MATE.L Regulatory News (MATE)

LONDON STOCK EXCHANGE ANNOUNCEMENT

JPMORGAN MULTI-ASSET GROWTH & INCOME PLC

UNAUDITED HALF YEAR RESULTS FOR THE SIX MONTHS ENDED31ST AUGUST 2022

CHAIRMAN'S STATEMENT

Introduction

The objective of the Company is to generate income and capital growth through a multi-asset strategy, while seeking to maintain lower levels of volatility than an equity portfolio. Our commitment to this objective is underpinned by the Company's progressive distribution policy (adopted on 1st March 2021) which aims to increase the dividend in line with the UK's annual Consumer Price Index from the initial distribution level of 4p per share per annum set at launch in 2018.

Portfolio Performance

During the half year to 31st August 2022, the Company recorded a negative total return of 6.4% on its opening net asset value, an underperformance of 9.4% compared to the Company's Reference Index. Although the underperformance is disappointing it should be noted that the Company's Reference Index is a total return of 6.0% per annum measured over a rolling five year period. Therefore, unlike a typical benchmark, it is not a relative index and is unaffected by the market turmoil experienced during this reporting period.

The Russian occupation of Ukraine in February 2022 and resulting tragic loss of life continues with no imminent end in sight. The conflict has dramatically increased the likelihood of a global recession due to elevated energy and commodity prices which have accelerated inflation levels and caused sharp increases in interest rates by many Central Banks. As a consequence, the decline in the Company's net asset value in the period mirror those of the wider market.

Towards the end of this reporting period and with the support of the Board, the Manager transitioned its global equity exposure away from higher yielding companies to those that they believe offer superior returns over the long term.

For further details regarding the management of the Company's portfolio please see the Investment Managers' Report.

Share Price Performance

The Company recorded a negative share price total return to shareholders of 4.1% during the half year to 31st August 2022. The decline in the share price was mitigated to some degree by the narrowing of the discount to net asset value at which the Company's shares trade. The discount commenced the period under review at -4.2% but moved steadily inwards to close on 31st August 2022 at -1.8%. The Company's share price on 7th October 2022 (the last practical date before printing this document), was 91.5p per share, with a discount to net asset valueof -2.5%

Discount Management

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. The Board utilises share 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. During this six month reporting period, the Board utilised their authority to buyback shares in the Company to narrow the discount substantially and bought back 1,975,000 shares at an average discount of-5.1%. The Company's shares traded at a premium during part of the six months ended 31st August 2022, which allowed the Company to reissue 100,000 shares from Treasury for a total consideration of £103,800.

Revenue and Distributions

During the half year to 31st August 2022, the Company's net loss after taxation was £5,442,000 (2021: net return after taxation: £7,593,000). In the period up to the filing of this half year report, the Board has declared two interim distributions of 1.1p per share in respect of the Company's year ending 28th February 2023. As detailed in my previous Chairman's Statement included in the Company's annual report and financial statements, the Board's expectation is to pay a total distribution of 4.4p per share for the year ending 28th February 2023. This would fulfil the Board's aim to help protect shareholders' distribution income from inflation. A further two distributions are expected to be paid to shareholders in February and May 2023 in respect of the year ending 28th February 2023.

Gearing

The Company may use gearing, in the form of borrowings and derivatives, to seek to enhance returns over the long term. During the period the Company had no bank loans/facilities or structured debt, but did use derivatives to enhance portfolio returns and for efficient portfolio management. The level of the Company's cash position at 31st August 2022 was 8.2%, (28th February 2022: 3.0%), reflecting an increase in the net cash position of the Company during this reporting period. See page 30 of the Company's half year report and financial statements for further details and definition of Gearing.

Outlook

There is little positive change in the outlook for the global economy since my previous Chairman's Statement. Concern over global growth remains with increased apprehension over further rate rises and potential earnings downgrades continuing to dominate and unsettle financial markets.

Nevertheless, the Board has confidence in the ability of the JPMorgan Multi-Asset team to navigate these difficult markets. The Investment Managers have the expertise and freedom to allocate across a wide range of asset classes to adapt to this challenging economic outlook. The investment trust structure facilitates a long-term investment outlook and the Company's progressive dividend policy should provide some reassurance to shareholders in the current inflationary environment.

Sarah MacAulay

Chairman 10th October 2022

INVESTMENT MANAGER'S REPORT

Introduction

In this report, we review the Company's investment performance for the six-month period to 31st August 2022, a period dominated by concerns around high inflation, central bank tightening and the economic implications of the Russian invasion of Ukraine. We examine how the Company's diversified portfolio has performed during this challenging market backdrop, how positioning has evolved through the period and our views looking forward in this uncertain market environment.

