jpmorgan european inves tment trust plc agm

JPMorgan European Investment Trust plc AGMJuly 2020

Alexander Fitzalan HowardPortfolio Manager

Stephen Macklow-SmithPortfolio Manager

1 FOR AGM USE ONLY | NOT FOR FURTHER PUBLIC DISTRIBUTION

Market outlook

2

42,4 47,8

39,5 46,4

45,4 49,6

39,4 47,4

40,6 52,3

36,6 45,2

45,4 47,5

38,3 49,0

41,1 49,4

39,2 51,0

40,0 47,3

42,1 41,9

40,7 50,1

39,8 49,8

38,4 40,1

50,7 51,2

28,6 39,1

41,3 43,4

41,9 46,2

30,8 47,2

38,3 51,6

38,3 38,6

36,2 49,4

2011 2012 2014 20162008 2009 2010'20

2013 20192015 2017 2018 '20

India

Indonesia

Greece

Germany

China

USUK

EurozoneFrance

ItalySpain

Ireland

Japan

Korea

Global

Developed

Emerging

Taiwan

MexicoBrazil

Russia

SwitzerlandSweden

Euro

zone

Dev

elop

edEm

ergi

ngGlobal Purchasing Managers’ Index (PMI) for manufacturing

Source: Markit, J.P. Morgan Asset Management. The Global Purchasing Managers’ Index (PMI) for manufacturing assesses the economic health of the sector by surveying manufacturing businesses regarding output, new orders, stocks of purchases, supplier delivery times and employment. A score of 50 indicates that economic activity is neither expanding nor contracting, above 50 indicates expansion. The colours range from red to yellow to green, where red is below 50, yellow is at 50 and green is above 50. Quarterly averages are shown, except the two most recent monthly data points. Past performance is not a reliable indicator of current and future results. Guide to the Markets - Europe. Data as of 30 June 2020.

GTM – Europe |

Glob

al ec

onom

y

5

May Jun


Growth shares


Source: J.P. Morgan Asset Management. Geometric excess returns. Performance data has been calculated on NAV to NAV basis, including ongoing charges and any applicable fees, with any income reinvested, in GBP. JETG is the JPMorgan European Investment Trust – Growth shares. Financial year is 1 April to 30 March the next calendar year. Past performance is not a reliable indicator for current or future results.

Annualised performance, net of fees (%)

Financial year performance, net of fees (%)

Three months Six months One year

Three years

Five years

Tenyears

JETG NAV (cum income, debt at par value) -20.7 -19.5 -13.3 -3.1 2.5 5.6

JETG share price -25.4 -22.6 -16.3 -6.4 -1.0 4.8

MSCI Europe ex UK (NET) -17.5 -16.7 -8.3 -1.2 3.1 4.8

Excess return (NAV) -3.9 -3.4 -5.5 -1.9 -0.5 +0.8

2013 - 2014 2014 - 2015 2015 - 2016 2016 - 2017 2017 - 2018 2018 - 2019 2019 - 2020

JETG NAV (cum income, debt at par value) 23.1 7.9 -1.6 26.6 7.2 -2.3 -13.3

JETG share price 24.1 14.5 -8.8 27.1 7.6 -7.9 -16.3

MSCI Europe ex UK (NET) 17.0 7.0 -5.3 27.2 3.0 2.2 -8.3

Excess return (NAV) +5.2 +0.8 +3.9 -0.5 +4.1 +4.4 -5.5

JPMorgan European Investment Trust – Growth sharesPerformance to 31 March 2020


Performance attribution

Source: Factset. (o) = overweight, (u) = underweight, (n) = neutral. Data is gross of fees in GBP. Attribution results are for indicative purposes only. The portfolio is actively managed. Holdings, sector weights, allocations and leverage, as applicable, are subject to change at the discretion of the Investment Manager without notice. Past performance is not a reliable indicator of current and future results.

