REG - JPMorgan Amer InvTst - Half-year Report
14/08/2025 07:00
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RNS Number : 2481V JPMorgan American IT PLC 14 August 2025
LONDON STOCK EXCHANGE ANNOUNCEMENT
JPMORGAN AMERICAN INVESTMENT TRUST PLC
HALF YEAR REPORT & FINANCIAL STATEMENTS
FOR THE SIX MONTHS ENDED 30TH JUNE 2025
Legal Entity Identifier: 549300QNAI4XRPEB4G65
Information disclosed in accordance with the DTR 4.2.2
Highlights:
· NAV total return of -4.6% compared with-3.0% for the S&P 500
Index (in sterling terms) (the 'Benchmark'). Share price return of -8.7%,
reflecting a widening of the Company's discount to NAV over the period.
· For the six years since the higher-conviction, best ideas
approach was adopted in June 2019, the Company outperformed the benchmark
index by +20.4, providing a NAV total return of +145.6%, compared with a
benchmark return of +125.2%, an annualised outperformance of +1.6% over the
six-year period.
· The Company is declaring a dividend of 2.75 pence per share
(2024: 2.75 pence) for the first six months of this year, which will be
payable on 6th October 2025 to shareholders on the register on 29th August
2025.
· During the reporting period, the Company repurchased a total of
3,403,340 shares, representing 1.9% of the Company's issued share capital
(excluding shares held in treasury) at an average discount of 3.1%. In the
same period, the Company issued 1,414,046 shares from Treasury at an average
premium to NAV of 0.8%.
The Chair, Robert Talbut, commented:
"The first six months of 2025 were marked by volatility in the US stock
market, driven by geopolitical tensions and fluctuating economic indicators.
Despite some initial optimism following the new US administration's economic
policy announcements, concerns over potential trade conflicts only added to
market uncertainty, which peaked in early April. Despite these challenges,
some companies managed to report positive earnings growth, which helped to
lift markets back to near record levels at the end of the period."
The Portfolio Managers, Felise Agranoff, Jack Caffrey, Eric Ghernati and
Graham Spence, commented:
"The first half of 2025 was a rollercoaster for US markets, with significant
ups and downs, driven by bouts of optimism and unexpected challenges. Despite
these concerns, markets demonstrated resilience and reached new all-time highs
by mid-year. "
"We are optimistic about the prospects for US equities for the rest of this
year and beyond. Market expectations have improved in recent months, with
investors no longer focused on worst-case scenarios."
CHAIR'S STATEMENT
Performance
The first six months of 2025 were marked by volatility in the US stock market,
driven by geopolitical tensions and fluctuating economic indicators. Despite
some initial optimism following the new US administration's economic policy
announcements, concerns over potential trade conflicts only added to market
uncertainty, which peaked in early April. The Federal Reserve's cautious
approach to interest rate adjustments given inflation remaining above target
also weighed on market sentiment. Despite these challenges, some companies
managed to report positive earnings growth, which helped to lift markets back
to near record levels at the end of the period.
Against this backdrop, GBP returns for both the Company and the Company's
index were negative reflecting the impact of the US dollar's weakest first
half performance since 1973. The Company's total return on net assets per
share over the six months to end June 2025 was -4.6% in GBP terms,
underperforming the -3.0% GBP total return on the Company's benchmark, the
S&P 500 Index, by -1.6 percentage points on a net asset value per share
('NAV') basis. The GBP return on share price was -8.7%, reflecting a
widening of the Company's discount to NAV over the period.
The large-cap component of the Company adopts a higher-conviction approach
combining the best ideas from the Manager's growth and value investment teams.
In the six years since this approach was adopted in June 2019, the Company has
outperformed the benchmark index by +20.4% in the subsequent 73 months through
to the end of June 2025, providing a NAV total return to shareholders of
+145.6%, compared with a benchmark return of +125.2%. This represents an
annualised outperformance of +1.6 percentage points over the six-year period.
The Portfolio
At the end of the review period, 94.5% of your Company's portfolio assets were
invested in US large cap stocks, in a high conviction portfolio of 39 stocks.
