Register Log-in Investor Type

News

JPMorgan Global Core Real Assets hits dividend target despite underperformance

JPMorgan Global Core Real Assets hits dividend target despite underperformance – JPMorgan Global Core Real Assets (JARA) has published its full year results for the year to 28 February 2021. During the year, the NAV fell by 5.9% while the share price total return was also down by 1%. Having only IPO’d in 2019, the trust has achieved both its first year target dividend yield of 2 to 3p per share, and is on track to hit its fully invested run rate of 4 to 6p per share, with both targets based on the initial issue price of 100p per share. 

Since the majority of JARA’s assets are US dollar denominated, reported returns have been adversely affected by sterling’s 9.5% appreciation against the US dollar over the year. While this exposure has been a negative contributor to date, JARA offers shareholders access to real assets globally and with this comes a global currency exposure. While this currency impact has moved against JARA over the past year, the board reiterates that over the long term, currency moves will represent a neutral impact for shareholder returns.

Since IPO, the trust has taken advantage of the premium to NAV at which the shares have traded over the period to issue an additional 59,833,063 shares, and over the past financial year, 8,005,065 new shares were issued pursuant to the placing programme, raising gross proceeds of £8.7m. 

Extract from the chairman’s report:

“The Company has developed significantly from when I wrote to shareholders in my last annual statement. It has hit its dividend targets and its assets have seen no material disruption or lasting impact from the COVID-19 pandemic. Given our extensive exposure to the international property and transportation sectors, our asset managers would appear to have weathered the storm with very little damage suffered. Our only real headwind has been the current strength of pound sterling relative to most foreign currencies, an issue which many regard as a ‘high quality problem’ and one which may well correct itself in the medium term.

The world around us is likely to continue to change, both as a result of the pandemic but also from technological and societal forces. The Company’s portfolio diversity should be a strength during these times as its exposure to any one sector or asset type is well dispersed. This is typified by the movement seen in the property allocations over the last year as the strength in the allocations to logistics and suburban housing – sectors positively impacted by how people’s shopping and living preferences have changed as a result of the pandemic – served to offset any weakness in the small retail exposures. It is also exciting to see how the Company is exposed to a number of global trends throughout its portfolio including: the energy transition, e-commerce acceleration and changing living preferences. One of the criteria that define real assets as being ‘core’ is the extent to which the asset acts as a fundamental building block to a well-functioning society. Thus it makes sense that, as society evolves, so will the definition of what we consider to be core real assets. The Company’s diversification, and ability to adapt to find opportunities globally, should act as an exciting strength in this time.”

JARA : JPMorgan Global Core Real Assets hits dividend target despite underperformance

Leave a Reply

Your email address will not be published. Required fields are marked *

Please review our cookie, privacy & data protection and terms and conditions policies and, if you accept, please select your place of residence and whether you are a private or professional investor.

You live in…

You are a…