JPMorgan Global Growth & Income to combine with JPE

[77ss]

Another combination. With JPMorgan Elect plc ­- Managed Growth (JPE.L).

https://www.investegate.co.uk/jpmorgan- ... 00062577E/

A relatively small IT (ca. £320m) being swallowed by a larger stablemate (ca. £1300m).

I don't know much about JPE, but I note that it has a much poorer 5 year total return than JGGI (29% vs 62%).

[Dod101]

Another combination. With JPMorgan Elect plc ­- Managed Growth (JPE.L).

https://www.investegate.co.uk/jpmorgan- ... 00062577E/

A relatively small IT (ca. £320m) being swallowed by a larger stablemate (ca. £1300m).

I don't know much about JPE, but I note that it has a much poorer 5 year total return than JGGI (29% vs 62%).

Thanks. As a shareholder in JGGI I am perfectly happy with these proposals. Not very significant and it sounds like a tidying up of the J P Morgan IT stable.

Dod

[richfool]

Yes, I spotted that earlier, but couldn't post it as I had to go out.

I note that JPE is something of a fund of funds, holding other IT's, mainly, but not exclusively from within the JP Morgan stable.

I note its holdings include: JAM (JP Morgan American Trust), JCH (Claverhouse), MUT and FGT.

I ponder whether its worth buying a few JPE as a back door way of topping up JGGI (JGGI is my largest holding currently).

[scotia]

If these were two totally independent ITs, it would be difficult to see the advantage to JGGI (JPMorgan Global Growth & Income) in taking over JPE (JP Elect Managed Growth)
JGGI Invests successfully in worldwide shares. It has dividend of approx 4%, and its total return over 5 years has exceeded a world tracker by about 10%.
JPE invests in other (chiefly JPMorgan) ITs. It has a dividend yield of around 2%, and its total return over 5 years is about 20% less than a world tracker.
So JGGI appears to be gaining another £250M of poorer performing investments to add to its own successful £1.45G investments.

[Dod101]

Yes, I spotted that earlier, but couldn't post it as I had to go out.

I note that JPE is something of a fund of funds, holding other IT's, mainly, but not exclusively from within the JP Morgan stable.

I note its holdings include: JAM (JP Morgan American Trust), JCH (Claverhouse), MUT and FGT.

I ponder whether its worth buying a few JPE as a back door way of topping up JGGI (JGGI is my largest holding currently).

Surely only worthwhile if there is a significantly bigger discount with JPE than with JGGI? There does not seem to be.

Dod

[77ss]

If these were two totally independent ITs, it would be difficult to see the advantage to JGGI (JPMorgan Global Growth & Income) in taking over JPE (JP Elect Managed Growth)
JGGI Invests successfully in worldwide shares. It has dividend of approx 4%, and its total return over 5 years has exceeded a world tracker by about 10%.
JPE invests in other (chiefly JPMorgan) ITs. It has a dividend yield of around 2%, and its total return over 5 years is about 20% less than a world tracker.
So JGGI appears to be gaining another £250M of poorer performing investments to add to its own successful £1.45G investments.

The regulatory statement says that the assets of JPE will be transitioned into assets in line with JGGI's current investment policy.

[Dod101]

If these were two totally independent ITs, it would be difficult to see the advantage to JGGI (JPMorgan Global Growth & Income) in taking over JPE (JP Elect Managed Growth)
JGGI Invests successfully in worldwide shares. It has dividend of approx 4%, and its total return over 5 years has exceeded a world tracker by about 10%.
JPE invests in other (chiefly JPMorgan) ITs. It has a dividend yield of around 2%, and its total return over 5 years is about 20% less than a world tracker.
So JGGI appears to be gaining another £250M of poorer performing investments to add to its own successful £1.45G investments.

The regulatory statement says that the assets of JPE will be transitioned into assets in line with JGGI's current investment policy.