This represents a carefully curated selection of the Manager's best growth and
value investment ideas. The proportions of growth and value weightings can
vary between 60% and 40% in either direction and stood at 56% in growth stocks
and 44% in value names at the period end. The overall allocation to the small
cap portfolio was 5.5% at the end of the review period.
More details about performance attribution and portfolio activity during the
half-year can be found in the Investment Manager's report below, along with
their view on the outlook for US equity markets.
Investment Manager Succession
As previously reported, Jonathan Simon retired as the portfolio manager
responsible for value stocks in the Company's large cap portfolio on 3rd March
2025. The portfolio's value stocks are now managed by Jack Caffrey and Graham
Spence, while the growth stocks continue to be managed by Felise Agranoff and
Eric Ghernati.
There are no changes to the Company's investment process or investment
objective as a result of these changes.
Share Price and Premium/Discount
The Company's shares have traded at an average discount during the period
under review of 2.0% relative to NAV. The Company has continued to both buy
back and issue shares in line with the Board's longstanding position of buying
back shares when they stand at anything more than a small discount to NAV, and
issuing shares when they are trading at a premium to NAV at least sufficient
to cover the costs of issuance.
The Company bought into Treasury a total of 3,403,340 shares, or 1.9% of the
Company's issued share capital during the six months to end June 2025,
excluding shares held in treasury (30th June 2024: 0.8%). These shares were
purchased at an average discount to NAV of 3.1%, producing a modest accretion
to the NAV for continuing shareholders. The Company issued a total of
1,414,046 shares from treasury during the same period, at an average premium
to NAV of 0.8%.
Dividends
The Company is declaring a dividend of 2.75 pence per share (2024: 2.75 pence)
for the first six months of this year, which will be payable on 6th October
2025 to shareholders on the register on 29th August 2025. While capital growth
is the primary aim of the Company, the Board understands that dividend
receipts can be an important element of shareholder returns. The Board
continues to monitor the net income position of the Company and, in the
absence of unforeseen circumstances, aims to continue its progressive dividend
policy.
Gearing
The Company is able to deploy gearing, which over time is expected to enhance
performance provided that the cost of gearing is less than the performance
delivered by the Company's equity portfolio. The Board has set the current
tactical level of gearing at 5% of net assets, with a permitted range around
this level of plus or minus 5%, meaning that gearing can vary between 0% and
10%. During the period the Board decided to add additional gearing to the
portfolio, drawing down US$40 million from the revolving credit facility. In
total the tactical level of gearing of the Company increased from 2.8% at
year-end 2024 to 4.9% at the end of June. The overall effect of gearing during
the first half of the year was to add 50bp to the return of the Company's
portfolio.
The Board believes it is prudent for its gearing capacity to be funded from a
mix of sources, including short- and longer-term tenors, and fixed and
floating rate borrowings. The Company now has in place an £85 million
revolving credit facility (with an additional £15 million accordion) with
Industrial and Commercial Bank of China Limited, London Branch. This replaces
the £80 million revolving credit facility (with an additional £20 million
accordion) with Mizuho Bank Ltd that expired in early August 2025. It also has
in issue a combined total of US$100 million unsecured loan notes issued via
private placements, US$65 million of which are repayable in February 2031 and
carry a fixed interest rate of 2.55% per annum. The remaining US$35 million of
loan notes mature in October 2032 and carry a fixed interest rate of 2.32%.
Board
There have been no changes to the Board over the six-month review period. The
Board continues to carefully manage its succession planning and remains
committed to maintaining a diverse and experienced team to guide the Company's
strategic direction.
Stay Informed
The Company delivers email updates with regular news and views, as well as the
latest performance. If you have not already signed up to receive these
communications and you wish to do so, you can opt in via
https://web.gim.jpmorgan.com/emea_investment_trust_subscription/welcome?targetFund=JAM.
Outlook
It is customary when commentating upon financial markets to state that the
outlook remains uncertain. At present I would draw attention to the escalating
number of conflicts around the world, to the fracturing of politics and the
rise of more extreme parties in many countries, and to diminishing global
cooperation being replaced by fiercer competition between countries. In short,
it does appear that we really are in a period which is indeed very uncertain.
