JPMorgan American Regulatory News (JAM)

LONDON STOCK EXCHANGE ANNOUNCEMENT

JPMORGAN AMERICAN INVESTMENT TRUST PLC

UNAUDITED HALF YEAR RESULTS

FOR THE SIX MONTHS ENDED 30TH JUNE 2020

Legal Entity Identifier: 549300QNAI4XRPEB4G65

Information disclosed in accordance with the DTR 4.2.2

CHAIR'S STATEMENT

During the six months ended 30th June 2020, the Covid-19 pandemic has spread across the world with the tragic loss of over half a million lives leading to widespread community hardship and deep recessionary conditions. Despite massive emergency economic responses by governments and monetary authorities, it is clear that there is still a considerable way to go before anything resembling previous normality is restored.

The reporting period saw financial markets, in the United States and worldwide, dramatically affected by the spread of the Covid-19 pandemic. As investors attempted to assess the implications of the pandemic, the US stock market fell by 30.4% to a low point on 23rd March 2020, before rebounding by 39.3% by 30th June 2020, finishing the period 3.1% below (in US dollar terms) the level pertaining at the beginning of the half year. This degree of volatility is rarely seen and reflected the extreme uncertainty the pandemic has produced.

Performance

The total return on net assets per share in sterling terms over the period was +2.7%. The return to Ordinary shareholders per share in sterling terms was +0.3%, reflecting a small widening of the Company's discount to net asset value per share ('NAV') at which it traded at the end of the period. The total return from the Company's benchmark, the S&P 500 Index in sterling terms, was +3.8%. More information about the portfolio and individual stock performance can be found in the Managers' report.

Share price and Discount Management

The Company's shares have traded at a discount to the NAV throughout the period under review and the Company has continued to buy back its shares in line with the Board's commitment to its shareholders to buy shares back when they stand at anything more than a small discount to NAV. The Company bought into Treasury a total of 4,035,023 shares or 1.9% of the Company's issued share capital at the beginning of 2020 (30th June 2019: 1.8%). These shares were purchased at an average discount to NAV of 5.4%, producing a modest accretion to the NAV for continuing shareholders.

Dividend

Whilst capital growth is the primary aim of the Company, the Board is aware that dividend receipts can be an important element of shareholder returns. The Board continues to monitor the net income position of the Company, particularly given the potential threat to dividend payments arising from the effects of the Covid-19 pandemic. In the absence of unforeseen circumstances the Board is aiming to pay out a total dividend for the financial year of at least 6.5 pence per share, unchanged from that paid in respect of the 2019 financial year.

The Company is declaring a dividend of 2.5 pence per share (2019: 2.5 pence) for the first six months of this year, which will be payable on 2nd October 2020 to shareholders on the register on 28th August 2020.

Gearing

The Board maintains strong oversight of the Company's gearing policy and the source and use of available leverage. The ability to borrow money for investment is a key differentiating feature of investment trusts.

The Company has a strategic gearing level of 10% and it has operated with a tactical gearing level of 10%, plus or minus 4%. As announced on 9th June 2020, following a review of the market conditions, the Board decided that while the strategic gearing level remained unchanged at 10%, the tactical level of gearing would be amended to 5% while the permitted range around this level will be widened from plus or minus 4% to plus or minus 5%. This meant that over the short term gearing would vary between 0% and 10% and currently stands at 7.2% at the time of writing. The purpose of the wide range around the central level of 5% is to give the Managers some additional flexibility in the current volatile market conditions.

The Company's gearing strategy is implemented through the use of bank borrowing facilities, with the Company currently having access to a £80 million floating rate debt facility with ING Bank expiring in July 2022. As announced earlier this year, the leverage available to the Company has been increased further through the issue of $65 million of fixed-rate 11 year unsecured loan notes via a private placement with a UK based life assurance company at a fixed interest rate of 2.55% per annum. These notes, which are due for repayment in February 2031, provide the Company with long-dated, fixed-rate financing at an attractive rate of interest over the term of the notes, diversifying the source, tenor and rate of the leverage available to the Company. Together with the £80 million revolving credit facility, these loan notes provide the Company with sufficient debt to ensure that it can operate at the Board's expected strategic gearing level, including any shorter term tactical changes adopted from time to time.