Yes. This is just a tidying up exercise by J P Morgan as I said earlier. It marginally helps JGGI as it increases the assets under management and may reduce their cost percentage a bit. I rather object to this sort of thing though as it is the manager that is making the running rather than the respective Boards, although of course, they go through the motions.

Dod

[scotia]

The regulatory statement says that the assets of JPE will be transitioned into assets in line with JGGI's current investment policy.

OK - some clarification. JPMorgan Global Growth & Income consists of 3 parts - JPEI (managed income) containing £74M of (mainly) shares, JPEC (managed cash) containing £8M of cash, and JPE (managed growth) which contains the remainder, approx £170M, mainly in ITs.

From https://quoteddata.com/2022/10/jpmorgan-elect-absorbed-jpmorgan-global-growth-income/#:~:text=The%20boards%20of%20JPMorgan%20Elect,of%20the%20current%20calendar%20year.

Managed Income (JPEI) assets held in this portfolio will be realised as soon as practicable prior to the point of liquidation and transitioned into assets in line with JGGI’s current investment policy. These assets will then be transferred to JGGI, with Managed Income shareholders receiving new JGGI ordinary shares. The same would apply to Managed Cash (JPEC) assets.

However, within the Managed Growth (JPE) portfolio there is an element of less liquid investments. So Managed Growth investors will get new JPMorgan Global Growth and Income C shares in respect of a separate pool of assets. The C share portfolio will be realised over time on an orderly basis and transitioned in line with the current JGGI investment policy. Once this process is complete, the C shares will be converted into new ordinary shares on an NAV for NAV basis.

Ahead of this process, holders of all three classes can elect to switch into one of the other classes of Growth, Income and Cash. Anyone who ends up holding Cash shares can opt to cash these in rather than swap them for JPMorgan Global Growth and Income shares – this is the cash alternative/redemption opportunity option for this deal.

In reading the above, "realised and transitioned" sounds like it is effectively a cash transfer, with there being some delay in liquidating part of the investments. So it does look as if there should be no deleterious effect on current JGGI ordinary shareholders.

Edit - I suspect I have been confused with the three classes in computing the current size of JPE. I should probably not have subtracted the sizes of JPEI and JPEC from it.

[Dod101]

The regulatory statement says that the assets of JPE will be transitioned into assets in line with JGGI's current investment policy.

OK - some clarification. JPMorgan Global Growth & Income consists of 3 parts - JPEI (managed income) containing £74M of (mainly) shares, JPEC (managed cash) containing £8M of cash, and JPE (managed growth) which contains the remainder, approx £170M, mainly in ITs.

From https://quoteddata.com/2022/10/jpmorgan-elect-absorbed-jpmorgan-global-growth-income/#:~:text=The%20boards%20of%20JPMorgan%20Elect,of%20the%20current%20calendar%20year.

Managed Income (JPEI) assets held in this portfolio will be realised as soon as practicable prior to the point of liquidation and transitioned into assets in line with JGGI’s current investment policy. These assets will then be transferred to JGGI, with Managed Income shareholders receiving new JGGI ordinary shares. The same would apply to Managed Cash (JPEC) assets.

However, within the Managed Growth (JPE) portfolio there is an element of less liquid investments. So Managed Growth investors will get new JPMorgan Global Growth and Income C shares in respect of a separate pool of assets. The C share portfolio will be realised over time on an orderly basis and transitioned in line with the current JGGI investment policy. Once this process is complete, the C shares will be converted into new ordinary shares on an NAV for NAV basis.

Ahead of this process, holders of all three classes can elect to switch into one of the other classes of Growth, Income and Cash. Anyone who ends up holding Cash shares can opt to cash these in rather than swap them for JPMorgan Global Growth and Income shares – this is the cash alternative/redemption opportunity option for this deal.

In reading the above, "realised and transitioned" sounds like it is effectively a cash transfer, with there being some delay in liquidating part of the investments. So it does look as if there should be no deleterious effect on current JGGI ordinary shareholders.

Edit - I suspect I have been confused with the three classes in computing the current size of JPE. I should probably not have subtracted the sizes of JPEI and JPEC from it.