However, North American companies and their management teams have a long track
record of quickly adapting to whatever circumstances confront them, resulting
in improved profitability and earnings per share. In addition, US businesses
appear to adopt new technologies more quickly than others, driving
efficiencies within companies and hence sharpening their competitive edge
relative to their global competition. The Board has no reason to doubt that
these dynamics will not continue to prevail. The Manager remains confident
that it can still identify attractive investment opportunities throughout the
North American market and this fact combined with the continued dynamism of US
business gives the Board confidence that the Company should continue to
provide opportunities for attractive returns over the medium term.
Robert Talbut
Chair
13(th) August 2025
INVESTMENT MANAGER'S REPORT
Market Review
The first half of 2025 was a rollercoaster for US markets, with significant
ups and downs, driven by bouts of optimism and unexpected challenges. Despite
these concerns, markets demonstrated resilience and reached new all-time highs
by mid-year. The S&P 500 posted a +6.2% return in US dollar terms,
although it declined by -3.0% in sterling terms due to the US dollar's worst
first-half performance since 1973.
As 2025 started, markets were buoyed by expectations of pro-growth policies
from the new administration, which fuelled a surge in optimism. However,
worries about cracks in the AI growth narrative, the threat to economic
activity posed by US tariffs and geopolitical tensions soon emerged, adversely
impacting global markets, and causing a growth scare that culminated in a
pronounced market sell-off in April.
'Big Tech', particularly the so-called 'Magnificent 7', fell into bear market
territory, significantly contributing to the downturn. Meanwhile, Treasuries
rallied, although 10-year yields remained sensitive to fluctuations in the
economic data. Investors also began to fret about stagflation, as the
US Federal Reserve's economic projections indicated upward revisions in both
the unemployment rate and core inflation to 4.4% and 2.8%, respectively, by
the end of 2025.
Despite these setbacks, US equities showed resilience as the year progressed
with investor fears of worst-case scenarios diminishing. An easing in trade
tensions, combined with resilient employment and corporate earnings reports,
and persistently tame inflation data, helped restore investor confidence. The
S&P saw the fastest ever rebound from a drawdown of more than 15%,
although the recovery was not universal as only some members of the
Magnificent 7, Meta Platforms, Microsoft, and NVIDIA outperformed, while other
names lagged. As the sectors expected to be beneficiaries of AI broadened, the
industrials sector emerged as the top performer so far this year, rising by
12% in the review period, closely followed by communication services (+11%)
and financial stocks (+9%). Consumer discretionary was the worst-performing
sector, declining by 4%, and health care also ended in negative territory,
declining by 1%.
The S&P 500, which is predominantly large-cap stocks, outshone the
small-cap Russell 2000 Index, which experienced a -1.8% decline in US dollar
terms. In terms of style, both value and growth achieved comparable returns.
The two charts which are in the full Half Year Report of the Company
(available on the website) provide an overview of the returns of different
investment styles in the US market during the six-month period through the end
of June, as well as the sector performance of the S&P 500 during that
period.
Performance and Overall Asset Allocation
The Company's net asset value declined by 4.6% on a total return basis (in GBP
terms) in the first half of 2025, lagging the 3.0% drop in the S&P 500
Index. Both the large cap and small cap allocations detracted from relative
performance during the period, with the Company's small cap allocation
detracting the most. The overall allocation to the small cap portfolio was
maintained at less than 6% over the period and stood at 5.5% at the end of
June. Gearing positively impacted the portfolio performance, as shown in the
table.
We remain dedicated to owning high-quality businesses with durable competitive
advantages. Our concentrated bottom-up stock selection process has led to
several deviations from the benchmark at both the stock and sector levels. The
information technology sector remains our largest sectoral weighting in
absolute terms, although it is also our largest underweight. We have modestly
added to our exposure to selected software and semiconductor companies, where
we see strong or rising demand.
Notably, consumer discretionary is our largest sectoral overweight. During the
six-month review period, we increased our exposure by reintroducing Tesla.
Overall, within the sector, we strive to maintain a balanced exposure between
secular growth companies and those with less cyclicality and more defensive
business models, such as globally recognised brands, with capital-light
operations.