Annual General Meeting

At the AGM on 7th May, all resolutions were duly passed by shareholders. Sadly, circumstances meant that only a purely functional meeting could be held and I am grateful to shareholders for their support and forbearance in light of the pandemic. I would encourage shareholders regularly to visit the Company's website (www.jpmamerican.co.uk) for updated information on the Company. The Board remains keen to arrange an in person meeting with shareholders when circumstances permit.

Board

As announced on 7th April 2020, Ms Claire Binyon has joined the Board from 1st June 2020. She is currently a non-executive director of NHBS Ltd and Murray International Trust PLC, is a chartered accountant and brings to the Board a wealth of corporate and strategic experience gained at a number of large PLCs.

Outlook

The remainder of this year presents investors with more than the usual level of uncertainty associated with predicting investment outturns. 2020 is a Presidential election year, and the United States remains gripped in the Covid-19 pandemic with little sign of it abating at present. The degrees of monetary stimulation already provided by the Federal Reserve, and fiscal support provided by Congress, are simply unprecedented. Their combined effect on the US economy and the stock market in which we are invested, is very difficult to assess, though they must be considered as a major positive for both.

More than is typically the case, successful investing through this period will depend on astute individual stock picking as the environment produces differentiated company outcomes. The Company's large cap portfolio of 40 best idea stocks, embracing both value and growth disciplines, would appear well suited to this situation, and I am hopeful our Managers will be able to capitalise on the opportunities the environment is presenting currently, as well as into the future.

Dr Kevin Carter

Chair 12th August 2020

INVESTMENT MANAGER'S REPORT

Market Review

The S&P 500 Index fell by -3.1% (in US dollar terms) in a volatile first half of the year, after an initial rise followed by a sharp drawdown in March, and an eventual rebound over the remaining months.

After a strong close to 2019, solid US economic indicators continued to buoy the S&P 500 at the beginning of the year. With the initial outbreak of Covid-19 in January, an early indication that its effects would be relatively short-lived propelled the S&P 500 to new all-time highs in February. However, the outbreak continued to grow and ramp up globally.

Distinct read-throughs began to take place in global economic data, such as in jobless claims and global manufacturing and service PMIs, ultimately leading to a dramatic downturn for the markets in March. Moreover, the US economy contracted at an annualised pace of 5.0% in the first quarter of the year, ending more than a decade-long expansion. Corporate earnings also took a hit with first quarter earnings contracting by 14% compared to 1Q19.

While extraordinary fiscal and monetary policy responses helped the market recover from April through June, disappointing economic data along with renewed tensions between the US and China generated frequent bouts of market volatility. While markets have sustained their upward movement and investors remain optimistic about the progress in developing a medication to fight Covid-19, both the trading and political relationship with China and a resurgence of the viral outbreak remain as potential areas of concern.

With the majority of S&P 500 sectors in the red, the information technology and consumer discretionary sectors bucked the trend and posted returns of 15% and 7%, respectively. On the other hand, energy was the largest detractor, falling by -35%, followed by financials which returned -24%.

Large cap stocks as represented by the S&P 500 Index outperformed the small cap Russell 2000 Index, as they returned -3.1% (in US dollar terms) versus -13.0%, respectively. Value continued to underperform growth, and dramatically so in this period as a lot of growth companies were beneficiaries of the pandemic lockdown, while a lot of value companies suffered. The Russell 3000 Value Index fell by -16.8% while the Russell 3000 Growth Index increased by 9.0%.

