Jpmorgan Global Regulatory News (JARA)

LONDON STOCK EXCHANGE ANNOUNCEMENT

 JPMORGAN GLOBAL CORE REAL ASSETS LIMITED

 UNAUDITED HALF YEAR RESULTS FOR THE SIX MONTHS ENDED 31ST AUGUST 2022

Legal Entity Identifier: 549300D8JHZTH6GI8F97

Information disclosed in accordance with the DTR 4.2.2

CHAIRMAN'S STATEMENT

Introduction

I am pleased to present the interim report for JPMorgan Global Core Real Assets Limited (the 'Company', or 'JARA') for the six months ended 31st August 2022.

This has been an encouraging period for JARA. The Company recorded a total return on net assets of +15.9% over the six months, reflecting a period of positive performance in our underlying holdings, while also benefitting from the significant strengthening of the US dollar versus sterling; currency movements contributed +11.8% to returns. When combined with a narrowing of the discount to our net asset value, the result is a price total return for shareholders of +29.2%, the discount having tightened from 10.8% to 0.7% over the same period. The Investment Managers' Report reviews the Company's performance and gives a detailed commentary on the investment strategy and portfolio construction, and their outlook for the underlying strategies.

Objectives and Features

Over the period economic activity around the world continued to recover from the COVID induced difficulties seen in the previous two years, but a tight labour market, loose monetary policy and supply chain woes saw inflation take hold in most economies. In addition, the invasion of Ukraine by Russia at the end of February 2022 ignited the most serious war in Europe in 75 years, with major ramifications for energy markets and commodity prices; at the time of writing there is no end in sight to this conflict.

The immediate domestic problem for western economies is inflation. The US Federal Reserve, the Bank of England and the European Central Bank have all increased interest rates and even after the latest round of rate hikes may well push them further by the end of 2022. The expectation is that the US, especially, is resolute in its determination to tighten monetary conditions and that equity markets, which have in general been soft in the past six months, may see some further collateral damage from this aggressive stance.

Happily, JARA has to a large extent been designed to cope well with the financial environment we face today, where so many sectors and asset classes are simultaneously affected by both macro and policy factors. As our name suggests, we invest around the world in core real assets of the type which are needed and paid for, come rain or shine. Our Investment Managers have achieved diversity on both a sectoral basis and across a number of developed economies, an approach which is proving to be reassuringly resilient during the challenging investment climate arising from conflict, inflation and the after-effects of the most disruptive pandemic for a century.

Capital Deployment and Allocation

The portfolio has been fully invested since Q1 2021, but the period saw a shift in the real estate composition, reducing the equity allocation and increasing JARA's exposure to real estate-linked debt. This resulted in some 7% of the portfolio being allocated to this debt class, which increased income, reduced volatility and is in the main exposed to floating rate loans which are benefitting from rising rates, helping to increase the income generated by JARA's portfolio.

Dividends

The Company declared two interim dividends of one penny each per Ordinary Share each, which were paid to shareholders on 31 May 2022 and 30 August 2022. A third dividend of a penny per Ordinary Share was declared after the period end and will be paid to shareholders on 29th November 2022.

Share Issuance and Capital Raising

In the six-month review period, the Company took advantage of investor demand to issue an additional 2 million shares, raising some £2.3 million of proceeds. This issuance reflects the Board's assessment of the benefits that come from additional share issuance, the new shares being issued at a premium to NAV to compensate existing shareholders for any possible dilution of returns that can arise when new capital is waiting to be deployed. The Board maintains its view that periodic issuance of new shares at a modest premium when client demand and market opportunities arise is a sound way to grow JARA.

Share Price and Interest Rates

JARA's discount moved from 10.8% at the start of the period to 0.7% at the end with an average of 0.5% over the six month period. This, however, masks the Company trading at a premium for a considerable portion of the period and opportunistically being able to issue new shares at a premium to NAV. The change from quarterly to monthly NAV disclosure served to provide investors with an enhanced degree of information and appeared to result in a more stable share price. Post period end, concerns over rising interest rates and therefore increasing risk free rates hit JARA's price, a similar impact was seen for most of the listed alternative asset funds. JARA's core nature and diversification across different interest rate environments via its global portfolio, should insulate it from a large portion of asset and interest rate specific risk. Over time, the portfolio income should increase as contractual revenue increases and natural inflation led price rises benefit the Company.

