The Lemon Fool

JP Morgan's 2 European IT's (JETI and JETG) have been combined to be come one new fund: JP Morgan European Growth and Income (JEGI).

I held the income fund (JETI) as I wanted income, but now I have a Growth and Income fund. I bought at a yield of 4.4%, but I suppose that will now reduce with the combined objectives of the new fund being growth and income rather than just income.

I wonder why they have done this as it will surely discourage those that want just income and those that want just growth?

I shall continue to hold, until I at least know the yield, but my rationale for buying this IT has now been removed.

FD

funduffer wrote:JP Morgan's 2 European IT's (JETI and JETG) have been combined to be come one new fund: JP Morgan European Growth and Income (JEGI).

I held the income fund (JETI) as I wanted income, but now I have a Growth and Income fund. I bought at a yield of 4.4%, but I suppose that will now reduce with the combined objectives of the new fund being growth and income rather than just income.

I wonder why they have done this as it will surely discourage those that want just income and those that want just growth?

I shall continue to hold, until I at least know the yield, but my rationale for buying this IT has now been removed.

FD

The separate trusts weren't very large, thus by combining them they can increase the "weight" of the trust and hopefully make it more appealing to large investors. Hopefully it will also enable them to reduce costs.

They will also be adopting the common JP Morgan policy of setting income levels and supporting them from capital, thus enabling them to increase the growth stocks that they hold without compromising the dividend. So you can now have income and growth, rather than just one or the other!

I believe they are targetting an income level of 4.00% as they have done with several of their other trusts - e.g. JGGI and JAGI.

I hold/held both JETI and JETG, so now have a single combined holding of JEGI.

richfool wrote:

funduffer wrote:JP Morgan's 2 European IT's (JETI and JETG) have been combined to be come one new fund: JP Morgan European Growth and Income (JEGI).

I held the income fund (JETI) as I wanted income, but now I have a Growth and Income fund. I bought at a yield of 4.4%, but I suppose that will now reduce with the combined objectives of the new fund being growth and income rather than just income.

I wonder why they have done this as it will surely discourage those that want just income and those that want just growth?

I shall continue to hold, until I at least know the yield, but my rationale for buying this IT has now been removed.

FD

The separate trusts weren't very large, thus by combining them they can increase the "weight" of the trust and hopefully make it more appealing to large investors. Hopefully it will also enable them to reduce costs.

They will also be adopting the common JP Morgan policy of setting income levels and supporting them from capital, thus enabling them to increase the growth stocks that they hold without compromising the dividend. So you can now have income and growth, rather than just one or the other!

I believe they are targetting an income level of 4.00% as they have done with several of their other trusts - e.g. JGGI and JAGI.

I hold/held both JETI and JETG, so now have a single combined holding of JEGI.

For additional information see:

https://citywire.com/investment-trust-i ... e/a1576084

https://www.theaic.co.uk/aic/news/cityw ... ios-in-one

richfool wrote:I believe they are targetting an income level of 4.00% ...

Yes, but 4% of NAV, not a 4% yield.

Currently they're on an 11% discount so that would suggest a yield of 4.5%.
Which is OK.

I agree it's annoying to buy an income IT and have it morph into something else, but I probably don't feel strongly enough about it to jump ship.

V8

richfool wrote:They will also be adopting the common JP Morgan policy of setting income levels and supporting them from capital, thus enabling them to increase the growth stocks that they hold without compromising the dividend. So you can now have income and growth, rather than just one or the other!

What's not compromised under the new policy is the yield (of NAV, on a specific date), not the dividend . The dividend will now yo-yo with the NAV. So you can now have unreliable income and growth...

mc2fool wrote:

richfool wrote:They will also be adopting the common JP Morgan policy of setting income levels and supporting them from capital, thus enabling them to increase the growth stocks that they hold without compromising the dividend. So you can now have income and growth, rather than just one or the other!

What's not compromised under the new policy is the yield (of NAV, on a specific date), not the dividend . The dividend will now yo-yo with the NAV. So you can now have unreliable income and growth...

That hasn't and doesn't trouble me. I am a happy holder of JGGI and JAGI as well as JEGI. I am happy to have the broader exposure that includes growth stocks, rather than a trust which is obliged to hold or concentrate on income stocks in order to support its dividend.

It doesn't bother me if the income varies slightly from quarter to quarter, or for that matter if the NAV or SP are that bit more volatile. I am not dependent on the income, though I do have an overall focus on it. So it suits me perfectly.

... and JEGI is down 4.95% today, ouch!

... and at a discount to NAV of 10.6%

Thanks for the responses. If the yield ends up around 4% I am OK with that and will hang on to JEGI.

Not sure the reason for the ~5% price drop today though?

