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JPMorgan Elect says every pool delivered in H1

JPMorgan Elect interims for the six months ended 28 February 2015 are out.

The Managed Growth pool beat its bench mark by 3.2% over the period. The pool generated a return on net assets of 9.7% while their 50:50 FTSE All-Share : FTSE All-World ex UK benchmark returned 6.5%. They declared two quarterly dividends totalling 3.9p for the period.

The report says all of the top ten holdings in the portfolio (comprising 64% of the total portfolio value) generated a positive return and eight outperformed their own benchmark as well as the benchmark of the Managed Growth portfolio. Third party holdings in the portfolio delivered mixed results, with Biotech Growth Trust and Finsbury Growth & Income delivering strong absolute and relative returns, while Artemis Alpha Trust and Schroder UK Growth underperformed.

On the Managed Income pool, the net asset return was 5% while the return on the 85% FTSE All-Share Index and 15% Barclays Global Aggregate Corporate Bond Index benchmark was 3.9%. They declared two quarterly dividends totalling 1.7p. The return on the Managed Cash pool was just 0.2% and its discount widened.

The most significant contributor to the fund’s performance relative to its benchmark over the six months continued to be their zero weighting in the low dividend yielding oil and gas major, BG Group, whose share price fell by 20% as it consistently delivered disappointing results, even before the sharp fall in the price of oil during the second half of 2014. However, since the period end, BG Group has received a takeover approach from Royal Dutch Shell and consequently its share price has bounced strongly. The Company’s long term overweight position in Provident Financial, a financial services group which continued to deliver good results and double digit dividend growth, whilst having an attractive dividend yield, was one of the most positive contributors to performance as it delivered returns of 30% over the half year. Other premium dividend yielders that performed strongly for the Company included Imperial Tobacco which has consistently delivered strong results and 10% dividend growth, and also BAE Systems, the aerospace and defence group which rose in value by 22%. Their holding in Schroders, the fund management group, also delivered strong returns, outperforming the positive market and, since the period end, this group has announced annual dividend growth of 34%.

By contrast, their holdings in the two premium dividend yielders, Interserve and Kcom, underperformed the rising equity market, with Interserve’s share price weakening in response to uncertain trading updates by some of its peers, despite delivering a resilient performance itself. Kcom’s interim results showed a slightly weaker than expected revenue outlook, although they say cost cutting should help protect the margin and dividend growth was maintained at 10%. Other detractors to relative performance included the Company’s zero holdings in some of the more expensively valued and low dividend yielding defensives such as Reckitt Benckiser and Diageo, both of which outperformed the UK equity market over this six month period.

JPE / JPEI / JPEC: JPMorgan Elect says every pool delivered in H1

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