Clarification of the clarification. JGGI does not consist of three parts, but JPE does.

JGGI is getting about £350 million of additional funds and that is about all there is in it for JGGI shareholders.

Dod

[scotia]

Clarification of the clarification. JGGI does not consist of three parts, but JPE does.

JGGI is getting about £350 million of additional funds and that is about all there is in it for JGGI shareholders.

Dod

Thank You!
The perils of cutting, pasting and editing

[Noslien]

Do we get another half a dozen Board Directors like we did last time I wonder?

Dod is right, the BOD's should be making these decisions. If all current JGGI shareholders are getting is a few hundreths of a percent less fees is that the Boards justification.

[Dod101]

Do we get another half a dozen Board Directors like we did last time I wonder?

Dod is right, the BOD's should be making these decisions. If all current JGGI shareholders are getting is a few hundreths of a percent less fees is that the Boards justification.

I think they said there was to be one director extra from JPE.

I do not think it is doing the JGGI shareholders any harm and of course JPM have not said that they are driving the takeover but it seems to me to be pretty obvious that they could well be. In principle, I do not like ITs incorporating the name of their manager in their title because it is as if it is 'their' IT. A lot of IT boards, fortunately, have been showing their independence in recent years though and sacking their managers and we should all welcome this.

Dod

[77ss]

Do we get another half a dozen Board Directors like we did last time I wonder?

....

It baffles me that so many other posters can't seem to bothered to read the relevant regulatory statement - to which a link was provided!

[Noslien]

It baffles me that so many other posters can't seem to bothered to read the relevant regulatory statement

You are right I didn't read down far enough. I'm afraid my cynicism showed through

[scotia]

Clarification (hopefully) of number of Directors. In the latest Annual Report (to 30th June 2022) of JGGI, there are four directors listed, plus another four added from the Scottish Investment Trust on 1st September. From 3rd November, two will be retiring, and with the addition of JPE there will be another one added - which makes seven.
Opinions sought - how many directors does an IT require?

[Dod101]

Clarification (hopefully) of number of Directors. In the latest Annual Report (to 30th June 2022) of JGGI, there are four directors listed, plus another four added from the Scottish Investment Trust on 1st September. From 3rd November, two will be retiring, and with the addition of JPE there will be another one added - which makes seven.
Opinions sought - how many directors does an IT require?

Six or seven seems quite normal and as long as they are bringing different views and experience it is probably not of critical importance. The takeover of the assets of SIT was maybe conditional on keeping all/most of the directors in a job at least in the short term.

I have no idea of how many they require - that is another question.

Dod

[BobGe]

Hardly a 'merger', more a trampling. This is likely to have little effect on JGGI but perhaps significantly more for JPM Elect holders for it is their assets which are proposed to be liquidated and it will result in a notable change in investment profile. Elect Growth is, as reported, much a 'fund of funds' but UK centric whereas JGGI is US centric. Elect Income is again UK centric but holds income stocks. Elect Cash is small and, fairly obviously, does what's written on the tin.

JGGI - https://www.trustnet.com/factsheets/t/f ... income-plc
Elect Growth - https://www.trustnet.com/factsheets/T/H ... 000407521p
Elect Income - https://www.trustnet.com/factsheets/T/H ... -shs-0001p
Elect Cash - https://www.trustnet.com/factsheets/T/H ... -shs-0001p

Scroll down to see details of the investment profiles.

The problem for Elect holders may be the matter of timing viz-a-viz the quite different investment styles.

The 'fund of funds' approach of Elect Growth may spread / limit risk, but also adds cost of course. The performance difference highlighted by Dod is more a reflection of different market performance though, viewed with hindsight. For Elect, 'becoming' JGGI will be a major change and how that may work out going forwards is anyone's guess. Perhaps it would be better if effected without the volatility of recent events and present outlook. But they are looking to close this over the next couple of months... I'm not sure that suggests they are considering Elect holders best interests rather than just looking after their own.

