JPMorgan European Investment Trust plc AGM

Transcription

1 JPMorgan European Investment Trust plc AGM July 2018 Alexander Fitzalan Howard, Portfolio Manager Stephen Macklow-Smith, Portfolio Manager FOR AGM USE ONLY NOT FOR FURTHER PUBLIC DISTRIBUTION

2 Income shares 1 FOR AGM USE ONLY NOT FOR FURTHER PUBLIC DISTRIBUTION

3 JPMorgan European Investment Trust Income shares Performance to 31 March 2018 Annualised excess returns versus MSCI Europe ex UK Index* 7.5% NAV Share price 5.4% 5.0% 3.4% 3.1% 4.4% 4.7% 2.5% 1.6% 0.0% 1 year 3 years (p.a.) 5 years (p.a.) Trust NAV % (net of fees) Share Price % Benchmark % Past performance is not an indication of current or future performance. Source: J.P. Morgan Asset Management. Returns as at 31 March 2018 in GBP. NAV returns are net of fees and applicable charges, debt cum par value, income reinvested, relative returns calculated geometrically. Indices do not include fees or operating expenses and are not available for actual investment. *Benchmark prior to 27 March 2013 was MSCI Europe Net Index (Total Return). 2 FOR AGM USE ONLY NOT FOR FURTHER PUBLIC DISTRIBUTION

4 JPMorgan European Investment Trust Income shares Financial year 12 month performance to 31 March / / / / /2014 Total Shareholder Return (%) NAV Return 1 (%) Benchmark 2 (%) NAV Relative Return (%) consistently good performance Past performance is not an indication of current or future performance. Source: J.P. Morgan Asset Management, as of 31 March 2018, in GBP, relative returns calculated geometrically and is calculated as a percentage based on the difference between portfolio return and benchmark return divided by the benchmark return for the period. Performance data has been calculated on NAV to NAV basis, including ongoing charges and any applicable fees, with any income reinvested, in GBP. Please note Benchmark Indices do not include fees or operating expenses and are not available for actual investment 1 NAV returns are net of fees and applicable charges, debt cum par value, income reinvested, relative returns calculated geometrically. 2 On 26/03/13 the benchmark for the Trust was changed from MSCI Europe Index to MSCI Europe ex UK Index. 3 FOR AGM USE ONLY NOT FOR FURTHER PUBLIC DISTRIBUTION

5 Performance attribution JPMorgan European Investment Trust - Income shares 12 months to 31 March 2018 Attribution summary Benchmark Stock: 2.67 Sector: 1.05 MSCI Europe ex UK Index Key industry (%) Pharma. & Biotech. (u) Food, Bev. & Tobacco (u) Insurance (o) Materials (u) Utilities (o) Key stock contributors Sanofi (u), Roche (u) Nestle (u), Anheuser-Busch InBev (u) UNIQA Insurance Group (o), ASR Nederland (o) ENCE Energia y Celulosa (o), Papeles y Cartones de Europa (o) ERG (o), Falck Renewables (o) Key stock detractors Software & Services (u) Amadeus IT Group (u), Dassault Systemes (u) Tech. Hardware & Equip. (u) Nokia (u), Neopost (o) Autos. & Components (u) Capital Goods (u) Consumer Durables (u) Stock selection Asset allocation Volkswagen (u), Fiat Chrysler Automobiles (u) Airbus (u), Astaldi (o) LVMH (u), Kering (u) Source: Factset. (o)= overweight, (u)= underweight, (n)=neutral. The fund is an actively managed portfolio, 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. 4 FOR AGM USE ONLY NOT FOR FURTHER PUBLIC DISTRIBUTION

6 JPMorgan European Investment Trust Income shares 1 year discount analysis Net Asset Value (LHS) Last Price (LHS) Fund Percent Premium (RHS) 50% 40% 30% 20% 10% 0% -10% 140 Mar 17 Apr 17 May 17 Jun 17 Jul 17 Aug 17 Sep 17 Oct 17 Nov 17 Dec 17 Jan 18 Feb 18-20% Source: Bloomberg as of 31 March Past performance is not an indication of current or future performance. 5 FOR AGM USE ONLY NOT FOR FURTHER PUBLIC DISTRIBUTION