Financials represent the next largest sectoral overweight. Our strategy
remains diversified, prioritising names with strong operations and the ability
to adapt to evolving market dynamics. Capital One Financial is one example.
The sector's relative valuations are attractive, and we are particularly
interested in businesses with the potential to disrupt traditional payments
systems. We are also optimistic about companies focused on capital markets
activity, as these are being supported by robust trading volumes, sporadic
volatility and a potential easing in capital requirements by the new
administration. We continue to hold the same names in this sector as we did at
the start of the year.
Performance Attribution
For the six-month period ended 30th June 2025
% %
Contributions to total returns
Net asset value (debt at fair value) total return
in sterling terms(APM) -4.6
Benchmark total return (in sterling terms) -3.0
Excess return -1.6
Combined Portfolio return in US dollar terms(1) 4.7
Benchmark total return in US dollar terms 6.1
Combined Portfolio relative return in US dollar terms -1.4
Large & Small Cap Portfolio contribution(2):
Large Cap Portfolio in US dollar terms -0.6
Small Cap Portfolio in US dollar terms -0.8
Combined Portfolio relative return in US dollar terms -1.4
Contributions to return
Equity portfolio (ex-cash and gearing) in US dollar terms -1.9
Cash and gearing impact in US dollar terms(3) 0.5
Combined Portfolio relative return in US dollar terms -1.4
Effect of foreign currency translation(4) 0.1
Combined Portfolio relative return in sterling terms -1.3
Management fee and other expenses(5) -0.2
Finance costs(5) -0.1
Share buybacks and issuances(6) 0.1
Impact of fair valuation of debt(7) -0.1
Total excess return -1.6
Source: J.P. Morgan/Morningstar.
All figures are on a total return basis. Performance attribution analyses how
the Company achieved its recorded performance relative to its benchmark.
(1) The aggregated returns of both the Large Cap and Small Cap
portfolios.
(2) The split of returns by portfolio, relative to the benchmark. This
has been calculated using the average weighting of the Large Cap and Small Cap
portfolios over the period.
(3) Cash and gearing - measures the impact on returns of the principle
amount of borrowings or cash balances on the Company's relative performance.
(4) Effect of foreign currency translation - measures the impact of
currency exposure differences between the Company's portfolio and its
benchmark.
(5) Management fee, other expenses and finance costs - the payment of
fees, expenses and finance costs (interest paid on borrowings) reduces the
level of total assets, and therefore has a negative effect on relative
performance.
(6) Share buybacks and issuances - measures the combined effect of the
enhancement to net asset value per share from i) buying back the Company's
shares at a price which is less than the Company's net asset value per share
and ii) issuing shares at a price which is higher than the net asset value
per share.
(7) The impact of fair valuation is the effect of valuing the combined
US$100m private placements at fair value.
(APM) Alternative Performance Measure ('APM').
Large Cap Portfolio
The large cap portion of the portfolio, which accounts for over 90% of the
Company's assets, detracted from relative performance over the period under
review as our stock selection weighed on performance.
Our stock selection in the health care and consumer staples sectors detracted
the most from relative performance. Within the health care space our exposure
to UnitedHealth Group was the worst performer. UnitedHealth has long been
regarded as the leading managed care company, consistently enjoying a premium
valuation. Last year, it appeared to be operating significantly better than
its competitors in the Managed Care space. However, recent developments
suggest that efforts to boost growth have led to mispricing, resulting in
health care costs that are significantly higher than forecast. These issues
led to a notable reduction in earnings guidance, marking the first year of
expected earnings decline since 2010. A former CEO has returned to the helm,
and he has indicated plans to further enhance the company's management talent.
Given current related uncertainties, UnitedHealth's premium valuation may no
longer be justified, and while a turnaround is possible, the timing is
uncertain, so we exited our position.
Our performance in consumer staples was adversely impacted by our exposure to
Estee Lauder, a cosmetics company which has been facing earnings challenges,
including a decline in sales in key markets such as Asia and China. In
addition, there have been recent management changes and strategic
uncertainties, including the withdrawal of FY25 guidance and the announcement
of a significant dividend cut, aimed at providing more financial flexibility,
further exacerbated market apprehension. While the company has implemented a
plan to improve margins and drive future growth, we have concerns about
management's ability to execute, and exited our position.
