JPMorgan Global Growth & Income (JGGI) 551.1p

Market cap: £2.44 billion

Investors looking for a balance of dependable income and growth should look no further than JPMorgan Income & Growth (JGGI) which is the top performer in the AIC’s (Association of Investment Companies) global equity income category over the last five and 10 years.

The objective of the fund is to provide superior total returns and outperform the MSCI All Country World index over the long term by investing in the managers’ best global ideas.

Over the last five and 10 years the fund has delivered annualised share price total returns of 16.6% and 14.9% a year respectively.

One of the key strengths and competitive advantages of the fund is the ability of co-managers James Cook, Tim Woodhouse, and Helge Skibeli to tap into JPMorgan’s global research team.

The firm’s analysts meet over 5,000 company managements a year as well as spending $150 million on fundamental research. The insights provide the fund managers with high conviction ideas.

The managers are essentially looking for the best companies wherever they are listed. The focus is on high-quality, cash-generative businesses which can ‘control their own destiny’ and not be knocked off course by the state of the economy or competitive forces.

The managers populate the portfolio with 50 to 90 of the best stocks with a good balance between growth and income which allows the fund to perform relatively well in different style regimes.

In terms of income, the team is looking for sustainability and growth potential which means they do not ‘fish’ in traditional income sectors which may provide higher yields but are more cyclical.

The trust pays quarterly distributions that are set at the beginning of each financial year, and on aggregate the intention is to pay dividends totaling at least 4% of the fund’s NAV (net asset value) at the time of announcement. This can be topped up using the trust’s capital reserves in the event of a shortfall.

The unusual feature of paying out a dividend from net assets and share buybacks has helped keep the shares trade close to NAV rather than a wide discount like many sector peers. Over the last five years the shares have traded at an average 1.8% premium. The premium is a little below that level now at 1.33%.

Top holdings include Microsoft (MSFT:NASDAQ), which represents 6.8% of the portfolio, Amazon (AMZN:NASDAQ), which makes up 6%, and Nvidia (NVDA:NASDAQ) – whose market value recently pushed through $2 trillion and represents 4.5% of the fund.

The trust has an ongoing charge of 0.5% a year.

Against so much uncertainty, from the direction of interest rates to the state of the global economy, JGGI provides investors a reassuringly diversified portfolio.

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