7 Sector and country positions JPM European Investment Trust - Income Shares as of 31 May 2018 Benchmark MSCI Europe ex UK Index Active and absolute sector positions Relative to benchmark (%) Banks Insurance Real Estate Utilities Energy Household & Personal Products Consumer Durables & Apparel Pharmaceuticals Biotechnology & Life Sciences Food Beverage & Capital Goods Tobacco Portfolio weight (%) Active and absolute country positions Relative to benchmark (%) Norway Sweden Italy Finland Spain Belgium Netherlands Switzerland France Germany Portfolio weight (%) Source: Factset. The fund is an actively managed portfolio, holdings, sector weights, allocations and leverage, as applicable are subject to change at the discretion of the Investment Manager without notice. 6 FOR AGM USE ONLY NOT FOR FURTHER PUBLIC DISTRIBUTION

8 Not all traditional bond proxies are high yielding Sector correlation to 10 year US Treasury yields since 1980 Sector correlation to changes in bond yield when yields <5% vs. strategy positioning 0.5 Correlation to changes in bond Yields < 5% (LHS scale) JPM European Trust - Income active positions (RHS scale) 10% % 6% 4% 2% 0.0 0% % % -6% -8% -10% Food & Bev Health Care Real Estate Utilities Pers & H/H Gds Financial Svs Retail Telecom Travel & Leis Oil & Gas Media Chemicals Con & Mat Basic Resource Inds Gds & Svs Technology Auto & Parts Banks Insurance Source: UBS Securities LLC / J.P. Morgan Asset Management. Correlation as of December 2017, trust positioning as of 30 June FOR AGM USE ONLY NOT FOR FURTHER PUBLIC DISTRIBUTION

9 JPMorgan European Investment Trust Income Shares - portfolio Dividend profile of the underlying portfolio of stocks: As of 31 March 2018 Portfolio Benchmark* Dividend yield (historic) 4.50% 3.30% Dividend yield (forward) 4.80% 3.60% Dividend cover (earnings) 1.9x 2.2x Source: J.P. Morgan Asset Management, FactSet, as at 31 March *Benchmark is MSCI Europe ex UK Index. Indices do not include fees or operating expenses and are not available for actual investment. Past performance is not necessarily a reliable indicator for current and future performance. Dividend cover is the ratio of the company's net earnings to the total sum allotted in dividends to ordinary shareholders. Forecasts, projections and other forward looking statements are based upon current beliefs and expectations. They are for illustrative purposes only and serve as an indication of what may occur. Given the inherent uncertainties and risks associated with forecasts, projections and other forward statements, actual events, results or performance may differ materially from those reflected or contemplated. Abbreviations used: dividend yield (forward) = 12 month forward yield based on forecast dividends over next 12 months, which are not guaranteed. Dividend yield (historic) = 12 month historic yield based on trailing 12 months, dividend cover = dividend cover calculated using earnings. Yield is not guaranteed and may change over time. 8 FOR AGM USE ONLY NOT FOR FURTHER PUBLIC DISTRIBUTION

10 JPMorgan European Investment Trust Income shares Dividends Dividend on JPMorgan European Investment Trust Income shares increased to 5.80p in the 12 months to 31 March / / / / /2018 Dividend per share (p) Source: J.P. Morgan Asset Management as of 31 March Yield is not guaranteed and may change over time. 9 FOR AGM USE ONLY NOT FOR FURTHER PUBLIC DISTRIBUTION

11 Growth shares 10 FOR AGM USE ONLY NOT FOR FURTHER PUBLIC DISTRIBUTION

12 JPMorgan European Investment Trust Growth shares Performance to 31 March 2018 Annualised excess returns versus MSCI Europe ex UK Index* 6.0% NAV 5.0% 4.0% 4.3% 3.6% Share price 3.0% 2.5% 2.9% 2.9% 2.0% 1.0% 0.0% 0.2% 1 year 3 years (p.a.) 5 years (p.a.) Trust NAV % (net of fees) Share Price % (mid) Benchmark % Source: J.P. Morgan Asset Management. Returns as at 31 May 2018, in GBP. NAV returns are net of fees and applicable charges, debt cum par value, income reinvested, relative returns calculated geometrically. Benchmark indices do not include fees or operating expenses and are not available for actual investment. *Benchmark prior to 26 March 2013 was FTSE All World Developed Europe (ex UK) Index. Past performance is not an indication of current or future performance. 11 FOR AGM USE ONLY NOT FOR FURTHER PUBLIC DISTRIBUTION