JPM European Investment Trust - Growth Sharesfor 1 year ending 31 March 2020

Top contributors Relative weight (%)

Stock return (%)

Impact (%)

Roche Holding 1.30 26.17 0.46

Anheuser-Busch InBev -1.12 -50.99 0.43

TeamViewer 0.33 43.79 0.35

Daimler -0.83 -48.10 0.31

Banco Santander -0.97 -42.49 0.30

Top detractors Relative weight (%)

Stock return (%)

Impact (%)

Actividades de Construccion y Servicios 1.13 -51.05 -0.66

OMV 1.03 -45.05 -0.49

Safran -0.04 -31.98 -0.41

Peugeot 1.21 -41.17 -0.37

Iberdrola -1.07 27.93 -0.30

Attribution summary Stock: -4.08Sector: -1.59

Benchmark MSCI Europe ex UK (total return) (£)

Sector attribution (%)

0.41

0.34

0.12

0.08

0.06

-0.40

-0.42

-0.46

-0.81

-2.26

-3 -2 -1 0 1 2 3

Food, Bev. & Tobacco (u)

Banks (u)

Pharma. & Biotech. (u)

Software & Services (o)

Consumer Services (n)

Transportation (n)

Consumer Durables (u)

Retailing (u)

Materials (u)

Capital Goods (o)

Stock selection Asset allocation


Strength of our approach

We believe that persistent market anomalies are best captured through combining disciplined quantitative and rigorous fundamental analysis

Quantitative research Fundamental analysis

Depth of analysis

Forward looking and context aware

Dealing with poor and unstructured data

Breadth of analysis

Objective and unemotional

Rigorous and repeatable

Stockselection

Portfolioconstruction

Portfolioimplementation


What do we look for in a company?For every stock we ask 3 questions:

Is it a good business?We consider the quality of the company through its profitability, sustainability of earnings and capital allocation discipline

Is it attractively valued?We look at a company’s valuation to assess if its future prospects have been incorrectly estimated by the market

Is the outlook improving?Assessing the operational momentum of the business and how is this being reflected in expectations

Three complementary considerations that help predict stock returns


Stock example: Roche

Source: ROIC= Return on Invested Capital, Factset, JP Morgan Asset Management. Fwd 12m P/E Ratio= Blended forward 12 month price to earnings ratio on Bloomberg EPS consensus. Healthcare=SXDP index, Stoxx Europe 600 Health Care Price index. Share price: Bloomberg. Fwd 12m EPS Est= Blended forward 12 month Bloomberg EPS consensus. The securities above are shown forillustrative purposes only. Their inclusion should not be interpreted as a recommendation to buy or sell. Opinions, estimates, forecasts, and statements of financial market trends that are based oncurrent market conditions constitute our judgment and are subject to change without notice.

Past performance is not a reliable indicator of current and future results.

Is it attractively valued?

Investment case

16.0

16.5

17.0

17.5

18.0

200210220230240250260270

Jan 18 Mar 18 May 18 Jul 18 Sep 18 Nov 18

Share Price - CHF (LHS)

Fwd 12m EPS Est - CHF (RHS) Cost-cutting programmes boosting returns on capital, while solid

pipeline supports future prospects.

Attractive valuation gap to peers in the pharmaceuticals space.

Strong operational performance from new drugs leading to positive earnings revisions.

It looks attractive on Environment and Governance, while further monitoring of Social factors affecting the company is needed.

121314151617181920

Jan-14 Aug-14 Mar-15 Oct-15 May-16 Dec-16 Jul-17 Feb-18 Sep-18

Roche Fwd 12m P/E Ratio

Healthcare Fwd 12m P/E Ratio22.7%

8.9%

0%

5%

10%

15%

20%

25%

Roche Swiss median

Is the outlook improving?

Is it a good business?

ROIC (%)


Market Review

Source J.P.Morgan Asset Management. Opinions, estimates, forecasts, projections and statements of financial market trends are based on market conditions at the date of the publication, constitute our judgment and are subject to change without notice. As at 30 June 2020.

• The market looked fairly set for a late cycle expansion and we were positioned accordingly

• Then the coronavirus hit and we were faced with a global pandemic on a scale not seen in 100 years

• Markets retreated very fast – the European index dropped 35% in 16 trading days

• Authorities reacted commendably fast – support from government budgets and from central banks will mitigate the worst of the damage….