Outlook

JARA has now been in business for three years and, when launched in September 2019, we had no notion of the storms that lay just around the corner. These started with COVID, which caused us multiple problems as discussed in previous reports, and we now face the interlinked challenges of inflation, energy shortages and war. In the face of all of these your Company is proving to be remarkably resilient, thanks both to the nature of its underlying assets and to the considerable investment diversity which has been achieved by our Investment Managers.

This is an opportune moment at which to remind ourselves of what JARA offers to its owners. We invest conservatively in pools of assets run internationally by arms of JPMorgan, designed to generate in aggregate an income stream of some 4% per annum, while at the same time providing a degree of capital growth in real terms. With a return to shareholders over the past six months of some 29%, including two interim dividends, we have comfortably met that objective during the latest period, but it is perhaps more relevant to look at our record since launch, where our total shareholder return to 31st August 2022 stands at an annualised rate with dividends reinvested of +6.2%.

UK investors, in particular, face a challenging outlook, with sterling under pressure, the political gyrations of its elected leaders undermining the confidence of international capital providers and with a role for the British economy in a post-Brexit world yet to be fully defined. In this context JARA presents a compelling investment proposition and your Board takes this opportunity to reiterate its confidence in the investment philosophy pursued by JARA and its Investment Managers.

John Scott

Chairman 29th November 2022

INVESTMENT MANAGERS' REPORT

Review of Markets

The six months to 31st August 2022 was a difficult period with a rotation from a relatively positive outlook at the beginning of the period to markets confronting extensive challenges on a number of fronts. One of the primary challenges has been inflation which was initially stoked by excess savings and stimulus from the COVID pandemic, then materially worsened by the Russian invasion of Ukraine and the significant disruption to energy and commodity markets. The realisation that inflation would remain higher, and persist for longer, than Central Bank targets, means a squeeze on consumers from higher prices and elevated borrowing costs as Central Banks have rapidly increased interest rates. This resulted in a very difficult six months for equities and, to make matters worse, government bonds have also been hit so far this year, with falling prices and rapidly rising yields failing to provide the protection that investors usually seek during periods of such volatility.

Even as interest rates have risen, there are expectations for further increases later this year, although the pace of the increase is likely to be less steep than originally thought. Inflationary pressures remain the primary driver for these expectations, with inflation up to 8-10% across Europe and the U.S. and the UK seeing even higher rates. A good proportion of the increase in prices has been due to changes in energy and commodity markets. The U.S. has provided some mitigation to this through an increase in crude oil production and the release of strategic reserves, but unfortunately the same levers are not available to the U.K. and Europe.

On entering a downturn, eyes naturally shift to the U.S. housing market where the fixed rate for mortgages has already risen from below 3% to above 6%. However, while the number of housing transactions, and the associated economic activity, will likely continue to slow, it appears improbable that we will see a repeat of the 2008 housing-led financial crisis. This is because 95% of American mortgages today are on long-term fixed rates, compared with only 80% in 2007. As a result, there should be fewer forced sellers as a result of interest rate rises. There has also been much less sub-prime lending, and the banks are now better capitalised, which means they are better able to withstand loan losses that might be seen in a recession.

On a more positive note, the West has adapted well to 'living with Covid'. Less so, however, in China, with a smaller degree of infection-induced immunity and lower vaccine take-up among the elderly, meaning that various forms of restrictions continue to be imposed by the Chinese Government in a continuing attempt the quash the virus. Given that China accounts for between a third and a half of all global growth, these restrictions have wide economic consequences, including an impact on the transportation market.

Our view is that fiscal support and more gradual central bank tightening will help us avoid a severe global downturn. With major markets having already experienced double-digit declines, our central scenario does not point to significant further downside for assets. But this is a time for forecasters to be humble in their convictions; understanding the post-pandemic economy and unprecedented policy response further complicates the forecasting process. As investors, this translates into a need for well diversified, balanced portfolios and, very possibly, increased use of non-public market diversifiers such a real assets as a way to ensure robust portfolio outcomes.

