23 Mar 2021 08:37
LONDON STOCK EXCHANGE ANNOUNCEMENT
JPMORGAN MULTI-ASSET TRUST PLC
(the 'Company')
Changes to
Investment Flexibility, Distribution Policy,
Reference Index and Name of Company
Legal Entity Identifier: 549300C0UCY8X2QXW762
The Company recently reached its three year anniversary and the Board, along with the Managers, believe this is an appropriate point at which to make the changes detailed in this statement. The purpose of these changes is to help the Company achieve the best possible investment results whilst also enabling clear communication of those results and the Company's purpose to shareholders. The Company's investment objective is unchanged and the Board continue to aim to provide Shareholders with income generation and capital growth, while seeking to maintain lower levels of portfolio volatility than a traditional equity portfolio:
· The Board has reconsidered their expectation that the Manager provides a fully covered dividend from portfolio income. This will provide the Managers with greater flexibility in portfolio construction:
o Although the valuations of higher yielding equites are currently attractive, this change in emphasis will allow the Managers greater freedom when allocating the portfolio to strategies across the JPMorgan platform.
· The Company's progressive distribution policy to be linked to inflation:
o The Board will adjust the existing policy so that the total annual distribution will grow, as a minimum, in line with the UK's annual Consumer Price Index (CPI), from the current distribution level of 4 pence per share, per annum, paid quarterly. Based on the most recently published (February 2021) CPI figures by the Office for National Statistics, the Company envisages paying a distribution of 4.1 pence per share for the Company's financial year ending 28th February 2022. Distributions will continue to be paid to shareholders in August, November, February and May of each year.
o It is expected that the first interim distribution for this financial year will be declared in June, payable in August 2021.
o The Company will draw on distributable revenue and capital reserves when the dividend is not covered by current year income.
o Cognisant of a rise in the medium term risk of rising inflation the Board believe this will be an attractive and comforting policy.
· A change in Reference Index:
o The Company's existing Reference Index is LIBOR one-month Sterling +4.50%, or 4.77% for the Company's annual financial period ending 28th February 2021.
o LIBOR is likely to cease to exist by the end of 2021. While SONIA (Sterling Overnight Interbank Average Rate) is likely to be the most widely used replacement for LIBOR, this is an opportune moment for the Board to review the Company's Reference Index and its relevance to Shareholders.
o After consideration, the Board have decided that a clear and simple Reference Index would better serve Shareholders. The Board will therefore adopt a Reference Index equivalent to a total return of 6% per annum, measured over a rolling five year period. The Manager's believe that, although higher than the existing target, this return is achievable based on JPMorgan's long term return assumptions which inform the Strategic Asset Allocation for the portfolio, together with additional alpha from active positioning from both the bottom up and top down.
· Name Change:
o To better reflect the investment objective of providing an attractive total return of growth and income, the Company will change its name to JPMorgan Multi-Asset Growth & Income plc. The Company's stock market ticker, MATE, will not change.
During the Company's financial year ending 28th February 2021 global equity markets experienced unforeseen market conditions and greater volatility. The Company's discount rating has widened during this period.
The Board recognises that it is in the interests of Shareholders to maintain a share price as close as possible to the Net Asset Value per Share but also recognises the importance of maintaining the size of the Company. With the changes outlined above, the Board believe an improvement in the Company's performance will allow a narrowing of the discount rating. The Board will consider using buybacks to address imbalances in supply of and demand for the Company's shares in the market, when it believes it is in the interests of all Shareholders and subject to normal market conditions.
Commenting on the above changes, Sarah MacAulay, Chairman of the Board said:
"The Board believe that the changes being implemented will be beneficial to all shareholders. The Investment Managers will have more flexibility to invest where the very best risk-adjusted returns can be found with Shareholders continuing to benefit from an attractive dividend level."
More information will be provided in the Company's Annual Report & Financial Statements for year ended 28th February 2021, which are expected to be published in early June 2021. All changes described in this announcement are effective immediately, except the name change, which is expected to be implemented before the end of April 2021 and will be notified by a separate RNS.
The Managers will be hosting a webinar in the coming weeks to provide an update in relation to these changes and answer questions from existing and prospective Shareholders.
For and on behalf of JPMorgan Funds Limited, Secretary
23rd March 2021
For further information:
Paul Winship 020 7742 4000