Performance and Overall Asset Allocation

The Company's net asset value rose by 2.7% in total return terms over the first six months of 2020. The return was below the benchmark, the S&P 500, which rose 3.8% in sterling terms. The large cap portion of the Company posted a positive return, in sterling terms, and delivered a small positive contribution to relative performance. The small cap growth allocation, which has been maintained at approximately 1% during this period, also added value as it outperformed the S&P 500 in sterling terms, with most of that outperformance coming during the second quarter rebound.

Conversely, gearing, and in particular movements in the sterling value of our US dollar debt, detracted somewhat from performance. The level of gearing was adjusted at regular intervals over the six month period within the gearing guidelines laid down by the Board. The Company increased its gearing from approximately 3% at the beginning of the year to 6% towards the end of February and subsequently increased it again to 10% in early March. As the market rally continued from March into April, the gearing was trimmed to keep it in line with guidelines. As a result of the sharp market rally as well as valuation concerns, the decision was taken to move to a tactical gearing level of 5% +/-5% in early June and the portfolio ended the period with 6.5% of gearing.

In general terms, stock selection added value and the portfolio benefitted from strong stock selection in the consumer discretionary, information technology and health care sectors, all of which outperformed their benchmark peer group. Within consumer discretionary, our exposure to Tesla was the top contributor. Tesla's share price rallied due to a faster than expected timeline for its Model Y production and efficient execution from their gigafactory in Shanghai. We continue to have conviction in the company driven by the ongoing secular shift to electric vehicles, positive free cash flow generation and improved operational efficiencies, as well as the company's significant competitive advantage in the development of self-driving software.

Within information technology, our overweight position in Synopsys was among the largest contributors. Synopsys is a software company that is at the forefront of new technologies with the world's most advanced tools for silicon chip design and application security testing. The company reported record orders in their electronic design automation software segment. Importantly, margins expanded, free cash flow generation remains robust, and management raised full year guidance - proof positive of resiliency in the business model that continues to impress. We believe the company remains well positioned to benefit from artificial intelligence, internet of things, wearables and autonomous vehicles as all these applications require sophisticated integrated circuits

PERFORMANCE ATTRIBUTION

FOR THE SIX MONTHS ENDED 30TH JUNE 2020

Source: JPMAM and Morningstar. All figures are on a total return basis.

Performance attribution analyses how the Company achieved its recorded performance relative to its benchmark index.

In contrast, our portfolio holdings in the financials and industrials sectors lagged their benchmark peer groups and detracted from performance. Within financials our sector allocation detracted during the period given our large overweight to the sector which was one of the worst performing sectors in the

 S&P 500. Within the sector, our overweight position in Loews was the largest detractor. The company reported its quarterly results that looked weak as the bankruptcy filing of Diamond Offshore led to a significant after-tax loss in the quarter. The main issue for Loews concerned its subsidiary CNA Financial, which missed expectations as a result of disruptions in the fixed income market. We continue to have conviction in the name and have added to the position during the period under review.

With regards to industrials, owning Delta Air Lines during some of the period negatively impacted results as airlines came under significant pressure after travel restrictions, due to Covid-19, were imposed. Delta was forced to cut their capacity by 70% and to ground more than 600 aircrafts. We exited the name in April and initiated a position in Southwest Airlines. We believe Southwest's balance sheet strength along with its strong brand, and diverse network will help it recover quicker as we start to emerge from the Covid-19 crisis.

In terms of portfolio positioning, our sector weights remain a by-product of our bottom-up investment analysis and our disciplined approach to portfolio construction. We remain focused on owning high quality businesses with durable competitive advantages, which we believe will provide stability should uncertainty persist and economic fundamentals deteriorate. Financials and information technology remain the largest allocations in the portfolio and represent 45% of the overall portfolio. However their representation relative to the S&P 500 diverge. Financials remains the largest overweight in the portfolio; however, we have tweaked the complexion of our exposure. Specifically, we have reduced those financials most at risk to deteriorating credit conditions, while adding to higher quality names. As the market has favoured technology names during this period, we have been mindful when it comes to risk management and have been trimming our positions selectively within the space particularly those names seen by the market as Covid-19 beneficiaries.

