JPMorgan Global Growth & Income plc* 2017 AGM Presentation

Transcription

1 JPMorgan Global Growth & Income plc* 2017 AGM Presentation 25 th October 2017 *Formerly JPMorgan Overseas Investment Trust plc. On Friday 8 July 2016 the Board of JPMorgan Overseas Investment Trust plc announced that it was changing its name, with immediate effect, to JPMorgan Global Growth & Income plc

2 Result Highlights Portfolio returns ending 30 June 2017 JPMorgan Global Growth & Income plc (JPGI) 12 month Performance Long Term Performance from 2017 Annual Report Return to shareholders: 51.2% Return on net assets: 29.0% JPMorgan Global Growth & Income plc - return to shareholders JPMorgan Global Growth & Income plc - return on net assets MSCI AC World Index MSCI AC World Index: 22.2% Dividend: 6.6p year performance 5 year performance 10 year performance Source: JP Morgan Global Growth & Income plc 2017 Annual Report (NAV values can be found on page 9) performance as at 30 June Share price return from Morningstar, mid market price to mid market price with dividends reinvested. Morningstar. All Rights Reserved. Net asset return based on diluted net asset value. Benchmark is MSCI AC World. Dividends are subject to approval at the Annual General Meeting. Past performance is not necessarily a reliable indicator for current and future performance. All returns are net of fees. 1

3 Performance Rolling 12 months JPMorgan Global Growth & Income plc (JPGI) returns vs. MSCI AC World at 30 September 2017, in GBP Annualised returns (%) JPGI - NAV net of fees JPGI - Share Price MSCI AC World NAV net of fees geometric excess (%) Source: J.P. Morgan Asset Management. The Trust s performance is shown based on Offer-net of fees in GBP with income reinvested. Past performance is not necessarily a reliable indicator for current and future performance. 2

4 How am I managing JPMorgan Global Growth & Income plc (JPGI)? Bottom-up stock picking conviction based approach Disciplined investment process based on 4 demanding criteria Experienced team of 70 analysts on average 18 years industry experience Flexibility to invest anywhere The above portfolio characteristics are shown for illustrative purposes only and are subject to change without notice. 3

5 A strong financial year for equity markets MSCI ACWI for 12 months ending 30 June 2017 Regions / Countries (%) ACWI US Canada Europe ex UK UK Japan Pacific ex Japan Emerging Markets Sectors (%) Top and Bottom Tech. - Semi Conduct Tech. - Hardware Banks Media Insurance Consumer Non Durable Utilities Property Telecoms Energy Source: J. P. Morgan Asset Management, Factset. (All charts) Calculated based on GBP data. Past performance is not a reliable indicator of current and future results. 4

6 Performance Attribution JPMorgan Global Growth & Income plc* for 12 months ending 30 June 2017 Sector attribution Stock Selection (%) Allocation Impact (%) (%) Banks Basic Industries Trans Svcs & Cons Cyc Industrial Cyclical Tech - Semi Conduct Media Healthcare Tech Software Tech Hardware Retail Region attribution Stock Selection (%) Allocation Impact (%) (%) North America Europe ex UK Japan United Kingdom Pacific ex Japan Emerging Markets Source: J.P. Morgan Asset Management, 30 June 2017, Local currency, Benchmark: MSCI AC World.. Data for Total Attribution shown (stock selection plus country allocation). Attribution may not match official returns due to differences in systems, rounding. Past performance is not an indication of future performance. The above portfolio characteristics are shown for illustrative purposes only and are subject to change without notice. * Formerly JPMorgan Overseas Investment Trust plc. On Friday 8 July 2016 the Board of JPMorgan Overseas Investment Trust plc announced that it was changing its name with immediate effect to JPMorgan Global Growth and Income plc. 5