I'm going to continue to hold and just monitor progress. JETI has been pretty good up until now, so I hope the managers of the combined ITs will still give me what I need. It's only one spoke in my wheel, so I do not need to over-react.

At this discount, I might buy more*.

Arb.

*by odd coinicidence, I've just sold something else, so there is cash floating.

Well I topped up today at 90.3p. It was difficult to make the trade despite the revised holding showing in my ISA. The broker's system first told me it wasn't eligible to be held in an ISA, then after they sorted that out, it told me a KIID wasn't available and that I hadn't yet viewed the KIID. So I went back to them again and they sorted that out and I was able to top up my holding.

I'm now waiting for the various factsheets to become available and to see exactly what the dividend will be and what the yield is. HL don't recognise it yet.

(The next activity for me will be SCIN being taken over and absorbed into JGGI.)

richfool wrote:The next activity for me will be SCIN being taken over and absorbed into JGGI.

In the collectives world, the habit of name changing and merging makes it hard to track long-term performance.
One sometimes wonders whether that is part of the motivation!

V8

88V8 wrote:

richfool wrote:The next activity for me will be SCIN being taken over and absorbed into JGGI.

In the collectives world, the habit of name changing and merging makes it hard to track long-term performance.
One sometimes wonders whether that is part of the motivation!

V8

I notice in my Halifax account, the name has been changed and also the number of shares is different. What is strange is that they haven't let me know of the change - not that it really matters as regards my unitising or record keeping. AFAIK this is just an invisible swap out and in as regards my basket records and units.

Arb.

funduffer wrote:JP Morgan's 2 European IT's (JETI and JETG) have been combined to be come one new fund: JP Morgan European Growth and Income (JEGI).

I held the income fund (JETI) as I wanted income, but now I have a Growth and Income fund. I bought at a yield of 4.4%, but I suppose that will now reduce with the combined objectives of the new fund being growth and income rather than just income.

I wonder why they have done this as it will surely discourage those that want just income and those that want just growth?

I shall continue to hold, until I at least know the yield, but my rationale for buying this IT has now been removed.

FD

Thanks for the news. Never heard of them, but wouldn't mind adding some growthy ITs to my Euro section.

I've held European Assets (EAT) for ages and they've gone up and down but still throw off humongous divis.

However, having worked half my life in France, Germany and Italy, I somehow can't see the Euro zone as a fast growth area. More a nice, plodding along, safe sort of holding.

Steve

stevensfo wrote:

funduffer wrote:JP Morgan's 2 European IT's (JETI and JETG) have been combined to be come one new fund: JP Morgan European Growth and Income (JEGI).

I held the income fund (JETI) as I wanted income, but now I have a Growth and Income fund. I bought at a yield of 4.4%, but I suppose that will now reduce with the combined objectives of the new fund being growth and income rather than just income.

I wonder why they have done this as it will surely discourage those that want just income and those that want just growth?

I shall continue to hold, until I at least know the yield, but my rationale for buying this IT has now been removed.

FD

Thanks for the news. Never heard of them, but wouldn't mind adding some growthy ITs to my Euro section.

I've held European Assets (EAT) for ages and they've gone up and down but still throw off humongous divis.

However, having worked half my life in France, Germany and Italy, I somehow can't see the Euro zone as a fast growth area. More a nice, plodding along, safe sort of holding.

Steve

Re your comment about wanting some growthy IT's to your Euro section, BRGE (Blackrock Greater Europe) has been my best performing European trust in terms of capital growth.

Disc, I hold BRGE, EAT and JEGI (for a combination of reasons, including growth and income and exposure to growth stocks).

So a JEGI dividend has been announced as 1.1p per share, payable 1st April 2022:

https://www.investegate.co.uk/jpmorgan- ... 34450004C/

The equivalent dividend from 1 year ago for JETI was 2.5p per share (this was described as the '4th interim dividend'). But of course you got roughly 1.725 JEGI shares for every JETI share you held. So that 2.5p is really worth 2.5/1.725 = 1.45p in JETI currency.

So this year's spring dividend of 1.1p represents a 25% reduction relative to last year's JETI dividend.

I suppose this is what I should have expected in changing from an income fund to a growth and income fund.

The odd thing is that this dividend is described the 'first interim dividend for the year ending 31/3/2022' , whereas for JETI the dividend at this time of last year is described as the 4th interim dividend. So I am now confused. Does this mean the dividend timetable has all changed and the 4th dividend (usually larger) will be at some other time in the year?

funduffer wrote:So a JEGI dividend has been announced as 1.1p per share, payable 1st April 2022:

https://www.investegate.co.uk/jpmorgan- ... 34450004C/

The equivalent dividend from 1 year ago for JETI was 2.5p per share (this was described as the '4th interim dividend'). But of course you got roughly 1.725 JEGI shares for every JETI share you held. So that 2.5p is really worth 2.5/1.725 = 1.45p in JETI currency.