On the other hand, our largest underweights include the communication services, consumer staples and industrials sectors. As for consumer staples, we continue to find names with better risk/reward profiles in other sectors. In particular, we have found names with more defensive characteristics such as Ball in the materials space.

The construction of the large-cap portfolio allocates between value and growth stocks, with the allocation allowed to vary between 60:40 and 40:60. At the period end, value stocks comprised some 46% of the large-cap portfolio and growth stocks comprised the remaining 54%. Below is an overview of the split between value and growth in the strategy over the long term.

When we put our collection of names together in the large cap portfolio we always find it interesting to look at some key characteristics at the portfolio level. As you can see from the below table, the large cap portfolio is trading at about a 35% discount to the market on a free cash flow basis as we are clearly not paying a premium for good cash flow. Additionally, we continue to be confident that our names will deliver earnings growth of around 7%, which is higher than the market at almost a similar P/E multiple.

Source: Factset, J.P. Morgan Asset Management. Data as of 30th June 2020.

1 Includes negatives

Market Outlook

While we believe the economy will recover, it will first need time to heal, and hence we remain balanced and continue to monitor incremental risks that could represent headwinds for U.S. stocks. Through the volatility, we continue to increase our exposure to quality, focus on high conviction stocks, and take advantage of market dislocations for compelling stock selection opportunities.

We continue to focus on the fundamentals of the economy and on company earnings. Starting with profits, our current research suggests that profit growth could be around -23% for 2020, however, this figure has been trending upwards in recent months. Moreover, we do expect to have a strong recovery in 2021, and our current estimates are for earnings growth of +30% in 2021. While subject to revision, this forecast reflects our expectations for a very weak year yet ultimate recovery in the underlying economy and includes our best analysis of earnings expectations. Unemployment and other uncertainties, such as trade, fiscal stimulus, and the US election, will be integral to investor sentiment moving forward.

Timothy Parton

Jonathan Simon

Investment Managers 12th August 2020

INTERIM MANAGEMENT REPORT

The Company is required to make the following disclosures in its half year report.

Principal and Emerging Risks and Uncertainties

The principal and emerging risks and uncertainties faced by the Company fall into the following broad categories: investment and strategy; market; accounting, legal and regulatory; loss of investment team or Investment Managers; operational, including cyber-crime; financial; political and economic; share price relative to Net Asset Value ('NAV') per share; Climate Change and Global Pandemic. Information on each of these areas is given in the Business Review within the Annual Report and Financial Statements for the year ended 31st December 2019.

Related Parties Transactions

During the first six months of the current financial year, no transactions with related parties have taken place which have materially affected the financial position or the performance of the Company.

Going Concern

The Directors believe, having considered the Company's investment objectives, risk management policies, capital management policies and procedures, nature of the portfolio and expenditure projections, that the Company has adequate resources, an appropriate financial structure and suitable management arrangements in place to continue in operational existence for the foreseeable future and, more specifically, that there are no material uncertainties pertaining to the Company that would prevent its ability to continue in such operation existence for at least twelve months from the date of the approval of this half yearly financial report. In reaching that view, the Directors have considered the impact of the current Covid-19 pandemic on the Company's financial and operational position. For these reasons, they consider there is reasonable evidence to continue to adopt the going concern basis in preparing the accounts.

Directors' Responsibilities

The Board of Directors confirms that, to the best of its knowledge:

(i) the condensed set of financial statements contained within the half year financial report has been prepared in accordance with FRS 104 'Interim Financial Reporting' and gives a true and fair view of the state of affairs of the Company, and of the assets, liabilities, financial position and net return of the Company as at 30th June 2020 as required by the UK Listing Authority Disclosure and Transparency Rules 4.2.4R; and

(ii) the interim management report includes a fair review of the information required by 4.2.7R and 4.2.8R of the UK Listing Authority Disclosure and Transparency Rules.