13 JPMorgan European Investment Trust Growth shares Financial year 12 month performance to 31 March / / / / /2014 Total Shareholder Return (%) NAV Return 1 (%) Benchmark 2 (%) NAV Relative Return (%) Past performance is not an indication of current or future performance. Source: J.P. Morgan Asset Management, as of 31 March 2018, in GBP, relative returns calculated geometrically and is calculated as a percentage based on the difference between portfolio return and benchmark return divided by the benchmark return for the period. Performance data has been calculated on NAV to NAV basis, including ongoing charges and any applicable fees, with any income reinvested, in GBP. Please note Benchmark Indices do not include fees or operating expenses and are not available for actual investment 1 NAV returns are net of fees and applicable charges, debt cum par value, income reinvested, relative returns calculated geometrically 2 On 26/03/13 the benchmark for the Trust was changed from FTSE All World Developed Europe (ex UK) Index to MSCI Europe ex UK Index. 12 FOR AGM USE ONLY NOT FOR FURTHER PUBLIC DISTRIBUTION

14 Performance attribution JPMorgan European Investment Trust - Growth Shares 12 months to 31 March 2018 Attribution summary Benchmark Stock: 2.32 Sector: 1.62 MSCI Europe ex UK Index Key industry (%) Semiconductors (o) Diversified Financials (o) Materials (n) Transportation (o) Retailing (u) Key stock contributors BE Semiconductor Industries (o), Siltronic (o) Deutsche Bank (u), Eurazeo (o) UPM-Kymmene (o), Stora Enso (o) Deutsche Lufthansa (o), International Consolidated Airlines (o) H&M Hennes & Mauritz (u), Industria de Diseño Textil (u) Key stock detractors Food, Bev. & Tobacco (u) Pernod Ricard (u), Heineken (u) Autos. & Components (o) Schaeffler (o), Volkswagen (u) Commercial & Prof. Serv. (o) Capital Goods (u) Consumer Durables (o) Stock selection Asset allocation Adecco Group (o), Wolters Kluwer (u) Vestas Wind Systems (o), Airbus (u) JM (o), Forbo Holding (o) Source: Factset. (o)= overweight, (u)= underweight, (n)=neutral. The fund is an actively managed portfolio, 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. 13 FOR AGM USE ONLY NOT FOR FURTHER PUBLIC DISTRIBUTION

15 JPMorgan European Investment Trust Growth shares 1 year discount analysis Net Asset Value (LHS) Last Price (LHS) Fund Percent Premium (RHS) 50% 40% % 20% 10% 0% % 260 Mar 17 Apr 17 May 17 Jun 17 Jul 17 Aug 17 Sep 17 Oct 17 Nov 17 Dec 17 Jan 18 Feb 18-20% Source: Bloomberg as of 31 March Past performance is not an indication of current or future performance. 14 FOR AGM USE ONLY NOT FOR FURTHER PUBLIC DISTRIBUTION

16 Sector and country positions JPMorgan European Investment Trust - Growth Shares as of 31 May 2018 Benchmark MSCI Europe ex UK Index Active and absolute sector positions Relative to benchmark (%) Portfolio weight (%) Diversified Financials Energy Software & Services Utilities Transportation Real Estate Consumer Durables & Apparel Telecoms Services H'hold & Personal Products Health Care Equip. & Serv Active and absolute country positions Relative to benchmark (%) Portfolio weight (%) Austria Netherlands Switzerland Finland Norway Ireland Sweden Spain Germany France Source: Factset. The fund is an actively managed portfolio, holdings, sector weights, allocations and leverage, as applicable are subject to change at the discretion of the Investment Manager without notice. 15 FOR AGM USE ONLY NOT FOR FURTHER PUBLIC DISTRIBUTION

