 on page 64 of the
Company's annual report and financial statements are safe custody
fees payable to JPMorgan Chase N.A. amounting to GBP2,000 (2022:
GBP3,000) of which GBPnil (2022: GBP1,000) 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 period was GBPnil (2022: GBPnil) of which GBPnil (2022:
GBPnil) was outstanding at the year end.
The Company holds investments in funds managed by JPMAM. At 28th
February 2023 these were valued at GBP10.8 million (2022: GBP20.2
million) and represented 15.2% (2022: 24.3%) of the Company's
investment portfolio. During the year the Company made GBP6.9
million (2022: GBP11.5 million) purchases and sales with a total
value of GBP15.1 million (2022:GBP13.7 million). Income amounting
to GBP0.9 million (2022:GBP1.7 million) of such investments was
receivable from these investments during the year of which GBPnil
(2022: GBPnil) was outstanding at the year end.
The Company holds investments in Infrastructure Investment Fund
(IIF UK 1 LP), the General Partner of IIF UK 1 LP is an affiliate
of JPMorgan Asset Management (UK) Limited. At 28th February 2023
these were valued at GBP8.8 million (2022: GBP8.0 million) and
represented 12.3% (2022: 9.7%) of the Company's investment
portfolio. During the year the Company made GBPnil (2022: GBPnil )
purchases and GBPnil (2022: GBPnil) sales. Income amounting to
GBP506,000 (2022: GBP900,000) of such investments was receivable
from these investments during the year of which GBPnil (2022:
GBPnil) was outstanding at the year end.
The Company also holds cash in JPMorgan Sterling Liquidity Fund,
which is managed by JPMF. At the year end, this was valued at
GBP1,322,000 (2022: GBP797,000). Interest amounting to GBP74,000
(2022: GBP1,000) were payable during the year of which GBPnil
(2022: GBPnil) was outstanding at the year end.
Handling charges on dealing transactions amounting to GBP45,000
(2022: GBP24,000) were payable to JPMorgan Chase N.A. during the
year of which GBP15,000 (2022: GBP7,000) was outstanding at the
year end.
During the period under review JPMorgan Asset Management
Holdings (UK) Ltd, an affiliate of the Company's Manager did not
acquire any shares in the Company (2022:nil).
At the year end, a bank balance of GBP736,000 (2022: GBP884,000)
was held with JPMorgan Chase. A net amount of interest of GBP69,000
(2022: GBPnil) was receivable by the Company during the year from
JPMorgan Chase of which GBPnil (2022: GBPnil) was outstanding at
the year end.
Full details of Directors' remuneration and shareholdings can be
found on page 47 and in note 6 on page 64 of the Company's annual
report and financial statements.
STATEMENT OF DIRECTORS' RESPONSIBILITIES
The Directors are responsible for preparing the annual report
and financial statements in accordance with applicable law and
regulations.
Company law requires the Directors to prepare 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 and
financial statements are fair, balanced and understandable, provide
the information necessary for shareholders to assess the Company's
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 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 annual and report and financial statements are published on
the www.jpmmultiassetgrowthandincome.com 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 auditors does not involve consideration of the
maintenance and integrity of this website and, accordingly, the
auditors accept no responsibility for any changes that have
occurred to the annual and report and financial statements since
they were initially presented on the website. The annual and report
and financial statements 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 and Directors'
Remuneration Report that comply with that law and those
regulations.
Each of the Directors, whose names and functions are listed on
page 35 of the Company's annual report and financial statements,
confirm 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.
The Board confirms that it is satisfied that the annual report
and 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.