In order to provide these confirmations, and in preparing these financial statements, the Directors are required to:

• select suitable accounting policies and then apply them consistently;

• make judgements and accounting estimates that are reasonable and prudent;

• state whether applicable UK Accounting Standards have been followed, subject to any material departures disclosed and explained in the financial statements; and

• prepare the financial statements on the going concern basis unless it is inappropriate to presume that the Company will continue in business;

and the Directors confirm that they have done so.

For and on behalf of the Board

Dr Kevin Carter

Chair 12th August 2020

STATEMENT OF COMPREHENSIVE INCOME

FOR THE SIX MONTHS ENDED 30TH JUNE 2020

1 Management fee for the year ended 31st December 2019 was reduced by £169,000 (£34,000 allocated to revenue, £135,000 allocated to capital) due to the reimbursement of transaction costs. This was in relation to the transition of the portfolio following the change in investment policy.



STATEMENT OF CHANGES IN EQUITY

FOR THE SIX MONTHS ENDED 30TH JUNE 2020

1 These reserves form the distributable reserves of the Company and may be used to fund distributions to investors.

STATEMENT OF FINANCIAL POSITION

AT 30TH JUNE 2020

STATEMENT OF CASH FLOWS

FOR THE SIX MONTHS ENDED 30TH JUNE 2020

1 The unrealised exchange gain/(loss) on the JPMorgan US Dollar Liquidity Fund in the comparative column has been moved from the initial 'Net cash outflow from operations' total to be disclosed separately as the 'unrealised gain/(loss) on foreign currency cash and cash equivalents'.

NOTES TO THE FINANCIAL STATEMENTS

FOR THE SIX MONTHS ENDED 30TH JUNE 2020

1. Financial statements

The information contained within the financial statements in this half year report has not been audited or reviewed by the Company's auditors.

The figures and financial information for the year ended 31st December 2019 are extracted from the latest published financial statements of the Company and do not constitute statutory accounts for that year. Those financial statements have been delivered to the Registrar of Companies, including the report of the auditors which was unqualified and did not contain a statement under either section 498(2) or 498(3) of the Companies Act 2006.

2. Accounting policies

The financial statements have been prepared in accordance with the Companies Act 2006, FRS 102 'The Financial Reporting Standard applicable in the UK and Republic of Ireland' of the United Kingdom Generally Accepted Accounting Practice ('UK GAAP') and with the Statement of Recommended Practice 'Financial Statements of Investment Trust Companies and Venture Capital Trusts' (the revised 'SORP') issued by the Association of Investment Companies in October 2019.

FRS 104, 'Interim Financial Reporting', issued by the Financial Reporting Council ('FRC') in March 2015 has been applied in preparing this condensed set of financial statements for the six months ended 30th June 2020.

All of the Company's operations are of a continuing nature.

The accounting policies applied to this condensed set of financial statements are consistent with those applied in the financial statements for the year ended 31st December 2019.

3. Return per share

4. Dividends paid

All the dividends paid in the period/year have been funded from the Revenue Reserve.

5. Net asset value per share

For further information, please contact:

Priyanka Vijay Anand

For and on behalf of

JPMorgan Funds Limited, Secretary

020 7742 4000

The information contained within this announcement is deemed by the Company to constitute inside information as stipulated under the Market Abuse Regulations (EU) No. 596/2014. Upon the publication of this announcement via Regulatory Information Service this inside information is now considered to be in the public domain.

ENDS

A copy of the Half Year Report has been submitted to the National Storage Mechanism and will shortly be available for inspection at https://data.fca.org.uk/#/nsm/nationalstoragemechanism.

The Half Year Report will also shortly be available on the Company's website at www.jpmamerican.co.uk where up to date information on the Company, including daily NAV and share prices, factsheets and portfolio information can also be found.