17 Market outlook 16 FOR AGM USE ONLY NOT FOR FURTHER PUBLIC DISTRIBUTION

18 Global Purchasing Managers Index (PMI) for manufacturing Eurozone Developed Emerging Global Developed Emerging Eurozone France Germany Italy Spain Greece Ireland Sweden Switzerland UK US Japan China Indonesia Korea Taiwan India Brazil Mexico Russia '18 Source: Markit, J.P. Morgan Asset Management. The Global Purchasing Managers Index (PMI) assesses the economic health of the manufacturing sector by surveying output and employment intentions. A score of 50 indicates that economic activity is neither expanding nor contracting, above 50 indicates expansion. The colours range from red to yellow to green, where red is below 50, yellow is at 50 and green is above 50. Quarterly averages are shown, except the two most recent monthly data points. Past performance is not a reliable indicator of current and future results. Guide to the Markets - UK. Data as of 30 June May Jun GTM UK Page FOR AGM USE ONLY NOT FOR FURTHER PUBLIC DISTRIBUTION

19 Global unemployment Unemployment rates % 13 Eurozone UK 11 US Japan GTM UK Page '00 '02 '04 '06 '08 '10 '12 '14 '16 '18 Source: BLS, Eurostat, Japan Ministry of Internal Affairs & Communications, ONS, Thomson Reuters Datastream, J.P. Morgan Asset Management. Past performance is not a reliable indicator of current and future results. Guide to the Markets - UK. Data as of 30 June FOR AGM USE ONLY NOT FOR FURTHER PUBLIC DISTRIBUTION

20 Global inflation Jun Jul Aug 2016 Sep Oct Nov Dec Jan Feb Mar Apr May Jun 2017 Jul Aug Sep Oct Nov Dec Jan Feb 2018 Mar Apr May GTM UK Page 7 Eurozone Developed Emerging Global Developed Emerging Eurozone France Germany Italy Spain Greece Ireland Sweden Switzerland UK US Japan China Indonesia Korea Taiwan India Brazil Mexico Russia Source: Bank of Mexico, DGBAS, ECB, FactSet, Federal Reserve, Goskomstat of Russia, IBGE, India Ministry of Statistics & Programme Implementation, Japan Ministry of Internal Affairs & Communication, Korean National Statistical Office, National Bureau of Statistics China, Riksbank, Statistics Indonesia, Swiss National Bank, UK Office for National Statistics (ONS), J.P. Morgan Asset Management. Figures are % change year on year. Heatmap colours are based on the respective central bank target inflation rates. Blue is below target, white is at target and red is above target. Past performance is not a reliable indicator of current and future results. Guide to the Markets - UK. Data as of 30 June FOR AGM USE ONLY NOT FOR FURTHER PUBLIC DISTRIBUTION

21 Global currencies Real effective exchange rates Index level rebased to 100 in 2010, broad real effective exchange rate (REER) USD GBP EUR JPY GTM UK Page '75 '77 '79 '81 '83 '85 '87 '89 '91 '93 '95 '97 '99 '01 '03 '05 '07 '09 '11 '13 '15 '17 Source: J.P. Morgan Securities Research, Thomson Reuters Datastream, J.P. Morgan Asset Management. Past performance is not a reliable indicator of current and future results. Guide to the Markets - UK. Data as of 30 June FOR AGM USE ONLY NOT FOR FURTHER PUBLIC DISTRIBUTION

22 Eurozone corporates Eurozone future capex intentions and business investment Index level, 4Q moving average (LHS); % change year on year (RHS) 60 Future capex intentions 10 GTM UK Page Business investment -60 '00 '01 '02 '03 '04 '05 '06 '07 '08 '09 '10 '11 '12 '13 '14 '15 '16 '17 '18-15 Source: Eurostat, IFO, J.P. Morgan Asset Management. Past performance is not a reliable indicator of current and future results. Guide to the Markets - UK. Data as of 30 June FOR AGM USE ONLY NOT FOR FURTHER PUBLIC DISTRIBUTION

23 Eurozone consumer Eurozone consumer confidence Index level Recession Eurozone house prices relative to income Index level 250 Spain France 200 Italy Germany 150 GTM UK Page '00 '02 '04 '06 '08 '10 '12 '14 '16 '18 0 '80 '84 '88 '92 '96 '00 '04 '08 '12 '16 Source: (Left) European Commission, Thomson Reuters Datastream, J.P. Morgan Asset Management. (Right) OECD, Thomson Reuters Datastream, J.P. Morgan Asset Management. Light grey columns indicate recession. Past performance is not a reliable indicator of current and future results. Guide to the Markets - UK. Data as of 30 June FOR AGM USE ONLY NOT FOR FURTHER PUBLIC DISTRIBUTION