For and on behalf of the Board
Sarah MacAulay
Chairman
17(th) May 2023
STATEMENT OF COMPREHENSIVE INCOME
For the year ended 28th February 2023
2023 2022
Revenue Capital Total Revenue Capital Total
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
------------------------------- -------- --------- --------- -------- -------- --------
(Losses)/gains on investments
held at fair value
through profit or loss - (412) (412) - 5,903 5,903
Net foreign currency losses - (5,757) (5,757) - (1,464) (1,464)
Income from investments 2,459 - 2,459 3,548 - 3,548
Interest receivable and
similar income 143 - 143 1 - 1
------------------------------- -------- --------- --------- -------- -------- --------
Gross return/(loss) 2,602 (6,169) (3,567) 3,549 4,439 7,988
Management fee (159) (294) (453) (187) (347) (534)
Other administrative expenses (404) - (404) (418) - (418)
------------------------------- -------- --------- --------- -------- -------- --------
Net return/(loss) before
finance costs and taxation 2,039 (6,463) (4,424) 2,944 4,092 7,036
Finance costs (4) (8) (12) (3) (5) (8)
------------------------------- -------- --------- --------- -------- -------- --------
Net return/(loss) before
taxation 2,035 (6,471) (4,436) 2,941 4,087 7,028
Taxation (charge)/credit (249) 45 (204) (291) 45 (246)
------------------------------- -------- --------- --------- -------- -------- --------
Net return/(loss) after
taxation 1,786 (6,426) (4,640) 2,650 4,132 6,782
------------------------------- -------- --------- --------- -------- -------- --------
Return/(loss) per share 2.27p (8.17)p (5.90)p 3.22p 5.02p 8.24p
------------------------------- -------- --------- --------- -------- -------- --------
STATEMENT OF CHANGES IN EQUITY
Called
up
share Share Special Capital Revenue
capital Premium reserve(1) reserves(1) reserve(1) Total
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
------------------------------- -------- --------- ----------- ------------ ----------- ---------
At 28th February 2021 931 - 84,768 1,882 681 88,262
Net return - - - 4,132 2,650 6,782
Repurchase of shares into
Treasury - - (5,992) - - (5,992)
Distributions paid in
the year - - - (43) (3,331) (3,374)
------------------------------- -------- --------- ----------- ------------ ----------- ---------
At 28th February 2022 931 - 78,776 5,971 - 85,678
Issue of shares from Treasury - 5 - 99 - 104
Repurchase of shares into
Treasury - - (2,975) - - (2,975)
Net (loss)/return - - - (6,426) 1,786 (4,640)
Distributions paid in
the year - - (1,618) - (1,786) (3,404)
------------------------------- -------- --------- ----------- ------------ ----------- ---------
At 28th February 2023 931 5 74,183 (356) - 74,763
------------------------------- -------- --------- ----------- ------------ ----------- ---------
(1) These reserves form the distributable reserve of the Company
and may be used to fund distributions to shareholders.
STATEMENT OF FINANCIAL POSITION
At 28th February 2023
2023 2022
GBP'000 GBP'000
------------------------------------------------------- --------- --------
Fixed assets
Investments held at fair value through profit or loss 71,148 83,091
------------------------------------------------------- --------- --------
Current assets
Derivative financial assets 804 676
Debtors 1,764 1,018
Cash and cash equivalents 4,690 2,515
------------------------------------------------------- --------- --------
7,258 4,209
Current liabilities
Creditors: amounts falling due within one year (1,893) (824)
Derivative financial liabilities (1,750) (798)
------------------------------------------------------- --------- --------
Net current assets 3,615 2,587
------------------------------------------------------- --------- --------
Total assets less current liabilities 74,763 85,678
------------------------------------------------------- --------- --------
Net assets 74,763 85,678
------------------------------------------------------- --------- --------
Capital and reserves
Called up share capital 931 931
Share premium account 5 -
Special reserve 74,183 78,776
Capital reserves (356) 5,971
Revenue reserve - -
------------------------------------------------------- --------- --------
Total shareholders' funds 74,763 85,678
------------------------------------------------------- --------- --------
Net asset value per share 96.7p 106.7p
------------------------------------------------------- --------- --------
STATEMENT OF CASH FLOWS
For the year ended 28th February 2023
2023 2022
GBP'000 GBP'000
---------------------------------------------------------------- --------- ---------
Net cash outflow from operations before dividends and interest (1,046) (1,174)
Dividends received 1,716 2,238
Interest received 745 882
Overseas tax recovered 40 89
Interest paid (12) (8)
---------------------------------------------------------------- --------- ---------
Net cash inflow from operating activities 1,443 2,027