7 Market environment 6

8 Growth continues: Global Purchasing Managers Index (PMI) for manufacturing Global Developed Emerging Oct Nov Dec Jan Feb Mar Apr May Jun Jul Aug Sep 51,0 51,0 50,7 50,9 50,0 50,6 50,2 50,1 50,4 51,0 50,8 51,1 52,0 52,1 52,7 52,8 53,0 53,0 52,7 52,6 52,6 52,7 53,2 53,2 52,5 52,3 52,0 52,1 50,8 50,9 50,5 50,4 51,2 51,5 51,2 51,5 52,6 53,0 53,8 54,2 54,1 53,9 54,1 54,1 53,9 54,0 54,2 54,6 49,0 49,2 49,0 49,4 48,9 50,2 49,6 49,5 49,3 50,3 50,1 50,3 51,0 50,8 51,1 50,8 51,3 51,6 50,9 50,6 50,8 50,9 51,7 51,3 Oct Nov Dec Jan Feb Mar Apr May Jun Jul Aug Sep GTM Europe Page 13 Eurozone Developed Emerging Eurozone France Germany Italy Spain Greece Ireland Sweden Switzerland UK US Australia Japan China Indonesia Korea Taiwan India Brazil Mexico Russia Lowest relative to 50 PMI 52,3 52,8 53,2 52,3 51,2 51,6 51,7 51,5 52,8 52,0 51,7 52,6 53,5 53,7 54,9 55,2 55,4 56,2 56,7 57,0 57,4 56,6 57,4 58,1 50,6 50,6 51,4 50,0 50,2 49,6 48,0 48,4 48,3 48,6 48,3 49,7 51,8 51,7 53,5 53,6 52,2 53,3 55,1 53,8 54,8 54,9 55,8 56,1 52,1 52,9 53,2 52,3 50,5 50,7 51,8 52,1 54,5 53,8 53,6 54,3 55,0 54,3 55,6 56,4 56,8 58,3 58,2 59,5 59,6 58,1 59,3 60,6 54,1 54,9 55,6 53,2 52,2 53,5 53,9 52,4 53,5 51,2 49,8 51,0 50,9 52,2 53,2 53,0 55,0 55,7 56,2 55,1 55,2 55,1 56,3 56,3 51,3 53,1 53,0 55,4 54,1 53,4 53,5 51,8 52,2 51,0 51,0 52,3 53,3 54,5 55,3 55,6 54,8 53,9 54,5 55,4 54,7 54,0 52,4 54,3 47,3 48,1 50,2 50,0 48,4 49,0 49,7 48,4 50,4 48,7 50,4 49,2 48,6 48,3 49,3 46,6 47,7 46,7 48,2 49,6 50,5 50,5 52,2 52,8 53,6 53,3 54,2 54,3 52,9 54,9 52,6 51,5 53,0 50,2 51,7 51,3 52,1 53,7 55,7 55,5 53,8 53,6 55,0 55,9 56,0 54,6 56,1 55,4 53,4 54,9 55,9 55,3 51,6 53,0 53,9 54,1 52,9 55,5 51,1 54,9 58,5 57,4 60,3 62,1 60,9 65,1 62,5 58,7 62,3 60,4 54,7 63,7 49,6 49,0 49,9 50,2 51,1 53,0 53,1 55,3 51,5 51,5 51,6 54,4 55,2 55,9 56,2 54,6 57,8 58,6 57,4 55,6 60,1 60,9 61,2 61,7 54,5 52,4 51,2 52,2 50,9 51,3 49,6 50,5 53,1 48,4 53,0 55,6 54,2 53,4 55,8 55,4 54,6 54,3 57,2 56,4 54,2 55,2 56,7 55,9 54,1 52,8 51,2 52,4 51,3 51,5 50,8 50,7 51,3 52,9 52,0 51,5 53,4 54,1 54,3 55,0 54,2 53,3 52,8 52,7 52,0 53,3 52,8 53,1 50,2 52,5 51,9 51,5 53,5 58,1 53,4 51,0 51,8 56,4 46,9 49,8 50,9 54,2 55,4 51,2 59,3 57,5 59,2 54,8 55,0 56,0 59,8 54,2 52,4 52,6 52,6 52,3 50,1 49,1 48,2 47,7 48,1 49,3 49,5 50,4 51,4 51,3 52,4 52,7 53,3 52,4 52,7 53,1 52,4 52,1 52,2 52,9 48,3 48,6 48,2 48,4 48,0 49,7 49,4 49,2 48,6 50,6 50,0 50,1 51,2 50,9 51,9 51,0 51,7 51,2 50,3 49,6 50,4 51,1 51,6 51,0 47,8 46,9 47,8 48,9 48,7 50,6 50,9 50,6 51,9 48,4 50,4 50,9 48,7 49,7 49,0 50,4 49,3 50,5 51,2 50,6 49,5 48,6 50,7 50,4 49,1 49,1 50,7 49,5 48,7 49,5 50,0 50,1 50,5 50,1 48,6 47,6 48,0 48,0 49,4 49,0 49,2 48,4 49,4 49,2 50,1 49,1 49,9 50,6 47,8 49,5 51,7 50,6 49,4 51,1 49,7 48,5 50,5 51,0 51,8 52,2 52,7 54,7 56,2 55,6 54,5 56,2 54,4 53,1 53,3 53,6 54,3 54,2 50,7 50,3 49,1 51,1 51,1 52,4 50,5 50,7 51,7 51,8 52,6 52,1 54,4 52,3 49,6 50,4 50,7 52,5 52,5 51,6 50,9 47,9 51,2 51,2 44,1 43,8 45,6 47,4 44,5 46,0 42,6 41,6 43,2 46,0 45,7 46,0 46,3 46,2 45,2 44,0 46,9 49,6 50,1 52,0 50,5 50,0 50,9 50,9 53,0 53,0 52,4 52,2 53,1 53,2 52,4 53,6 51,1 50,6 50,9 51,9 51,8 51,1 50,2 50,8 50,6 51,5 50,7 51,2 52,3 51,2 52,2 52,8 50,2 50,1 48,7 49,8 49,3 48,3 48,0 49,6 51,5 49,5 50,8 51,1 52,4 53,6 53,7 54,7 52,5 52,4 50,8 52,4 50,3 52,7 51,6 51,9 50 Highest relative to 50 PMI Source: FactSet, 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. The results are rebased such that a score of 50 means that economic conditions are neither accelerating nor deteriorating. Guide to the Markets - Europe. Data as of 30 September