At the security level, our underweight position in NVIDIA was one of the
more significant detractors during the period, as the company's share price
experienced a strong rally, outperforming the S&P 500. Although NVIDIA's
platform is in high demand and its software is robust, we believe the market
may not be taking full account of increasing competition, including from
Broadcom, another portfolio holding, which has developed a highly customisable
ASIC chip. We also have some concerns that market expectations about NVIDIA's
growth potential might be overdone, so we have maintained a below-index
weighting to this name.
While the large cap portfolio faced several detrimental influences, there were
plenty of bright spots, including strong stock selection in the information
technology (IT) and financial sectors. In the IT sector, our decision to
maintain an underweight position in Apple made a positive contribution to
performance. This stock faced downward pressure due to concerns about the
impact of US tariffs, and uncertainties regarding potential regulatory impact
on its services business. The company is also experiencing ongoing challenges
integrating AI into its products.
Capital One Financial, a provider of financial products and services, was a
top contributor in the financial space, thanks in part to positive investor
sentiment regarding the sector. The market is also positive about the benefits
of Capital One's acquisition of Discover Financial Services. This deal should
enhance Capital One's banking and payments platform, while also delivering
both cost savings and revenue growth. Furthermore, the company's management
team has a track record of successfully executing large investments, including
in the business's technological transformation and its national banking
strategy. This bodes well for future growth and we remain overweight this
name.
Another significant contributor during the period was our underweight position
in Tesla. We have previously owned this stock and know the company well. We
had closed our position in January 2024 as demand for electric vehicles (EV)
stalled. The stock has since faced pressure due to various investor concerns,
both real and perceived. We capitalised on the sell-off by reintroducing Tesla
to our portfolio. Although demand for EVs remains tentative, we are
increasingly confident in the company's autonomous driving technology, which
we believe is approaching commercial viability, and we see potential for
autonomous driving to enhance Tesla's brand perception and eventually reignite
demand for its vehicles. This transition is in its early stages, so the
portfolio remains underweight, but we anticipate that autonomous driving will
significantly improve Tesla's margins over time, and our long-term investment
horizon allows us to be patient while these expectations play out, especially
as we took the opportunity to re-purchase the stock at an attractive level.
Portfolio Activity
Over the period, the most significant portfolio shifts have occurred in the
health care space, as we exited three longstanding positions due to changing
fundamentals. In addition to the sale of UnitedHealth Group, already
discussed, we also closed positions in Regeneron Pharmaceuticals and Eli
Lilly. Regeneron Pharmaceuticals is currently navigating a tough commercial
landscape, including increasing competitive pressures on its flagship product,
Eylea, for the treatment of eye disease, which are raising doubts about the
company's ability to maintain its market leadership in this segment. In
addition, there are emerging concerns regarding the life cycle of Dupixent,
used in the treatment of severe inflammatory conditions, as well as
Regeneron's overall drug pipeline, which has not developed at a pace
sufficient to offset diminishing demand for Eylea and Dupixent. Eli Lilly's
stock dropped sharply following its latest earnings report on concerns over
pricing dynamics in the weight loss drugs market. In response to these
challenges, we sold our holdings in all three names. We added one new health
care name - Johnson & Johnson. This large cap pharmaceutical and medical
technology business trades at a discount to its peers, while offering a
premium dividend and attractive dividend yield, with higher returns on equity
and invested capital.
We also added exposure to industrials, with the addition of 3M, a tech
services conglomerate, where we have gained confidence in the company's
operational turnaround. Earlier this year, the incoming CEO highlighted new
and increasingly granular plans to reinvigorate growth and improve operating
performance. Additionally, 3M has strengthened its balance sheet and the
management of legal liabilities, to reduce risks. These developments
reinforced our view that 3M's recovery is proceeding well and looks set to
exceed market expectations both in timing and magnitude.