[Dod101]

Hardly a 'merger', more a trampling. This is likely to have little effect on JGGI but perhaps significantly more for JPM Elect holders for it is their assets which are proposed to be liquidated and it will result in a notable change in investment profile. Elect Growth is, as reported, much a 'fund of funds' but UK centric whereas JGGI is US centric. Elect Income is again UK centric but holds income stocks. Elect Cash is small and, fairly obviously, does what's written on the tin.

JGGI - https://www.trustnet.com/factsheets/t/f ... income-plc
Elect Growth - https://www.trustnet.com/factsheets/T/H ... 000407521p
Elect Income - https://www.trustnet.com/factsheets/T/H ... -shs-0001p
Elect Cash - https://www.trustnet.com/factsheets/T/H ... -shs-0001p

Scroll down to see details of the investment profiles.

The problem for Elect holders may be the matter of timing viz-a-viz the quite different investment styles.

The 'fund of funds' approach of Elect Growth may spread / limit risk, but also adds cost of course. The performance difference highlighted by Dod is more a reflection of different market performance though, viewed with hindsight. For Elect, 'becoming' JGGI will be a major change and how that may work out going forwards is anyone's guess. Perhaps it would be better if effected without the volatility of recent events and present outlook. But they are looking to close this over the next couple of months... I'm not sure that suggests they are considering Elect holders best interests rather than just looking after their own.

I am a shareholder in JGGI but not in JPE. However it would be interesting to read what the directors of JPE have to say but I have not been able to find an RNS on their website. Any shareholder in JPE needs to see that to see why they are proposing this combination. I assume they will have published one as JGGI would be unlikely to publish their RNS without the agreement of the directors of JPE.

Dod

[BobGe]

There is an RNS issued under the JPE epic. It repeats the arguments from the JGGI viewpoint.
https://www.investegate.co.uk/jpmorgan- ... 00052535E/

"JPE" somewhat confusingly may refer to JPM Elect as the head for all three underlying investment categories, but is also used as the official epic for the Elect Growth segment. Note that there is a quarterly conversion feature allowing Elect holders to switch between the Growth (JPE), Income (JPEI) and Cash (JPEC) segments, a concept which probably will serve to allow most reading here to understand what JPM Elect is really about.

For anyone else, here's the web page: https://am.jpmorgan.com/gb/en/asset-man ... elect-plc/


I'd say JPM's desire is to close down JPM Elect by the year end and this is just a way to go about it.

[Dod101]

There is an RNS issued under the JPE epic. It repeats the arguments from the JGGI viewpoint.
https://www.investegate.co.uk/jpmorgan- ... 00052535E/

"JPE" somewhat confusingly may refer to JPM Elect as the head for all three underlying investment categories, but is also used as the official epic for the Elect Growth segment. Note that there is a quarterly conversion feature allowing Elect holders to switch between the Growth (JPE), Income (JPEI) and Cash (JPEC) segments, a concept which probably will serve to allow most reading here to understand what JPM Elect is really about.

For anyone else, here's the web page: https://am.jpmorgan.com/gb/en/asset-man ... elect-plc/


I'd say JPM's desire is to close down JPM Elect by the year end and this is just a way to go about it.

If I were a shareholder in JPE and believed in it, I would be asking the Directors of JPE why they think it is a good idea to close down the Trust. They have not made much of an argument in their RNS. They have highlighted the arguments from the viewpoint of JGGI as far as I can see. Also it would be interesting to know why they do not just wind up JPE and return the assets to its shareholders. Cynics might say that it is so that J P Morgan can benefit from at least some of the management fees generated by the enlarged JGGI against the losses from the disappearance of JPE.

The conclusion of BobGe is one I suggested earlier in this thread that this is a tidying up exercise led by the manager. So much for the 'independent board' of an investment trust. I am not saying it is wrong because JPE is a very small trust and it has not made much of a success of its approach, but the decision ought to be led by its Directors not the managers.

Dod