• … but economic activity has dropped dramatically and the full impact is not yet clear


Our investment process performance - satisfactory in the long term, poor in the short term

Source: J.P. Morgan Asset Management. The style factors are as follows: V=Cheap; Q=High quality; M=Strong momentum; EM=Strong positive earnings momentum; PMI=Blended price and industry momentum; T3Q=Strong momentum and high quality; VQM=Blended value, quality and momentum; DY=High dividend yield.

Past performance is not a reliable indicator of current and future results

Distribution of rolling 12m style factor returns : 31 December 1995 – 29 May 2020

-40

-20

0

20

40

60

80

100

V Q EM PMI M T3Q VQM DY

12m

per

form

ance

(%)

5th - 95th Percentile 25th - 75th Percentile 6 months ago - 29/11/2019 Current - 29/05/2020


As a result, cheap stocks are trading at as wide a discount as we have seen in 30 years or longer

Source: J.P. Morgan Asset Management.

Relative valuation spreads of value: Europe Broad Market

0.0

0.5

1.0

1.5

1995

1996

1997

1998

1999

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

2014

2015

2016

2017

2018

2019

2020

Rela

tive

valu

atio

n sp

read

IndGrp neutral valuation spread of Value on forward earnings yield: 31/12/1994 - 29/05/2020

5th percentile Median 95th percentile

-0.20.00.20.40.60.81.01.21.4

1995

1996

1997

1998

1999

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

2014

2015

2016

2017

2018

2019

2020Re

lativ

e va

luat

ion

spre

ad

IndGrp neutral valuation spread of Value on book yield: 31/12/1994 - 29/05/2020

5th percentile Median 95th Percentile

0.0

0.5

1.0

1.5

2.0

1995

1996

1997

1998

1999

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

2014

2015

2016

2017

2018

2019

2020

Rela

tive

valu

atio

n sp

read

Valuation spread of Value on forward earnings yield: 31/12/1994 - 29/05/2020

5th percentile Median 95th percentile

0.0

0.5

1.0

1.5

2.0

1995

1996

1997

1998

1999

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

2014

2015

2016

2017

2018

2019

2020

Rela

tive

valu

atio

n sp

read

Valuation spread of Value on book yield: 31/12/1994 -29/05/2020

5th percentile Median 95th Percentile


Share price discount

Source: Bloomberg. Data from 31 May 2016 to the 31 May 2020. Past performance is not a reliable indicator for current or future results.

JPM European Investment Trust - Growth SharesNet Asset Value (NAV) vs. Share Price (pence)

Premium/Discount to NAV (%)

200

250

300

350

400

May-16 Nov-16 May-17 Nov-17 May-18 Nov-18 May-19 Nov-19 May-20

Net Asset Value

Last Price

-25%-20%-15%-10%

-5%0%

May '16 Nov '16 May '17 Nov '17 May '18 Nov '18 May '19 Nov '19 May '20

pence


Sector and country positions

Source: J.P. Morgan Asset Management, Factset. The investment trust is actively managed. Holdings, sector weights, allocations and leverage, as applicable, are subject to change at the discretion of the Investment Manager without notice.

JPM European Investment Trust - Growth Sharesas of 31 May 2020

Relative to benchmark (%)


4.1 1.6 1.5 1.4 1.1

-1.6 -1.7 -1.9 -2.1 -2.2-10.0-5.00.05.0

10.0

Diversified Financials Semiconductors &Semiconductor

Equipment

Commercial &Professional

Services

Software & Services Utilities Transportation Capital Goods Consumer Durables& Apparel

Health CareEquipment &

Services

Materials

Portfolio Weight (%) 7.5 4.6 2.8 5.6 6.4 0.1 9.3 3.6 0.9 4.5

Active and absolute sector positions


2.2 1.8 1.3 0.2 0.1

-1.2 -1.3 -1.4-2.7 -3.1-5.0

0.0

5.0

Austria Norway Netherlands Italy Switzerland Germany Ireland Denmark Sweden Spain

Active and absolute country positions



Income shares


What do we look for in a high dividend yielding company?

