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Much better numbers from JPMorgan Multi Asset

Much better numbers from JPMorgan Multi Asset – JPMorgan Multi-Asset Growth and Income Trust (MATE) has published half-year results covering the six months ended 31 August 2021. The trust’s NAV returns were triple those of its benchmark – a return of 9.2% against its 3.0% target – and shareholders benefited from a return of 21.5% as the discount came rocketing in. The discount commenced the period under review at 12.6% but moved steadily inwards to close on 31st August 2021 at 2.5%. It was helped in this not only by the performance improvement but also by share buy-backs.

Two dividends of 1.025p each have been declared – putting the trust on track for 4.1p for the full year. The trust’s new commitment to grow the dividend at least in line with inflation looks set to be honoured.

Extract from the managers’ report

The portfolio’s developed equity exposure was the largest contributor to absolute performance. Our regional equity allocation decisions, implemented via futures, provided a small negative contribution to returns driven by our short US and Continental Europe large cap positions. Performance across fixed income markets was positive in aggregate, with high yield bonds proving the strongest performing sector.

Portfolio review

Since March, our total equity exposure has remained around 68% which was beneficial against the backdrop of rising equity markets and reflects our positive view on the intermediate term global growth outlook.

For equities, stock selection is undertaken by our in-house International Equity Group and we tilt regional positioning to reflect our latest views. We implement this via the use of index futures. This approach enables us to maintain positions in high conviction stocks whilst adjusting regional exposure to reflect our favoured markets. At the beginning of the period we reduced exposure to emerging market equities given our preference for cyclical developed markets such as Japan.

We made some changes to our fixed income exposure over the review period. While we still favour high yield over investment grade corporate bonds, we feel the potential for return is now more muted and we scaled this position back by almost 5%. We also reduced our exposure to emerging market debt. We added a new total return strategy which takes an unconstrained approach to dynamic investment across the fixed income market. We also introduced a new position in a global convertible bond fund in the first quarter, this hybrid asset class offers exposure to equity risk together with more defensive characteristics from the bond component.

Our bespoke equity portfolio continued to favour names with sustainable dividend yields trading at attractive valuations. At the end of August, the portfolio had the greatest overweight to autos, banks and industrial cyclical and positioned with an underweight to consumer staples, basic industries and utilities. During the period, the team increased their position in insurance while reducing retail exposure. The portfolio benefitted from stock selection in telecommunications and property while detractors included stock selection in insurance and utilities. On a regional basis, the team remain significantly overweight Europe and underweight Asia and the UK.”

MATE : Much better numbers from JPMorgan Multi Asset

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