9 Markets have historically peaked about six months before recessions Peak of U.S stock market and business cycle Risk of a Recession Still Looks Low Stock Market Peak Cycle Peak Lead/ lag (months) Sep 1929 Aug Mar 1937 May Jan 1945 Feb Jun 1948 Nov Jan 1953 Jul Aug 1956 Aug Aug 1959 Apr Nov 1968 Dec Jan 1973 Nov Feb 1980 Jan Nov 1980 Jul Jul 1990 Jul Mar 2000 Mar Oct 2007 Dec Average 6 Median 6 Source: (Left) Bloomberg, MKM Partners. Data as of 8/31/2017. (Right) Bloomberg, NBER, FRED, Conference Board. As of 30/06/

10 EURO Area Confidence Measures The European Commission s monthly Euro area sentiment survey showed two key measures attaining fresh, multi-year highs in September As of 5 Oct 2017 Business climate September 2017 Economic Sentiment (R.H.Scale) September 2017 (R.H.Scale) Source: Datastream, 5 October

11 US ISM surveys The long-established ISM manufacturing and non-manufacturing surveys for September were extraordinarily buoyant, reaching their highest level since May 2004 and August 2005 respectively As of 5 Oct 2017 ISM Manufacturing September 2017 ISM Non-Manufacturing September 2017 Source: Datastream, 5 October ISM = Institute for Supply Management 10

12 Philly Fed survey s CAPEX intentions The Philly Fed s monthly capex intentions survey also remains extremely robust, with the Q average the highest since early As of 5 Oct 2017 Capex intentions Q Source: Datastream, 5 October Capex = capital expenditure 11

13 Earnings revisions the pattern of recent years has changed MSCI ACWI Earnings-per-share growth estimates Source: Bank of America Merrill Lynch Global Investment Strategy, IBES, September 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. 12

14 Our analysts expect a sharply improved trend in global earnings JPMAM Global Developed Markets earnings estimates (USD billions) Last 3 years 0% growth Next 3 years 34% growth +9% $2,496 $2, % $1,953 +9% $2,027 $1,831 $1,814 $1,857 $1, E 2018E 2019E Source: J.P. Morgan Asset Management (JPMAM) Estimates as of May 15, 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. 13

15 despite undemanding JPMAM macroeconomic assumptions US Europe Japan China World Real GDP Normalized Normalized Trend US Europe Japan Short Term Rates Normalized Normalized Source: J.P. Morgan Asset Management (JPMAM), as at 8 August Opinions, estimates, forecasts, projections and statements of financial market trends that are based on current market conditions constitute our judgment and are subject to change without notice. There can be no guarantee they will be met. 14