Setting the scene - our investment approach

We seek to achieve attractive returns by investing in a globally diversified portfolio that includes shares, bonds and other assets. Our aim is to construct an actively managed, balanced portfolio which is flexible with respect to asset class and geography. This flexibility allows us to take advantage of the best opportunities to deliver an attractive total return to our shareholders. We look to generate this through a research-based approach, positioning assets in line with our medium to long-term view of markets and leveraging the expertise of active managers in portfolio construction.

Market review: Declines and volatility across asset classes driven by stubbornly high inflation, war and hawkish central banks

After a sluggish start to the year, global equity markets rebounded in March. In the US, the Purchasing Manager's Index (PMI) signalled an uptick in private sector output growth and consumer confidence indicators also edged upward. Crude oil prices rallied, driven by the global supply concerns since Russia's invasion of Ukraine and the ensuing sanctions imposed on Russia. The US Federal Reserve (Fed) raised the target rate by 0.25% in March, its first increase since 2018 and the Bank of England (BoE), following a first hike in December and a second in February, further raised the policy rate by 0.25%.

Equity and fixed income markets came under pressure in April, as the war in Ukraine, lockdowns in China and the prospect of substantially tighter monetary policy continued to weigh on investor sentiment. In the US, headline inflation stood at 8.5%, its highest level since 1981 while the labour markets continued to be the bright spot, as unemployment rates across both the UK and euro area stood close to multi-decade lows.

Global equity markets continued to trade lower in May and June as high inflation, an overheating US economy and tightening monetary policy all continued to plague market sentiment. In the US, inflation displayed some signs of cooling but remained uncomfortably above the Fed's inflation target rate of 2.0%. Economic releases were mixed, with weak housing data in the US but continued strength in its manufacturing data. Outside of the US, inflation prints remained elevated in Canada, Europe and the UK, while in China promising news about a drop in Covid infections and the anticipation of the easing of lockdowns lead to improving growth expectations across emerging markets. In June economic releases continued to be weaker as headline manufacturing figures in the US and Europe, where price pressures were most pronounced, saw the biggest declines.

Markets staged a recovery in July as economic news in the US revealed business activity was still in expansionary territory, US job prints were strong and the reopening in China continued. Inflation remained stubbornly high with US inflation at 9.1%, its highest level in 41 years. In response, the Fed raised rates by 0.75%, although there were signs that growth had slowed. The ECB delivered its first rate hike in over a decade in July, the magnitude of which at 0.5%, surprised some market participants, while the Bank of Canada hiked by 1% and became the first major central bank to hike that aggressively in the current economic cycle.

The recovery in equity markets proved short-lived. Central banks' narrative around their commitment to bring inflation under control, despite the inherent risks to the growth outlook, led to further declines in equity and bond markets. However, economic data in general was slightly better than market expectations, as shown by economic surprise indices, and there were signs that global inflation pressures were starting to ease on the back of lower commodity prices. Eurozone second-quarter GDP surprised on the upside, but the data revealed important divergences among member states. The BoE raised its policy rate by a further 0.5% and warned of further tightening to contain inflation. In the US, even though the economy recorded two consecutive quarters of negative economic growth this year, US employment data was surprisingly strong. The Fed chair, Jerome Powell, remained committed to curbing inflation, as evidenced by the rather hawkish speech at Jackson Hole at the end of August.

How has the Company performed over the six-month period under review?

The Company delivered a negative return on net assets of 6.4% over the period, versus the Company's Reference Index which returned 3.0%. The portfolio's developed equity exposure provided the largest negative contribution to return but performed ahead of the broad equity market, while our infrastructure exposure generated positive returns. Our regional equity allocation decisions implemented via futures also provided a negative contribution to return. Over the period, our fixed income allocation failed to provide diversification benefits as the traditional correlation with equities broke down. Our government bond positions suffered declines through the period.

Portfolio review

We held significant equity exposure in March and reduced this by over 15% by the period end as markets continued to grapple with stubbornly high inflation, central bank tightening and a slowdown in global growth.

