JPMorgan Global Growth & Income, which recently switched to the Global Equity Income sector, had a great six months in H2 2016. The return on net assets, at +23.0%, was well ahead of the benchmark, the MSCI AC World Index expressed in sterling terms, which returned +15.3%. A significant narrowing of the discount meant that the total return to shareholders over the six month period was +36.8%.
The managers say that examples of companies which contributed to performance include: Outokumpu, Morgan Stanley and Suzuki Motor. Shares in Outokumpu, a global stainless steel producer listed in Finland, rallied more than 100%. The company is finally seeing all of its divisions report positive earnings, much of which is attributable to earlier restructuring and the actions of an impressive new management team. Amid a backdrop of improving industry dynamics, they say Outokumpu remains a key portfolio holding given the company’s dedication to cutting costs and managing production and the potential for strong long-term earnings growth.
Shares in Morgan Stanley rallied to levels not seen since 2008, as the company reported a surge in fixed income trading revenues and has continued to reduce costs. They think that, though it still has a way to go, the results show that the company is on track to creating higher sustainable returns. The stock features a decent dividend (2%) and net buyback yield (4%) remains strong.
Suzuki, the Japan-listed auto manufacturer, has benefited from continued strength in the company’s Indian operations where demand for vehicles remains high. Through its 56% stake in Maruti, Suzuki controls nearly half the auto market in India, which now rivals China in terms of economic growth.
JPGI : JPMorgan Global Growth & Income makes great start