16 Current Portfolio Positioning 15

17 Region and sector positions JPMorgan Global Growth & Income plc as of 30 September 2017 relative to MSCI AC World Sector exposures Absolute % Relative % Retail Region/country exposures Relative to benchmark (%) Portfolio weight (%) Basic Industries Europe ex UK Banks Industrial Cyclical United Kingdom Insurance Japan Utilities Media Property Pacific ex Japan Emerging Markets Technology - Software North America Technology - Hardware Source: J. P. Morgan Asset Management, 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. 16

18 UnitedHealth Group As of 30 September 2017 A healthcare insurer serving the health care needs of more customers and consumers in increasingly diverse ways Identifying the four key price drivers: Valuation Signal - Ranked 1 st quintile Significant profit growth potential - 67% current to normalised Catalysts - Strong Optum growth, membership expansion - Medicare Advantage Timeline on the cusp of change months Source: Shutterstock, 30 September The company above is shown for illustrative purposes only. Their inclusion should not be interpreted as a recommendation to buy or sell. J.P. Morgan Asset Management may or may not positions on behalf of its clients in any or all of the aforementioned securities. 17

19 ArcelorMittal As of 30 September 2017 Largest steel making entity in the world and one of the largest iron ore producers Identifying the four key price drivers: Valuation Signal - Ranked 1 st quintile Significant profit growth potential - 78% current to normalised Catalysts - Turnaround program of cost cutting and debt reduction, European consolidation, Chinese capacity cuts, higher raw material/ scrap prices Timeline on the cusp of change months Source: Shutterstock, 30 September The company above is shown for illustrative purposes only. Their inclusion should not be interpreted as a recommendation to buy or sell. J.P. Morgan Asset Management may or may not positions on behalf of its clients in any or all of the aforementioned securities. 18

20 TJX As of 30 September 2017 Leading global off-price apparel and home fashions retailer Identifying the four key price drivers: Relatively immune from the online Amazon threat given its relationships with brands who are sensitive to price disclosure Valuation Signal - Ranked 1 st quintile Significant profit growth potential - 39% current to normalised Catalysts - Store expansion, growth into new markets Timeline on the cusp of change months Source: J.P. Morgan Asset Management. Company website, 30 September The company above is shown for illustrative purposes only. Their inclusion should not be interpreted as a recommendation to buy or sell. J.P. Morgan Asset Management may or may not positions on behalf of its clients in any or all of the aforementioned securities. The use of their logos is in no way an endorsement of those companies by J.P. Morgan Asset Management nor is it intended to indicate an endorsement of J.P. Morgan Asset Management by those companies. 19

21 Renesas As of 30 September 2017 Global auto semiconductor supplier and market leader in microcontrollers Identifying the four key price drivers: Valuation Signal - Ranked 1 st quintile Significant profit growth potential - 71% current to normalised Catalysts - Growth in average semiconductor content per vehicle, high exposure to auto sector, M&A potential Timeline on the cusp of change months Source: J.P. Morgan Asset Management. Company website, 30 September The company above is shown for illustrative purposes only. Their inclusion should not be interpreted as a recommendation to buy or sell. J.P. Morgan Asset Management may or may not positions on behalf of its clients in any or all of the aforementioned securities. 20

22 How do we compare to peers? Holdings comparison between ten largest peers in Global Equity Income sector: Crowded Less Crowded British American Tobacco Roche Cisco Systems Reynolds American Diageo Novartis Taiwan Semiconductors Japan Tobacco AstraZeneca GlaxoSmithKline Held by 9 funds Held by 8 funds Microsoft Pfizer Johnson & Johnson BAE Systems Las Vegas Sands Held by 7 funds Held by 6 funds Philip Morris Royal Dutch Shell Nestle Deutsche Börse PepsiCo Held by 5 funds Held by 4 funds Source: J.P. Morgan Asset Management, Morningstar. Data is based on five year returns as of 31 December 2016 suing excess returns versus MSCI ACWI NR USD. Top ten competitors from Morningstar peer group Global Equity Income Trusts have been selected Morningstar. All Rights Reserved. The companies/securities above are shown for illustrative purposes only. Their inclusion should not be interpreted as a recommendation to buy or sell. J.P. Morgan Asset Management may or may not hold positions on behalf of its clients in any or all of the aforementioned securities. Past performance is not necessarily a reliable indicator for current and future performance. 21