Portfolio Review

Portfolio Review and Positioning

The first six months of this financial year truly represents JARA's first full two quarters of being fully invested. Over the period, the Company's net asset value ('NAV) total return in sterling terms was +15.9%, this return being inclusive of two dividends of one penny per share. The annualised income based on the latest NAV is 3.7% and 4.0% on initial issue price. This strong positive NAV return aligns with JARA's assets remaining resilient throughout the period despite broader volatility, albeit the return in sterling was helped by a strong US dollar. JARA's real estate, infrastructure and transportation allocations were all positive contributors to the total return as shown in the full Half Year Report.

Weighted contribution to total NAV performance per sleeve

Please see page 15 of the Half Year Report for the weighted contribution to total NAV performance per sleeve graph.

Sector Exposures

Please see page 15 of the Half Year Report for a table of the Company's sector exposures.

JARA continues to be focused on providing investors with access to a global portfolio of real assets. The Company currently has 55% of its portfolio in the U.S, 28% in Asia-Pacific, 15% in Europe and 2% in the U.K. With this global portfolio comes global currency exposure which has been a significant positive contributor to the portfolio in the past six months alongside the strong local currency asset returns.

One of the primary drivers of return over the previous six months has been real estate. U.S. real estate contributed +2.1% over the period and Asia-Pacific real estate contributed +0.9%. This return was driven by the strong momentum at the start of the year where extraordinary demand was fuelled by a tight labour market and strong consumer and supply constraints, all of which combined to allow for broad-based rental growth. Towards the end of the period, however, capitalisation and discount rates started to expand to adapt for the increased probability of a recession, as well as the more restricted availability of debt.

Given the changing environment we have been evolving our holdings, with a focus on sectors, geographies and assets where we see supply constraints and demand supported by longer-term structural trends. We remain particularly excited about sectors which are typically in underinvested and/or higher growth parts of the economy. This includes sub-sectors like truck terminals, outdoor storage, healthcare and biotechnology. Our 7% allocation to real estate debt can also provide some insulation from volatility in real estate equity. With 83% exposure to floating loan rate loans across the mezzanine debt portfolio, this provides, positive interest rate sensitivity and improved income as rates rise.

Infrastructure and Transportation markets remain resilient and well supported by investor demand. Over the six-month period, our Infrastructure and Transportation strategies contributed +0.6% and +0.9% to the portfolio, respectively. An area of outperformance has been power generation which, whilst we primarily are focused on fixed long-term contracts, has benefited from higher energy prices where we have more market-based exposure. We have also increased exposure to the utility sector. Whilst these assets have experienced some cost pressure recently, their ability to pass on higher costs over time via passthrough mechanisms in the long term contracts should allow them to benefit from an inflation linked return. Acquisitions in contracted power and utilities have meant a shift away from more 'GDP - sensitive' assets such as airports and seaports. As we enter a more uncertain period of the economic cycle, we feel utilities will benefit from their strong cash-flow generation with lower sensitivity to the economic cycle.

Among other things, Russia's invasion of Ukraine has also provided further requirements for both Infrastructure and Transportation. Both continue to benefit from the move towards a more energy efficient society, and are also going to play a key role in enabling economies to secure greater energy independence. As a result of this, we also see opportunities particularly in natural gas - both in strategically located storage facilities and in liquid natural gas carriers, where we continue to invest.

The Company's listed real asset allocation was a negative contributor of -0.7%. As a reminder, this allocation is made up of two distinct strategies: U.S. all-tranche REITs and an allocation more broadly across a variety of other listed real assets. The benefit of having an allocation to listed real assets within the portfolio is both as a source of liquidity - giving more flexibility around asset allocation - and a further diversifier in returns and sectoral exposure. This allocation was, however, impacted by the broader listed market sell-off during the period.

Other Portfolio metrics/exposures

Please refer to the Company's Half Year Report & Financial Statements for various graphics highlighting other portfolio metrics, exposures and key portfolio themes.

Investment Managers

J.P. Morgan Asset Management, Inc.