24 Eurozone inflation Eurozone headline and core inflation % change year on year % change year on year Average June (flash) 5 since Headline CPI 1.7% 2.0% Core CPI 1.4% 1.0% Eurozone core goods and services inflation 3.0 Average since 2000 June (flash) 2018 Services CPI 1.9% 1.3% Core goods CPI 0.6% 0.4% GTM UK Page 25 3 Headline inflation target '00 '02 '04 '06 '08 '10 '12 '14 '16 ' '00 '02 '04 '06 '08 '10 '12 '14 '16 '18 Source: (All charts) Eurostat, Thomson Reuters Datastream, J.P. Morgan Asset Management. CPI is the Consumer Price Index. Core CPI is defined as CPI less energy, food, alcohol and tobacco. Core goods CPI is defined as goods CPI less energy, alcohol and tobacco. Past performance is not a reliable indicator of current and future results. Guide to the Markets - UK. Data as of 30 June FOR AGM USE ONLY NOT FOR FURTHER PUBLIC DISTRIBUTION

25 Eurozone debt Eurozone debt to GDP ratios Eurozone debt service ratios % of nominal GDP % of disposable income GTM UK Page Non-financial corporates 7.5 Households Non-financial corporates Government Households '00 '02 '04 '06 '08 '10 '12 '14 '16 ' '00 '02 '04 '06 '08 '10 '12 '14 '16 '18 32 Source: (All charts) Bank for International Settlements, Thomson Reuters Datastream, J.P. Morgan Asset Management. Debt refers to gross debt. Debt service ratios are a GDP-weighted average of France, Germany, Italy and Spain. For the household sector, gross disposable income is the amount of money that all of the individuals in the household sector have available for spending or saving after income distribution measures (for example, taxes, social contributions and benefits) have taken effect. For the non-financial corporate sector gross disposable income is essentially akin to gross operating surplus before dividends or interest is paid. Past performance is not a reliable indicator of current and future results. Guide to the Markets - UK. Data as of 30 June FOR AGM USE ONLY NOT FOR FURTHER PUBLIC DISTRIBUTION

26 European politics Eurozone real GDP levels Index level rebased to 100 in 1999 Survey results: Do you support the euro? % answering yes GTM UK Page Spain Eurozone Germany France Italy Nov 13 Nov 16 Nov 17 Mar '99 '01 '03 '05 '07 '09 '11 '13 '15 '17 40 Italy France Spain Germany Source: (Left) Eurostat, Thomson Reuters Datastream, J.P. Morgan Asset Management. (Right) Eurobarometer survey, J.P. Morgan Asset Management. Past performance is not a reliable indicator of current and future results. Guide to the Markets - UK. Data as of 30 June FOR AGM USE ONLY NOT FOR FURTHER PUBLIC DISTRIBUTION

27 Equities and interest rates Eurozone future capex intentions and business investment Rolling two-year correlation of weekly returns of the S&P 500, MSCI Europe Index and the 2-year US Treasury yield, 1984-present Positive relationship between yield movements and equity returns S&P 500 MSCI Europe GTM UK Page Correlation Negative relationship between yield movements and equity returns year US Treasury yield Source: MSCI, Standard & Poor s, Thomson Reuters Datastream, J.P. Morgan Asset Management. Returns are based on price index only and do not include dividends. Past performance is not a reliable indicator of current and future results. Guide to the Markets - UK. Data as of 30 June FOR AGM USE ONLY NOT FOR FURTHER PUBLIC DISTRIBUTION