Is it high yielding?We aim to invest in the highest yielding stocks, whilst avoiding yield traps, by rigorously assessing the ongoing affordability of companies’ dividend distribution policies

Is it a good business?We consider the quality of the company through the sustainability of its dividend

Is the outlook improving?Assessing the operational momentum of the business and how is this being reflected in expectations

Stage 1:

Stage 2:

Objective: To maximise our exposure to high dividend yield companies that are fundamentally sound

The objective is the investment manager’s internal guidelines only to achieve the investment trust’s investment objectives and policies as explained in the Annual Report.


Michelin – cheap stock which is now beating expectations

Is it attractively valued?

Trades at a forecast dividend yield of c. 4% with a FCF yield of c. 6%

Profitability forecast to improve and company has very low debt levels

Company benefits from their exposure to the less cyclical replacement tyre market and the higher margin premium tyre market

Investment caseIs it a good company?

Is the outlook improving?

Company is less geared into the automobile sector’s macro headwinds than others

Source: J.P. Morgan Asset Management. Top Left Chart: Bloomberg data from 1 June 2017 to 30 May 2019. Bottom left chart: Goldman Sachs. Top right chart: Bloomberg data from 1 Nov 2018 to 30May 2019. The EPS is the consensus EPS estimate which is an arithmetic average of selected broker estimates for earnings per share of the company for the year shown. The securities above areshown for illustrative purposes only. Their inclusion should not be interpreted as a recommendation to buy or sell. Opinions, estimates, forecasts, and statements of financial market trends that arebased on current market conditions constitute our judgment and are subject to change without notice.

10.6

10.8

11

11.2

11.4

11.6

Nov-18 Dec-18 Jan-19 Feb-19 Mar-19 Apr-19 May-19

Consensus EPS est FY19

0.0

0.2

0.4

0.6

0.8

1.0

0%

5%

10%

15%

2016 2017 2018 2019E 2020E 2021E 2022E

ROCE Net debt/EBITDA

2.0

2.5

3.0

3.5

4.0

4.5

Jun-17 Sep-17 Dec-17 Mar-18 Jun-18 Sep-18 Dec-18 Mar-19

Fwd 12 month div yield


Daimler – High yielding stock which we view as a yield trap

Is it high yielding?

Investment caseAvoiding unsustainably high dividends

Avoiding companies with the weakest outlook

Company has struggled to combat the pressures brought about by trade wars

Source: J.P. Morgan Asset Management. Top Left Chart: Bloomberg data from 1 January 2017 to 31 March 2020. Bottom left chart: Deutsche Bank Research, September 2019. Top right chart:Bloomberg data from 1 January 2017 to 31 March 2020. The EPS is the consensus EPS estimate which is an arithmetic average of selected broker estimates for earnings per share of the company forthe current financial year. The securities above are shown for illustrative purposes only. Their inclusion should not be interpreted as a recommendation to buy or sell. Opinions, estimates, forecasts, andstatements of financial market trends that are based on current market conditions constitute our judgment and are subject to change without notice.

Trades with a dividend yield of 4.1% (12 months forward)

Company has delivered numerous profit warnings in the last two years due primarily to increased Chinese import tariffs impacting negatively on demand

This has resulted in cashflow from the industrial business being lower than the dividend for two consecutive years

0

1,000

2,000

3,000

4,000

5,000

6,000

2011 2012 2013 2014 2015 2016 2017 2018

Total dividendFCF industrial

(EUR)

0.0

5.0

10.0

15.0

20.0

Jan-17 Jul-17 Jan-18 Jul-18 Jan-19 Jul-19 Jan-20

12 month historic dividend yield (%)

2.0

4.0

6.0

8.0

10.0

Jan-17 Jul-17 Jan-18 Jul-18 Jan-19 Jul-19 Jan-20

Bloomberg consensus EPS estimate FY200 (EUR)


JPMorgan European Investment Trust – Income sharesPerformance to 31 March 2020

-17.14%

-5.34%-2.25%

0.35%

-21.00%

-8.10%-5.20%

-0.31%

-24.0%

-20.0%

-16.0%

-12.0%

-8.0%

-4.0%

0.0%

4.0%

8.0%

1 year 3 years (p.a.) 5 years (p.a.) 10 years (p.a.)