For equities, stock selection is undertaken by our in-house International Equity Group and we tilt regional positioning to reflect our latest views. We implement this via the use of index futures. This approach enables us to maintain positions in high conviction, stocks whilst adjusting regional exposure to reflect our favoured markets. We started reducing our European equity exposure in March as we believed continued geopolitical tensions would weigh on economic growth in the region. We also reduced our Japanese equity exposure owing to the cyclical nature of the market, disappointing macro data and supply chain issues. We added more defensive exposure through North American equities. From May we moderated our US small cap exposure as we believed the slowing growth environment could pose headwinds for more rate sensitive regions. We added to Chinese equities in June given the more positive economic outlook as COVID-related lockdowns eased and the interest rate environment remained benign.

Within fixed income, we significantly scaled back our high yield bond exposure as we looked to moderate overall portfolio risk. We exited our Emerging Market Debt position in May owing to an unfavourable outlook stemming from rising food and energy prices, and monetary policy tightening, which posed headwinds for the asset class. We also closed our convertible bond position in May given its high equity sensitivity and bias towards growth sectors such as technology and communications. We adjusted duration at the overall portfolio level through the period scaling back duration in June before adding back in August when we closed our short position in Japanese Government bonds as our conviction waned around the prospect of any meaningful adjustment to yield curve control policy this year. In June, we reduced our US and UK government bond exposure, given the hawkish stance of central banks amid persistently high inflation. In July we started adding duration to the back end of the curve via long term US government bonds, representing our view of a slowdown in growth.

Our bespoke equity portfolio has always favoured names with sustainable dividend yields trading at attractive valuations but, towards the end of the period, the portfolio was repositioned to a core, risk controlled, fundamental research strategy as we believe this style of investment will deliver stronger performance in the current market environment and as we look forward. The largest sector changes as a result were an increase in the portfolio position in media and industrial cyclical and a reduction of the portfolio position in consumer staples and pharma/medtech. At the end of August, the portfolio was most overweight the industrial cyclical, retail and automobiles sectors. It was most underweight consumer staples, basic industries and technology - semi & hardware. At a regional level, the portfolio was overweight Europe and underweight Canada and Pacific ex Japan.

Outlook: Global growth subtrend in 2023: risk of global recession in 2023 has risen

Looking ahead, the level of uncertainty about the outlook for the global economy remains elevated. Our expectation of an earnings downgrade cycle and weaker growth has increased. The key risks that we are monitoring continue to be the persistence of inflation, consumer weakness, central banks over-shooting as they continue to tighten and geopolitics - any of which could push the global economy more deeply into recession. We retain a cautious stance in the portfolio with equity levels close to historical lows, we are closely following bond markets and should growth concerns dominate markets in the coming months, will look for opportunities to add duration.

Katy Thorneycroft

Gareth Witcomb

Investment Managers 10th October 2022

INTERIM MANAGEMENT REPORT

The Company is required to make the following disclosures in its Half Year Report:

Principal Risks and Uncertainties

The principal risks and uncertainties faced by the Company fall into five broad categories: investment and strategy; accounting, legal and regulatory; corporate governance and shareholder relations; operational; and financial, including the risk of geopolitical events and global pandemics. Information on each of these areas is given in the Company's Strategic Report within the Annual Report and Financial Statements for the period 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, having considered the Company's investment objectives, risk management policies, capital management policies and procedures, nature of the portfolio and expenditure projections, and the economic and operational impact of Russia's invasion of Ukraine and Covid-19 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 relating to the Company that would prevent its ability to continue in operational existence for at least 12 months from the date of the approval of this interim financial report. 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 yearly financial 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 UK Listing Authority Disclosure 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

Sarah MacAulay

Chairman 10th October 2022

STATEMENT OF COMPREHENSIVE INCOME

For the six months ended 31st August 2022

STATEMENT OF CHANGES IN EQUITY

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

STATEMENT OF FINANCIAL POSITION

At 31st August 2022

STATEMENT OF CASH FLOWS

For the six months ended 31st August 2022

NOTES TO THE FINANCIAL STATEMENTS

For the six months ended 31st August 2022

1. Financial statements

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

The figures and financial information for the year ended 28th February 2022 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 and 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 'SORP') issued by the Association of Investment Companies in April 2021.

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 31st August 2022.

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/(loss) per share

4. Distributions paid

All distributions paid and declared in the period/year are and will be funded from the revenue, capital and special reserves.

A second interim dividend of 1.1p per share, amounting to £859,578 has been declared payable on 4th November 2022 in respect of the year ending 28th February 2023.

5. Net asset value per share

JPMORGAN FUNDS LIMITED

11th October 2022

For further information, please contact:

Paul Winship

For and on behalf of

JPMorgan Funds Limited

020 7742 4000

END

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 

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

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.