JPMorgan Global Core Real Assets boosted by private and liquid strategies

JPMorgan Global Core Real Assets boosted by private and liquid strategies – JPMorgan Global Core Real Assets (JARA) has posted its final results for the year to 28 February 2022. During the period its NAV increased by 12.9% while its share price return was down 8.9%, reflecting a discount to underlying NAV at which the shares were trading on at the end of February 2022.

The private strategies in the portfolio as well as the liquid strategies, all posted positive returns over the year in their local currencies – in what has been a very testing year for many asset classes across the globe. 

Since most of the company’s assets are denominated in US dollars, or in currencies which tend to be closely correlated, JARA’s returns were assisted by sterling’s 4% decline against the currency over the past year. 

Revenues and dividend

Over the course of the year, JARA grew its share capital by 4% through the issue of 8,600,000 new shares at a premium to their prevailing NAV. The board declared total dividends of 4 pence per share in respect of the company’s year ended 28 February 2022, comprising four dividends of 1 penny each.

The directors intend to maintain at least the current level of dividend and to review the level of dividend cover in the coming quarters. They have declared a first dividend for the 2022/23 financial year of 1 penny per share, which was paid to shareholders on 31 May 2022. The board believes that, over the longer term, the success of the underlying businesses into which JARA invests will facilitate a steadily growing level of dividends.

Chair’s outlook

This report covers the year from March 2021 to February 2022, JARA’s second full year of operations; the 2020/21 year was greatly affected by the onset of the global pandemic and while the year just past has seen a remarkable recovery in the world economy, it was far from plain sailing for investors. The world has largely learnt to live with COVID-19 and its many variants, resulting in an improvement in your Company’s prospects and a vindication of its investment strategies. However, shareholders will be aware that, only four days before the end of our financial year, Russia took the fateful decision to invade its neighbour Ukraine and while the resulting war will undoubtedly cause great disruption and hardship for months and possibly years to come, your Board’s assessment of the strategies into which JARA invests suggests that they are proving to be remarkably resilient. Some of these, such as the LNG carriers mentioned above, stand to benefit significantly from the switch away from Russian fossil fuels.

Meanwhile, the Company has developed significantly from when I wrote to shareholders last year. It is now fully invested, it has achieved its initial dividend targets and its assets have seen no material disruption or lasting impact from the COVID-19 pandemic. The diversification across geographies, asset classes and macro drivers means that JARA is well placed to continue to meet both its income and capital returns, even in the challenging times in which we live. Specific themes, such as the focus on energy transition, have become more relevant and the infrastructure and transport strategies are well positioned for today’s world.

With JARA’s shares once again trading at a premium, the Board and Manager will monitor the demand for the Company’s shares and assess this in the context of the long term goal of growing the Company and delivering strong returns for investors against the volatile market backdrop. In summary, therefore, following a launch which took longer and proved to be more problematic that any of us could have imagined back in September 2019, I believe that JARA offers its shareholders access to an investment framework which provides steady income with capital preservation in real terms, while being exposed to a high quality and professionally managed asset base.

JARA : JPMorgan Global Core Real Assets boosted by private and liquid strategies

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