28 Investment objective and specific risks JPMorgan European Investment Trust - Income shares Investment objective Aims to provide a dividend income, together with the potential for long-term capital growth from Continental European investments by outperformance of the MSCI Europe ex-uk Index. The company will predominantly invest in quoted companies with a record of paying sustainable high dividends. Currency exposure is predominantly hedged back towards the benchmark. The company has the ability to use borrowing to gear the portfolio within the range of 10% net cash to 20% geared in normal market conditions. Risk profile Exchange rate changes may cause the value of underlying overseas investments to go down as well as up. This trust may invest in non investment grade bonds which increases the capital risk and have an adverse effect on the performance of funds which invest in them. Where permitted, a trust may invest in other investment trusts that utilise gearing (borrowing) which will exaggerate market movements both up and down. For income funds/shares Dividend income is not guaranteed and will fluctuate. Investing in high yielding stocks may involve higher degree of risk as high yields are not guaranteed and will fluctuate. This fund may use derivatives for investment purposes or for efficient portfolio management. External factors may cause an entire asset class to decline in value. Prices and values of all shares or all bonds could decline at the same time. This trust may utilise gearing (borrowing) which will exaggerate market movements both up and down. This trust may also invest in smaller companies which may increase its risk profile. 27 FOR AGM USE ONLY NOT FOR FURTHER PUBLIC DISTRIBUTION

29 Investment objective and specific risks JPMorgan European Investment Trust - Growth shares Investment objective Aims to provide capital growth from Continental European investments by outperformance of the MSCI Europe ex-uk Index. The company will predominantly invest in quoted companies including, when appropriate, exposure to smaller capitalisation companies. Currency exposure is predominantly hedged back towards the benchmark. The company has the ability to use borrowing to gear the portfolio within the range of 10% net cash to 20% geared in normal market conditions. Risk profile Exchange rate changes may cause the value of underlying overseas investments to go down as well as up. This trust may invest in non investment grade bonds which increases the capital risk and have an adverse effect on the performance of funds which invest in them. Where permitted, a trust may invest in other investment trusts that utilise gearing (borrowing) which will exaggerate market movements both up and down. This fund may use derivatives for investment purposes or for efficient portfolio management. External factors may cause an entire asset class to decline in value. Prices and values of all shares or all bonds could decline at the same time. This trust may utilise gearing (borrowing) which will exaggerate market movements both up and down. This trust may also invest in smaller companies which may increase its risk profile. 28 FOR AGM USE ONLY NOT FOR FURTHER PUBLIC DISTRIBUTION

30 J.P. Morgan Asset Management Important Information This is a promotional document and as such the views contained herein are not to be taken as advice or recommendation to buy or sell any investment or interest thereto. Reliance upon information in this material is at the sole discretion of the reader. Any research in this document has been obtained and may have been acted upon by J.P. Morgan Asset Management for its own purpose. The results of such research are being made available as additional information and do not necessarily reflect the views of J.P. Morgan Asset Management. Any forecasts, figures, opinions, statements of financial market trends or investment techniques and strategies expressed are unless otherwise stated, J.P. Morgan Asset Management s own at the date of this document. They are considered to be reliable at the time of writing, may not necessarily be all-inclusive and are not guaranteed as to accuracy. They may be subject to change without reference or notification to you. It should be noted that the value of investments and the income from them may fluctuate in accordance with market conditions and taxation agreements and investors may not get back the full amount invested. Changes in exchange rates may have an adverse effect on the value, price or income of the products or underlying overseas investments. Both past performance and yield are not a reliable indicator to current and future results. There is no guarantee that any forecast made will come to pass. Furthermore, whilst it is the intention to achieve the investment objective of the investment products, there can be no assurance that those objectives will be met. J.P. Morgan Asset Management is the brand name for the asset management business of JPMorgan Chase & Co and its affiliates worldwide. You should note that if you contact J.P. Morgan Asset Management by telephone those lines may be recorded and monitored for legal, security and training purposes. You should also take note that information and data from communications with you will be collected, stored and processed by J.P. Morgan Asset Management in accordance with the EMEA Privacy Policy which can be accessed through the following website Investment is subject to documentation (Investor Disclosure Document, Key Features and Terms and Conditions), copies of which can be obtained free of charge from JPMorgan Asset Management Marketing Limited. Issued by JPMorgan Asset Management Marketing Limited which is authorized and regulated in the UK by the Financial Conduct Authority. Registered in England No: Registered address: 25 Bank St, Canary Wharf, London E14 5JP. 0903c02a8228ef53 29 FOR AGM USE ONLY NOT FOR FURTHER PUBLIC DISTRIBUTION