---------------------------------------------------------------- --------- ---------
Purchases of investments (86,840) (58,934)
Sales of investments 101,828 63,171
Settlement of forward foreign currency contracts (2,762) 670
Settlement of future contracts (5,421) (515)
---------------------------------------------------------------- --------- ---------
Net cash inflow from investing activities 6,805 4,392
---------------------------------------------------------------- --------- ---------
Issue of shares from Treasury 104 -
Repurchase of shares into Treasury (2,832) (5,992)
Distributions paid (3,404) (3,374)
---------------------------------------------------------------- --------- ---------
Net cash outflow from financing activities (6,132) (9,366)
---------------------------------------------------------------- --------- ---------
Increase/(decrease) in cash and cash equivalents 2,116 (2,947)
---------------------------------------------------------------- --------- ---------
Cash and cash equivalents at start of year 2,515 5,459
Exchange movements 59 3
---------------------------------------------------------------- --------- ---------
Cash and cash equivalents at end of year 4,690 2,515
---------------------------------------------------------------- --------- ---------
Cash and cash equivalents consist of:
Cash and short term deposits 3,368 1,718
Cash held in JPMorgan Sterling Liquidity Fund 1,322 797
---------------------------------------------------------------- --------- ---------
Total 4,690 2,515
---------------------------------------------------------------- --------- ---------
RECONCILIATION OF NET DEBT
As at Exchange As at
28th February Cash movement 28th February
2022 flows 2023
GBP'000 GBP'000 GBP'000 GBP'000
--------------------------- -------------- -------- --------- --------------
Cash and cash equivalents
Cash 1,718 1,591 59 3,368
Cash equivalents 797 525 - 1,322
--------------------------- -------------- -------- --------- --------------
Total 2,515 2,116 59 4,690
--------------------------- -------------- -------- --------- --------------
NOTES TO THE FINANCIAL STATEMENTS
For the year ended 28th February 2023
1. Accounting policies
(a) Basis of accounting
The financial statements are prepared under historical cost
convention, modified to include fixed asset investments at fair
value, and 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 July 2022.
The financial statements have been prepared on a going concern
basis. In forming this opinion, the Directors have considered the
ongoing impact of the Covid-19 pandemic, the conflict between
Ukraine and Russia and the forthcoming continuation vote at the AGM
on 4th July 2023, on the going concern and viability of the
Company. In making their assessment, the Directors have reviewed
income and expense projections and the liquidity of the investment
portfolio, and considered the mitigation measures which key service
providers, including the Manager, have in place to maintain
operational resilience. The disclosures on long term viability and
going concern on pages 31 and 43 of the Directors' Report in the
Company's annual report and financial statements form part of these
financial statements. At the Annual General Meeting (AGM) to be
held on 4th July 2023, a continuation vote will be held whereby
shareholders will vote for or against the continuation of the
Company. A vote of 50% plus one of votes cast in favour at the AGM
is required for continuation. Since the outcome of the continuation
vote is not certain, this indicates the existence of a material
uncertainty which may cast significant doubt about the Company's
ability to continue as a going concern. The financial statements do
not include the adjustments that would result if the Company were
unable to continue as a going concern. In arriving at the decision
on the basis of preparation, the Board has considered the financial
position of the Company, its cashflow and liquidity position as
well as the uncertainty surrounding the outcome of the continuation
vote. If it were not appropriate to prepare the financial
statements on a going concern basis of accounting then adjustments
would be required to reclassify all assets as current, and a
provision for further liabilities, including liquidation costs,
would be made. In the Directors' opinion the impact of these
adjustments on the financial statements is not expected to be
significant. These financial statements have been prepared on a
going concern basis in accordance with the Disclosure Guidance and
Transparency Rules of the Financial Conduct Authority, FRS 102
issued by the FRC in September 2015, the revised Statement of
Recommended Practice "Financial Statements of Investment Trust
Companies and Venture Capital Trusts" (SORP) issued by the AIC in
November 2014 and updated in October 2019 and Companies Act
2006.