Security Capital Research & Management Inc. and J.P. Morgan Alternative Asset Management Inc.

29th November 2022

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 management and performance, operational, regulatory, environmental, global and pandemics. Information on each of these areas is given in the Company's Strategic Report within the Annual Report and Financial Statements for the year ended 28th February 2022.

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 during the period.

Going Concern

The Directors believe that having considered the Company's objective, risk management policies, capital management policies and procedures, the nature of the portfolio and expenditure projections, the Company has adequate resources, an appropriate financial structure and suitable management arrangements in place to continue in operational existence for a period of at least 12 months from the date of approval of this Half Year Report. They have not identified any material uncertainties to the Company's ability to continue to do so over a period of at least 12 months from the date of approval of this Half Year Report. This conclusion also takes into account the Board's assessment of the risks arising from the ongoing COVID-19 pandemic and recent market uncertainty, which has now been exacerbated by Russia's invasion of Ukraine on the current and future operations of the Company.

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 Report has been prepared in accordance with FRS104 'Interim Financial Reporting' and gives a true and fair view of the assets, liabilities, financial position and net return of the Company as required by the Disclosure Guidance and Transparency Rules ('DTR') 4.2.4R; and

(ii) the interim management report includes a fair review of the information required by DTR 4.2.7R and 4.2.8R.

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

John Scott

Chairman 29th November 2022

STATEMENT OF COMPREHENSIVE INCOME

For the six months ended 31st August 2022

* For the year ended 28th February 2022 the indirect (non-cash) management fees incurred on the Private Collective Investment Schemes were presented through the Statement of Comprehensive Income together with the direct management fees. For consistency the comparative figures to 31st August 2021 have been updated to reflect this new presentation.

The Company does not have any income or expense that is not included in the net return for the period/year. Accordingly, the 'Net return for the period/year, is also the 'Total comprehensive income' for the period/year, as defined in IAS1 (revised).

All Items in the above statement derive from continuing operations. No operations were acquired or discontinued in the period/year.

STATEMENT OF CHANGES IN EQUITY

For the six months ended 31st August 2022

STATEMENT OF FINANCIAL POSITION

At 31st August 2022

STATEMENT OF CASH FLOWS

For the six months ended 31st August 2022

1 Cash and cash equivalents includes liquidity funds.

* For the year ended 28th February 2022 the indirect (non-cash) management fees incurred on the Private Collective Investment Schemes were presented through the Statement of Comprehensive Income together with the direct management fees. For consistency the comparative figures to 31st August 2021 have been updated to reflect this new presentation.

NOTES TO THE FINANCIAL STATEMENTS

For the six months ended 31st August 2022.

1. General information

The Company is a closed-ended investment company incorporated in accordance with the Companies (Guernsey) Law, 2008. Its registered office is at 1st Floor, Les Echelons Court, Les Echelons, South Esplanade, St Peter Port, Guernsey GY1 1AR.

The principal activity of the Company is investing in securities as set out in the Company's Objective and Investment Policy.

The Company was incorporated on 22nd February 2019. It was admitted to the premium listing category of the Official List of the Financial Conduct Authority and to trading on the Main Market and had its first day of trading on 24th September 2019.

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

Investment objective

The Company will seek to provide Shareholders with stable income and capital appreciation from exposure to a globally diversified portfolio of core real assets.

Investment policy

The Company will pursue its investment objective through diversified investment in private funds or accounts managed or advised by entities within J.P. Morgan Asset Management (together referred to as 'JPMAM'), the asset management business of JPMorgan Chase & Co. These JPMAM Products will comprise 'Private Funds', being private collective investment vehicles, and 'Managed Accounts', which will typically take the form of a custody account the assets in which are managed by a discretionary manager.

2. Accounting policies

The Company's financial statements have been prepared in accordance with International Financial Reporting Standards ('IFRS'), which comprise standards and interpretations approved by the International Accounting Standards Board ('IASB'), the IFRS Interpretations Committee and interpretations approved by the International Accounting Standards Committee ('IASC') that remain in effect and the Companies (Guernsey) Law, 2008.

