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JPMorgan Multi Asset Trust will maintain dividend

JPMorgan Multi Asset Trust will maintain dividend – JPMorgan Multi Asset Trust has published results covering the year ended 29 February 2020. At that point, the trust had delivered a 5.3% return, about 0.1% less than the return on its benchmark. Shareholders had made 6.1% on their investment over the year. Since then, the NAV has fallen by 9.9%. The dividend was maintained at 4p per share and the board says it will distribute from capital if necessary to maintain this rate.

Extracts from the managers’ report

The portfolio’s equity exposure was the largest positive contributor to absolute performance, although emerging market equities were a slight negative. While our position in physical equities was beneficial overall, our regional positioning through index futures (by which means we agree to trade a specific index at a specific future price and date) provided a negative contribution to returns. Within fixed income, the contribution was broad-based with high yield bonds leading the way, but with government bonds and emerging market debt also providing positive contributions. Our allocation to infrastructure was also beneficial over the year.”

In fixed income, we reduced our allocation to high yield bonds meaningfully in the third quarter and also sold down our exposure to local currency-denominated emerging market debt in the fourth quarter amid growing concerns over the trade dispute and weak manufacturing data. We also introduced an actively-managed, diversified fixed income strategy in early 2020 which offers an attractive yield and exposure to further sectors of the fixed income market.

Our bespoke equity portfolio performed strongly and well ahead of the MSCI World High Dividend Yield index. At a sector level, the largest contributors to performance were utilities and technology – comprising both the semiconductor industry and hardware. Detractors included telecommunications and pharmaceuticals/medical technology. At a stock level, Taiwan Semiconductor Manufacturing Corp (TSMC) was the largest positive contributor. The stock performed strongly over the 12-month period despite a challenging environment for semiconductors as TSMC has a near monopoly position in leading edge foundry that should grow in step with the semiconductor industry. An overweight position in Telenor, a leading Norwegian telecommunications company with global operations, detracted from relative returns. The stock fell over the fourth quarter of 2019 as the company delivered weak quarterly results, with particularly disappointing bottom line numbers.”

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