So this year's spring dividend of 1.1p represents a 25% reduction relative to last year's JETI dividend.

I suppose this is what I should have expected in changing from an income fund to a growth and income fund.

The odd thing is that this dividend is described the 'first interim dividend for the year ending 31/3/2022' , whereas for JETI the dividend at this time of last year is described as the 4th interim dividend. So I am now confused. Does this mean the dividend timetable has all changed and the 4th dividend (usually larger) will be at some other time in the year?

I think I read somewhere that they would be targeting a dividend of 4% (on NAV) as with several of their other trusts.

The SP is currently c 92.2p though I don't know the NAV. Both JETI and JEGT were previously trading at discounts to NAV.

funduffer wrote:The odd thing is that this dividend is described the 'first interim dividend for the year ending 31/3/2022' , whereas for JETI the dividend at this time of last year is described as the 4th interim dividend. So I am now confused. Does this mean the dividend timetable has all changed and the 4th dividend (usually larger) will be at some other time in the year?

In the Reorganisation Circular, they stated [my emphasis]

As a result of the Redesignation being expected to conclude in early February 2022, the Board
recognises that there will be a delay until it is in a position to announce the inaugural New Target
Dividend for the financial year ending 31 March 2023. Nonetheless, during this transition period the
Board intends to declare a fourth interim dividend for the financial year ending 31 March 2022 on a
basis that is consistent with the New Target Dividend. The Board expects, therefore, to declare a
fourth interim dividend of at least 1.0 pence per Ordinary Share, being equivalent to one quarter of
4 per cent. of the NAV per Ordinary Share as determined at the Calculation Date, which will be
paid to all Shareholders. This dividend is expected to be declared on 17 February 2022, with the
ex-dividend date being 24 February 2022 and pay date being 1 April 2022.

So something has gone a bit awry with the communications.


In the same Circular, they give proposed dividend dates for 2022-23

Period to which
dividend relates            Declaration     Ex-Date    Pay date    Ordinary Shares
Year Ending 31 March 2023
First Interim                16-Jun-22     23-Jun-22   29-Jul-22   1% of NAV on 31 March 2022
Second Interim               01-Sep-22     08-Sep-22   14-Oct-22   1% of NAV on 31 March 2022
Third Interim                17-Nov-22     24-Nov-22   06-Jan-23   1% of NAV on 31 March 2022
Final Interim                16-Feb-23     23-Feb-23   31-Mar-23   1% of NAV on 31 March 2022

Sorry, I can't find their circular on their website; the above is from my records.

But from their site, NAV yesterday, 16 Feb, was 99.60p, a discount of 8.18%
https://am.jpmorgan.com/gb/en/asset-management/per/products/jpmorgan-european-growth-income-plc-gb00bpr9y246

funduffer wrote: But of course you got roughly 1.725 JEGI shares for every JETI share you held.

Funduffer,

Where did you get this figure from? I can find no explicit reference to the conversion of existing JETI shares to JEGI shares.

The closest thing I could find is this link to the AIC website:

https://www.theaic.co.uk/companydata/0P00008ZI3/announcements/232037

where it is stated that every 2.90576038 of (existing) income shares will become 5.01205895 income shares which gives a conversion of 1.72487 (to 5 dp).

BBLSP1 wrote:

funduffer wrote: But of course you got roughly 1.725 JEGI shares for every JETI share you held.

Funduffer,

Where did you get this figure from? I can find no explicit reference to the conversion of existing JETI shares to JEGI shares.

The closest thing I could find is this link to the AIC website:

https://www.theaic.co.uk/companydata/0P00008ZI3/announcements/232037

where it is stated that every 2.90576038 of (existing) income shares will become 5.01205895 income shares which gives a conversion of 1.72487 (to 5 dp).

I can only say what happened in my account to my JETI shares. I bought JETI (N shares) last year, and after the merger my account now holds 1.7247xN JEGI shares. I didn't do anything, the broker just did it for me. I guess I may have lost a small fraction of a share along the way!

The corporate notice I received from my broker says:

The proposed new name of the Company is JP Morgan European Growth and Income Plc.

On the 20th December 2021 the Company announced proposals for unifying the Company's Growth Share and Income Share classes into a single share class of Ordinary shares.

The Restructuring and Name change are subject to shareholder approval at a General Meeting to be held on 24th January 2022.

The ratio at which you will receive New Ordinary shares in exchange for your Existing shares will be calculated on the basis of the shares' respective Net Asset Values (NAV) on the NAV Calculation Date, being 31st January 2022.

Unless you hold your shares in a ShareBuilder account, no fractions of shares will be issued. Any resulting cash entitlements will be dealt with in accordance with our Terms & Conditions.

FD