These financial statements have been prepared on a going concern basis in accordance with IAS 1, applying the historical cost convention, except for the measurement of financial assets including derivative financial instruments designated as held at fair value through profit or loss ('FVTPL') that have been measured at fair value.

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 28th February 2022.

3. Return per share

4. Dividends paid

A third interim dividend of one penny per share, amounting to £2,194,080 has been declared payable on 29th November 2022 in respect of the year ending 28th February 2023.

5. Net asset value per share

6. Disclosures regarding financial instruments measured at fair value

The disclosures required by the IFRS 13: 'Fair Value Measurement' are given below. The Company's financial instruments within the scope of IFRS 13 that are held at fair value comprise its investment portfolio and derivative contracts.

The investments are categorised into a hierarchy consisting of the following three levels:

Level 1 - valued using unadjusted quoted prices in active markets for identical assets and liabilities.

Level 2 - valued by reference to valuation techniques using other observable inputs not included within Level 1.

Level 3 - valued by reference to valuation techniques using unobservable inputs.

Categorisation within the hierarchy has been determined on the basis of the lowest level input that is significant to the fair value measurement of the relevant asset.

The recognition and measurement policies for financial instruments measured at fair value are consistent with those disclosed in the last annual financial statements.

The following tables set out the fair value measurements using the IFRS 13 hierarchy at the relevant period end:

1 Consists of the Private Collective Investment Schemes: Infrastructure Investments Fund UK 1 LP, Strategy Property Fund FIV5 (Lux) SCSp, Strategic Property Fund Asia SCSp, Global Transport Income Fund Feeder Partnership SCSp and U.S. Real Estate Mezzanine Debt Fund Feeder (Lux) SCSp.

2 Presented under Cash and cash equivalents in Statement of Financial Position.

There were no transfers between level 1, 2 or 3 during the period.

A reconciliation of the movement in level 3 financial instruments for the period ended 31st August 2022 is set out below.

1 In relation to Strategic Property Fund FIV5 (Lux) SCSp, Global Transport Income Fund Feeder Partnership SCSp, Strategic Property Fund Asia SCSp, Infrastructure Investments Fund UK 1 LP and U.S. Real Estate Mezzanine Debt Fund Feeder (Lux) SCSp.

2 Management fee in relation to Global Transport Income Fund Feeder Partnership SCSp, Strategic Property Fund Asia SCSp and Infrastructure Investments Fund UK 1 LP. For the six months ended 31st August 2022 also in relation to the U.S. Real Estate Mezzanine Debt Fund Feeder (Lux) SCSp.

The level 3 financial instruments consists of the Private Collective Investment Schemes: Infrastructure Investments Fund UK 1 LP, Strategic Property Fund FIV5 (Lux) SCSp, Strategic Property Fund Asia SCSp, Global Transport Income Fund Master Partnership and U.S. Real Estate Mezzanine Debt Fund Feeder (Lux) SCSp.

The valuation of the Private Collective Investment Schemes (Strategy Property Fund FIV5 (Lux) SCSp, Strategic Property Fund Asia SCSp, Infrastructure Investments Fund UK 1 LP, Global Transport Income Fund Feeder Partnership SCSp and U.S. Real Estate Mezzanine Debt Fund Feeder (Lux) SCSp) is based upon the latest available valuation provided by the unlisted private fund's manager, details are given in the table below. This element of the valuation is considered to be an unobservable input of the level 3 financial instrument valuation.

* As the year end of the Company (28th February) is non-coterminous with the dates of the valuations provided by the Managers of the Private Funds, the valuation per unit used includes an adjustment for the estimated income and capital returns for the period 1st January 2022 to 28th February 2022.

No such adjustment has been made for the valuations used in the 31st August 2022 valuation.

If the price per unit varied by 1%, this would result in a change of £1,935,000 (year ended 28th February 2022: £1,605,000) to the valuation of the level 3 financial instruments.

JPMORGAN FUNDS LIMITED

29th November 2022

For further information, please contact:

Emma Lamb

For and on behalf of

JPMorgan Funds Limited

020 7742 4000

Neither the contents of the Company's website nor the contents of any website accessible from hyperlinks on the Company's website (or any other website) is incorporated into, or forms part of, this announcement.

ENDS

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