NAV

Share price

Trust NAV % (net of fees) -24.00 -6.46 0.75 5.63

Share price % (mid) -27.54 -9.19 -2.29 4.93

Benchmark % -8.28 -1.18 3.07 5.26

Source: J.P. Morgan Asset Management. Returns in GBP. NAV returns are net of fees and applicable charges, debt cum par value, income reinvested, relative returns calculated geometrically. Benchmark indices do not include fees or operating expenses and are not available for actual investment. *Benchmark prior to 27 March 2013 was MSCI Europe Net Index (Total Return). Past performance is not an indication of current or future results.

Annualised excess returns versus MSCI Europe ex UK Index*


Source: J.P. Morgan Asset Management. Geometric excess returns. Performance data has been calculated on NAV to NAV basis, including ongoing charges and any applicable fees, with any income reinvested, in GBP. JETI is the JPMorgan European Investment Trust – Income shares. *Benchmark prior to 27 March 2013 was MSCI Europe Net Index (Total Return). Financial year is 1 April to 30 March the next calendar year.

Past performance is not a reliable indicator for current or future results.

Annualised performance, net of fees (%)

Financial year performance, net of fees (%)

Three months Six months One year

Three years

Five years

Tenyears

JETI NAV (cum income, debt at par value) -30.2 -29.3 -24.0 -6.5 0.7 5.6

JETI share price -33.6 -31.3 -27.5 -9.2 -2.3 4.9

MSCI Europe ex UK (NET) -17.5 -16.7 -8.3 -1.2 3.1 5.3

Excess return (NAV) -15.4 -15.0 -17.0 -5.3 -2.3 +0.3

2013 - 2014 2014 - 2015 2015 - 2016 2016 - 2017 2017 - 2018 2018 - 2019 2019 - 2020

JETI NAV (cum income, debt at par value) 26.8 10.7 -1.1 28.2 6.5 1.4 -24.0

JETI share price 28.8 15.4 -3.5 23.2 8.8 -4.7 -27.5

MSCI Europe ex UK (NET) 17.0 7.0 -5.3 27.2 3.0 2.2 -8.3

Excess return (NAV) +8.4 +3.4 +4.4 +0.8 +3.5 -0.7 -17.0

JPMorgan European Investment Trust – Income sharesPerformance to 31 March 2020


The highest dividend yielders have fared the worst in 2020

Source: FactSet, J.P. Morgan Asset Management. Data as of 31 May 2020. All calculations are cumulative total return, including dividends reinvested for the stated period. Dividend yield is the annual dividend as a % of the price at 1 January 2020.

Past performance is not a reliable indicator for current and future performance.

YTD 2020 performance in EUR

MSCI Europe Dividend yield

Index weight (%)

Return (%)

>4% 24.6 -25.3

2 – 4% 39.0 -11.9

0 – 2% 23.5 -13.4

0% 12.8 -14.2

Total 100.0 -15.1

MSCI Europe Small Cap Dividend yield

Index weight (%)

Return (%)

>4% 21.8 -22.4

2 – 4% 31.9 -19.1

0 – 2% 29.4 -14.3

0% 17.0 -15.3

Total 100.0 -16.5


Performance attribution

Source: Factset. (o) = overweight, (u) = underweight, (n) = neutral. Data is gross of fees in GBP. Attribution results are for indicative purposes only. The portfolio is actively managed. Holdings, sector weights, allocations and leverage, as applicable, are subject to change at the discretion of the Investment Manager without notice. Past performance is not a reliable indicator of current and future results.

JPM European Investment Trust - Income Sharesfor 1 year ending 31 March 2020

Top contributors Relative weight (%)

Stock return (%)

Impact (%)

Airbus Not Held -47.70 0.47

Total -1.03 30.58 0.41

Anheuser-Busch InBev Not Held -43.46 0.33

Unibail-Rodamco-Westfield Not Held -60.52 0.18

Banco Santander -0.97 -34.19 0.17

Top detractors Relative weight (%)

Stock return (%)

Impact (%)

Nestle -4.78 0.70 -1.39

Roche Holding -0.60 26.17 -0.76

ASML Holding Not Held 50.90 -0.71

Novo Nordisk -1.39 -6.43 -0.57

LVMH Moet Hennessy Louis Vuitton Not Held 7.26 -0.24

Attribution summary Stock: -4.26Sector: -5.43


Sector attribution (%)

0.39

0.02

-0.78

-0.83

-1.08

-1.59

-1.70

-3 -2 -1 0 1 2 3

Utilities (o)

Telecom. Services (o)

Insurance (o)

Materials (u)

Food, Bev. & Tobacco (u)

Banks (o)

Pharma. & Biotech. (u)

Stock selection Asset allocation


Share price discount

Source: Bloomberg. Data from 31 May 2016 to the 31 May 2020. Past performance is not a reliable indicator for current or future results.

