JPMorgan Japan Smaller Companies introduces new dividend policy
In its final report for the year ending 31st March 2018, the board of JPMorgan Japan Smaller Companies (JPS) announced that, as a move to reduce the company’s discount to NAV, rather than buy back shares and to make the company more attractive to savers, it proposes to start paying dividends. This is subject to shareholder approval.
The dividend policy the company intends to make a regular quarterly dividend payment to shareholders equal to 1% of the company’s NAV. as long as there is nothing preventing it from being paid, this will happen on the last business day of the preceding financial quarter, being the end of March, June, September and December. Over the year this would approximate to 4% of the average NAV. This dividend would be paid from a combination of the revenue and capital reserves.
The investment policy will not change. The board suggests that, as the portfolio has a record of positive capital and revenue growth, 4% of NAV is not a great imposition on its performance.
Performance
The company reported a total return of the NAV of +27.8%, versus +13.2% for the benchmark TOPIX index. Over the same period, the share price total return was +26.5%. This reflected a widening of the share price discount to net asset value from 10.7% at the beginning of the financial year to 11.6% at 31st March 2018 and hence the change in dividend policy.
JPS : JPMorgan Japan Smaller Companies introduces new dividend policy