The policies applied in these financial statements are
consistent with those applied in the preceding year.
2. Distributions
(a) Dividends paid and declared
2023 2022
GBP'000 GBP'000
--------------------------------------------------------- -------- --------
Distributions paid
2022 fourth distribution of 1.025p (2021: 1.0p) 816 858
2023 first interim distribution of 1.10p (2022:1.025p) 871 855
2023 second interim distribution of 1.10p (2022:1.025p) 859 836
2023 third interim distribution of 1.10p (2022:1.025p) 858 825
--------------------------------------------------------- -------- --------
Total distribution paid in the year 3,404 3,374
--------------------------------------------------------- -------- --------
All distributions paid and declared in the year are and will be
funded from the revenue, capital and special reserves.
(b) Distributions for the purposes of Section 1158 of the
Corporation Tax Act 2010 ('Section 1158')
The revenue available for distribution by way of dividend and
interest for the year is GBP1,786,000 (2022: GBP2,650,000) and the
interim distributions for 2023 have been funded from revenue and
special reserves.
2023 2022
GBP'000 GBP'000
--------------------------------------------------------- -------- --------
2023 first interim distribution of 1.10p (2022:
1.025p) 871 855
2023 second interim distribution of 1.10p (2022:1.025p) 859 836
2023 third interim distribution of 1.10p (2022:1.025p) 858 825
2023 fourth interim distribution declared of 1.10p
(2022: 1.025p) 846 823
--------------------------------------------------------- -------- --------
3,434 3,339
--------------------------------------------------------- -------- --------
3. Return/(loss) per share
2023 2022
GBP'000 GBP'000
--------------------------------------------------- ------------ ------------
Revenue return 1,786 2,650
Capital (loss)/return (6,426) 4,132
--------------------------------------------------- ------------ ------------
Total (loss)/return (4,640) 6,782
--------------------------------------------------- ------------ ------------
Weighted average number of shares in issue during
the year 78,605,531 82,351,055
Revenue return per share 2.27p 3.22p
Capital (loss)/return per share (8.17)p 5.02p
--------------------------------------------------- ------------ ------------
Total (loss)/return per share (5.90)p 8.24p
--------------------------------------------------- ------------ ------------
4. Net asset value per share
2023 2022
--------------------------- ------------ ------------
Net assets (GBP'000) 74,763 85,678
Number of shares in issue 77,293,408 80,268,408
--------------------------- ------------ ------------
Net asset value per share 96.7p 106.7p
--------------------------- ------------ ------------
Status of results announcement
2022 Financial Information
The figures and financial information for 2022 are extracted
from the Annual Report and Accounts for the year ended 28(th)
February 2022 and do not constitute the statutory accounts for the
year. The Annual Report and Accounts include the Report of the
Independent Auditors which is unqualified and does not contain a
statement under either section 498(2) or section 498(3) of the
Companies Act 2006. The Annual Report and Accounts will be
delivered to the Register of Companies in due course.
2023 Financial Information
The figures and financial information for 2023 are extracted
from the published Annual Report and Accounts for the year ended
28(th) February 2023 and do not constitute the statutory accounts
for that year. The Annual Report and Accounts has been delivered to
the Registrar of Companies and included the Report of the
Independent Auditors which was unqualified and did not contain a
statement under either section 498(2) or section 498(3) of the
Companies Act 2006.
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.
For further information please contact:
Paul Winship
For and on behalf of
JPMorgan Funds Limited, Secretary - 020 7742 4000
18(th) May 2023
ENDS
Annual Report and Financial Statements
The Annual Report and Financial Statements will be posted to
shareholders on or around the 24 May 2023 and will shortly be
available on the Company's website
(www.jpmmultiassetgrowthandincome.com ) or in hard copy format from
the Company's Registered Office, 60 Victoria Embankment London EC4Y
0JP.
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 is also available on the Company's website at
www.jpmmultiassetgrowthandincome.com where up to date information
on the Company, including daily NAV and share prices, factsheets
and portfolio information can also be found.
This information is provided by RNS, the news service of the
London Stock Exchange. RNS is approved by the Financial Conduct
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END
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