JPM European Investment Trust - Income SharesNet Asset Value (NAV) vs. Share Price (pence)

Premium/Discount to NAV (%)

100

150

200

May-16 Nov-16 May-17 Nov-17 May-18 Nov-18 May-19 Nov-19 May-20

Net Asset Value

Last Price

pence

-30%

-20%

-10%

0%

May '16 Nov '16 May '17 Nov '17 May '18 Nov '18 May '19 Nov '19 May '20


Sector and country positions

Source: J.P. Morgan Asset Management, Factset. The investment trust is actively managed. Holdings, sector weights, allocations and leverage, as applicable, are subject to change at the discretion of the Investment Manager without notice.

JPM European Investment Trust - Income Sharesas of 31 May 2020



6.6 5.0 3.6 3.6 1.9

-2.4 -2.7 -2.8 -4.0 -4.5-10.0-5.00.05.0

10.0

Utilities Insurance Banks Telecom.Services

RealEstate

PharmaceuticalsBiotechnology & Life

Sciences

Health CareEquipment &

Services

Semiconductors &Semiconductor

Equipment

Software & Services Consumer Durables& Apparel


Active and absolute sector positions


4.6 3.8 3.3 2.4 1.5

-1.8 -2.6 -3.2 -3.7 -3.9-10.0-5.00.05.0

10.0

Italy Finland Norway Austria Spain Switzerland Germany Netherlands Denmark France

Active and absolute country positions



The outlook for European dividends in 2020 is unclear

Affordability

Regulatory impact

Reputational risk

A chance to rebase

Scrips and buybacks


Portfolio income characteristics

Source: J.P. Morgan Asset Management, FactSet, as at 31 May 2020. Benchmark is MSCI Europe ex UK Index. Indices do not include fees or operating expenses and are not available for actual investment. Dividend distribution is as declared by the Company’s board of directors in accordance with the Company’s dividend policy. Dividend cover is the ratio of the company's net earnings to the total sum allotted in dividends to ordinary shareholders. Abbreviations used: dividend yield (forward) = 12 month forward yield based on forecast dividends over next 12 months, which are not guaranteed. Dividend yield (historic) = 12 month historic yield based on trailing 12 months, dividend cover = dividend cover calculated using earnings.

Yield is not guaranteed and may change over time.

JPM European Investment Trust - Income Shares as of 31 May 2020

Portfolio Investment Trust Index

Dividend yield (historic) 4.1% 2.8%

Dividend yield (forward) 4.9% 3.2%

Dividend cover (earnings) 2.1x 2.2x

• Reserves

• Dividend profile of the underlying portfolio

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http://tesseract.uk/news/washtec/attachment/washtec-logo/


JPMorgan European Investment Trust – Income shares

4.00 4.00 4.20 4.254.75 4.75 4.75

5.00

5.806.25

6.70

0

1

2

3

4

5

6

7

8

2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020

Total Dividend (pence per share)+5.3% p.a. +9.0% p.a.

Annual dividend per share

9% dividend increase per annum over the last 4 years

Source: J.P. Morgan Asset Management, as at 31 March 2020. Dividend growth is calculated as the compounded annual growth rate of dividends paid by JPMorgan European Investment Trust –Income share over the period shown (2010-2019). Past performance is not a reliable indicator of current and future results. Dividend declaration and payment is notguaranteed and subject to the dividend policy.


European equities – no better place for income

Source: UBS European Equity Strategy. As of 31 March 2020. All equity dividend yields based on MSCI regional indices. DY denotes dividend yield, BY denotes bond yield.