23 Summary Focused approach We continue to identify many attractive companies which meet the four key criteria valuation signal, significant profit growth potential, identifiable catalyst and timeline Unrestricted approach Invest wherever four key characteristics exist Deep partnership between analysts and portfolio managers An enduring partnership built on history and respect drives idea generation The Company is delivering high conviction ideas from JPMorgan Asset Management in a focused portfolio of global equities 22

24 Appendix 23

25 Investment objective and risk profile JPMorgan Global Growth and Income plc (the Company) as at 30 September 2017 Investment Objective To provide superior capital growth and outperform the MSCI All Country World Index over the long-term by investing in companies based around the world. Key Risks Exchange rate changes may cause the value of underlying overseas investments to go down as well as up. Investments in emerging markets may involve a higher element of risk due to political and economic instability and underdeveloped markets and systems. Shares may also be traded less frequently than those on established markets. This means that there may be difficulty in both buying and selling shares and individual share prices may be subject to short-term price fluctuations. 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, or fluctuate in response to the performance of individual companies and general market conditions. 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. The share price may trade at a discount to the Net Asset Value of the company. The key risks facing the Company and the mechanisms in place to monitor and measure these risks are set out in the Company s annual report, a copy of which is available from its website, 24

26 Glossary of Terms and Definitions Portfolio return Return on net assets, net of management fees and administration expenses, but excluding both the effect of Subscription shares which have been converted during the year and the dilutive impact of Subscription shares in issue at the year end. Return to Ordinary shareholders/unit holders Total return to the Ordinary shareholder, or Unit holder, on a mid-market price to mid-market price basis, assuming that all dividends received were reinvested, without transaction costs, in the Ordinary shares of the Company at the time the shares were quoted ex-dividend. Diluted net asset value ( NAV ) per Ordinary share The NAV per Ordinary share assuming that all outstanding Subscription shares were converted into Ordinary shares at the year end. Diluted return on net assets Return on the diluted net asset value ( NAV ) per share, on a bid value to bid value basis, assuming that all dividends paid out by the Company were reinvested in the shares of the Company at the NAV per share at the time the shares were quoted ex-dividend. Diluted net asset value ( NAV ) per Ordinary share The NAV per Ordinary share assuming that all outstanding Subscription shares were converted into Ordinary shares at the year end. Diluted return on net assets Return on the diluted net asset value ( NAV ) per share, on a bid value to bid value basis, assuming that all dividends paid out by the Company were reinvested in the shares of the Company at the NAV per share at the time the shares were quoted ex-dividend. In accordance with industry practice, dividends payable which have been declared but which are unpaid at the balance sheet date are deducted from the diluted NAV per share when calculating the diluted return on net assets. Undiluted return on net assets Return on the undiluted net asset value ( NAV ) per share, on a bid value to bid value basis, assuming that all dividends paid out by the Company were reinvested in the shares of the Company at the NAV per share at the time the shares were quoted ex-dividend. In accordance with industry practice, dividends payable which have been declared but which are unpaid at the balance sheet date are deducted from the undiluted NAV per share when calculating the undiluted return on net assets. 25

27 Glossary of Terms and Definitions - continued Benchmark return Total return on the benchmark, on a mid-market value to mid-market value basis, assuming that all dividends received were reinvested in the shares of the underlying companies at the time the shares were quoted ex-dividend. The benchmark is a recognised index of stocks which should not be taken as wholly representative of the Company s investment universe. The Company s investment strategy does not follow or track this index and consequently, there may be some divergence between the Company s performance and that of the benchmark. Gearing/Net cash Gearing represents the excess amount above shareholders funds of total assets, expressed as a percentage of the shareholders funds. Total assets include total investments and net current assets/liabilities less cash/cash equivalents and excluding bank loans of less than one year. If the amount calculated is negative, this is shown as a net cash position. Ongoing charges The ongoing charges represent the Company s management fee and all other operating expenses, excluding finance costs, expressed as a percentage of the average of the daily net assets during the year. Share price discount/premium to net asset value ( NAV ) If the share price of an investment trust is lower than the NAV per share, the shares are is said to be trading at a discount. The discount is shown as a percentage of the NAV. The opposite of a discount is a premium. It is more common for an investment trust s shares to trade at a discount than at a premium. Performance attribution Analysis of how the Company achieved its recorded performance relative to its benchmark. 26

28 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 of 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. e027ae10-b4fa-11e7-99dc c63 27