European equities are the highest yielding vs competing asset classes

4.2

2.2

3.42.9 2.9

1.30.8

-0.4

-2.0

0.30.8

0.0

-0.3

0.2

(3)

(2)

(1)

0

1

2

3

4

5

6

7

8

9

Eur

opea

n D

Y

US

DY

EM

DY

AC

Wor

ld D

Y

Japa

n D

Y

A €

corp

B

Y

AA

€co

rp

BY

Ger

man

10y

Bun

d

Ger

man

Rea

l BY

UK

10y

r BY

US

10y

r BY

Japa

n 10

yr B

Y

Ger

man

3m

FIB

OR

US

3m

rate

s

Current (%) 30 yr average (%)

Equities Government BondsCorp Bonds Money MarketsYield (%)


Challenged periods for income/value have often presented opportunitiesAnnualised returns (%)

Value Dividend yield

1998 -8.2 -20.6

1999 -8.6 -15.6

2000 34.1 33.7

2001 69.0 67.9

2002 71.4 68.4

2003 2.6 2.2

2004 18.5 14.1

2005 4.0 -5.7

2006 3.0 -1.8

2007 -5.8 -7.4

2008 -10.8 -0.4

2009 32.6 0.1

2010 4.6 -1.2

2011 0.1 10.3

2012 17.2 1.6

2013 11.1 -3.7

2014 6.5 11.5

2015 -2.1 -3.0

2016 8.7 6.9

2017 -1.4 -2.6

2018 -7.8 0.8

2019 -8.0 -6.4

2020 to date* -27.1 -21.1

Source: J.P. Morgan Asset Management *as at 11 May 2020. Factor performance is the equally weighted interquintile return in euros, rebalanced monthly. We have not included trading costs assumptions in this analysis. The universe is the largest three size quintiles of the S&P European Broad Market Index. Past performance is not a reliable indicator of current and future results.**Post-dot com bubble returns are backtested returns. Back-tested result is a simulated past performance that is not a reliable indicator of current and future results.

0.00.20.40.60.81.01.21.41.61.8

1995

1996

1997

1998

1999

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

2014

2015

2016

2017

2018

2019

2020R

elat

ive

valu

atio

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read

Valuation spread of Value on forward earnings yield: 31/12/1994 - 11/05/2020

0.00.20.40.60.81.01.21.41.61.8

1995

1996

1997

1998

1999

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

2014

2015

2016

2017

2018

2019

2020

Rel

ativ

e va

luat

ion

spre

adValuation spread of Dividend Yield on forward

earnings yield: 31/12/1994 - 11/05/2020

Representative fundperformance, gross of fees

Year(s) Excess returns

Post-dot combubble

2000, 2001, 2002

15.6%**, 21.7%**, 24.5%**

Post-Great Financial Crisis

2009

2010-15 cumulative

+8.1%

+21.1%

Post-Covid-19 crisis

April2019

onwards?

Simulated past performance is not a reliable indicator of current and future results.


Appendix


Investment objective and risk profile JPMorgan European Investment Trust - Income shares (the Company)

Investment objectiveAims to provide a growing income together with the potential for long-term capital growth by investing in a portfolio of investments that is diversified amongst countries, sectors and market capitalisation within the universe of Continental European investments. The Company will predominantly invest in quoted companies with a record of paying sustainable high dividends. Currency exposure is predominantly hedged back towards the benchmark. The Company has the ability to use borrowing to gear the portfolio within the range of 10% net cash to 20% geared in normal market conditions.

Key Risks

Exchange rate changes may cause the value of underlying overseas investments to go down as well as up.

This Company may invest in non investment grade bonds which increases the capital risk and have an adverse effect on the performance of companies which invest in them.

This Company may use derivatives for investment purposes or for efficient portfolio management.

External factors may cause an entire asset class to decline in value. Prices and values of all shares or all bonds could decline at the same time, or fluctuate in response to the performance of individual companies and general market conditions.

This Company may utilise gearing (borrowing) which will exaggerate market movements both up and down.

This Company may also invest in smaller companies which may increase its risk profile.

The share price may trade at a discount to the Net Asset Value of the Company.

As the portfolio is primarily focused on generating income, it may bear little resemblance to the composition of its benchmark

The key risks facing the Company and the mechanisms in place to monitor and measure these risks are set out in the Company’s annual report, a copy of which is available from its website, www.jpmeuropean.co.uk.

Please refer to the Investor Disclosure Document, latest annual report, and Key Information Document (KID) for more information relating to the Company.

http://www.jpmeuropean.co.uk/


Investment objective and risk profile JPMorgan European Investment Trust - Growth shares (the Company)

Investment objectiveAims to provide capital growth and a rising share price over the longer term from Continental European investments by taking carefully controlled risks through an investment method that is clearly communicated to shareholders. Currency exposure is predominantly hedged back towards the benchmark. The Company has the ability to use borrowing to gear the portfolio within the range of 10% net cash to 20% geared in normal market conditions.

Key Risks

Exchange rate changes may cause the value of underlying overseas investments to go down as well as up.

This Company may invest in non investment grade bonds which increases the capital risk and have an adverse effect on the performance of companies which invest in them.

Where permitted, a Company may invest in other investment funds that utilise gearing (borrowing) which will exaggerate market movements both up and down.

This Company may use derivatives for investment purposes or for efficient portfolio management.

External factors may cause an entire asset class to decline in value. Prices and values of all shares or all bonds could decline at the same time, or fluctuate in response to the performance of individual companies and general market conditions.

This Company may utilise gearing (borrowing) which will exaggerate market movements both up and down.

This Company may also invest in smaller companies which may increase its risk profile.

The share price may trade at a discount to the Net Asset Value of the Company.

The key risks facing the Company and the mechanisms in place to monitor and measure these risks are set out in the Company’s annual report, a copy of which is available from its website, www.jpmeuropean.co.uk

.Please refer to the Investor Disclosure Document, latest annual report, and Key Information Document (KID) for more information relating to the Company.

http://www.jpmeuropean.co.uk/


Important information

This is a marketing communication and as such the views contained herein do not form part of an offer, nor are they to be taken as advice or a recommendation, to buy or sell any investment or interest thereto. Reliance upon information in this material is at the sole discretion of the reader. Any research in this document has been obtained and may have been acted upon by J.P. Morgan Asset Management for its own purpose. The results of such research are being made available as additional information and do not necessarily reflect the views of J.P. Morgan Asset Management. Any forecasts, figures, opinions, statements of financial market trends or investment techniques and strategies expressed are unless otherwise stated, J.P. Morgan Asset Management’s own at the date of this document. They are considered to be reliable at the time of writing, may not necessarily be all inclusive and are not guaranteed as to accuracy. They may be subject to change without reference or notification to you. It should be noted that the value of investments and the income from them may fluctuate in accordance with market conditions and taxation agreements and investors may not get back the full amount invested. Changes in exchange rates may have an adverse effect on the value, price or income of the products or underlying overseas investments. Past performance and yield are not reliable indicators of current and future results. There is no guarantee that any forecast made will come to pass. Furthermore, whilst it is the intention to achieve the investment objective of the investment products, there can be no assurance that those objectives will be met. J.P. Morgan Asset Management is the brand name for the asset management business of JPMorgan Chase & Co. and its affiliates worldwide. To the extent permitted by applicable law, we may record telephone calls and monitor electronic communications to comply with our legal and regulatory obligations and internal policies. Personal data will be collected, stored and processed by J.P. Morgan Asset Management in accordance with our EMEA Privacy Policy www.jpmorgan.com/emea-privacy-policy.

Investment is subject to documentation. The Annual Reports and Financial Statements, AIFMD art. 23 Investor Disclosure Document and PRIIPs Key Information Document can be obtained free of charge from JPMorgan Funds Limited or www.jpmam.co.uk/investmenttrust. This communication is issued by JPMorgan Asset Management (UK) Limited, which is authorised and regulated in the UK by the Financial Conduct Authority. Registered in England No: 01161446. Registered address: 25 Bank Street, Canary Wharf, London E14 5JP.

Material ID: 0903c02a82633642

http://www.jpmorgan.com/emea-privacy-policy

http://www.jpmam.co.uk/investmenttrust

jpmorgan european inves tment trust plc agm

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