Value and growth exposure
As we have mentioned previously, the large cap portfolio is divided between
growth and value stocks, with the allocation allowed to vary between 60:40 and
40:60. At the end of the review period, growth stocks comprised some 56% of
the large cap portfolio, with the remaining 44% invested in value stocks. This
is coincidently close to the current growth/value split of the S&P 500
index.
The table below shows that at the end of June 2025, the large cap portfolio
was trading at a 17% discount to the market on a free cash flow basis, which
confirms that we are not paying a premium for good cash flow. Indeed, the
discount provides a comforting valuation cushion. The portfolio is expected to
deliver earnings growth of around 13% over the next 12 months, in line with
the market. However, both figures are based on consensus earnings, which may
be revised over time.
Characteristics Large Cap Portfolio S&P 500
Weighted Average Market Cap US$ 1,022.0 bn US$ 1,064.6 bn
Price/Earnings, 12-months forward(1) 22.9x 21.3x
Price/Free Cash Flow, last 12-months 21.9x 26.4x
Price to Book Value 4.3x 5.0x
EPS Growth, 12-months forward 12.7% 12.8%
Return on Equity, last 12-months 20.8% 25.4%
Dividend Yield, current 1.2% 1.2%
Predicted Beta 1.00 -
Predicted Tracking Error 2.72 -
Number of Holdings 39 500
Active Share 63% -
Source: Factset, J.P. Morgan Asset Management.
(1) Including negatives. Data as of 30th June 2025. The portfolio is
actively managed. Holdings, sector weights, allocations and leverage, as
applicable, are subject to change at the discretion of the investment manager
without notice.
A Glossary of Terms is provided on page 32 of the complete Half Year Report
(available on the website).
Small Cap Portfolio
As mentioned above, the small cap portfolio negatively impacted returns over
the review period, as it underperformed the S&P 500. The overall
allocation to the small cap portfolio was maintained at less than 6% over the
period and stood at 5.5% at the end of June. Small cap valuations continue to
look compelling relative to large caps following a prolonged period during
which large caps outperformed small caps. It feels as though the stage is
still set for a reversal, although timing is always hard to predict.
Outlook
We are optimistic about the prospects for US equities for the rest of this
year and beyond. Market expectations have improved in recent months, with
investors no longer focused on worst-case scenarios. And history suggests that
a strong first half of the year often leads to a solid second half. Since
2000, in the 11 instances where the S&P 500 rose by at least 5% in the
first half, it continued to rally in the second half, with full year gains
averaging more than 19%.
In addition, the economy is demonstrating resilience, although its growth
trajectory is flattening. Inflation may tick higher, due to labour market
pressures and higher tariffs, but is not expected to rise significantly. The
unemployment rate remains relatively stable, and consumer financial conditions
are manageable. This combination suggests a stable economic environment,
conducive to further, albeit modest, growth. Our confidence in the market's
potential is further underpinned by expectations of robust earnings growth -
our analysts predict S&P 500 earnings will increase by 8% in 2025 and 13%
in 2026.
While we are encouraged by these signs of improving market fundamentals, we
remain vigilant about potential risks that could spark volatility. These
include ongoing geopolitical tensions and continuing shifts in US trade,
regulatory, and fiscal policies.
Our focus on high-quality businesses with strong competitive advantages helps
to ensure stable returns during uncertain times and when market volatility
rises, we aim to capitalise on it by identifying and seizing selective
opportunities that align with our long-term investment goals. Our strategy is
to maintain a balanced approach, leveraging our insights and expertise to
navigate market complexities, while actively seeking opportunities for growth
and value creation. We are confident that this approach will continue to
reward shareholders with strong capital growth over time.
Felise Agranoff
Jack Caffrey
Eric Ghernati
Graham Spence
Portfolio Managers
13(th) August 2025
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 the
following broad categories:
Investment Strategy, Process and Performance
This includes risks such as Investment Strategy and Process, Investment Team,
Market Risk, Technological Change, Rating Volatility and Corporate Activity
Risk and Integration of ESG Factors into the Investment Process.
Regulatory, Compliance & Operational
This includes risks relating to Operational, Resilience, Controls and Security
along with Accounting, Legal and Regulatory risks.
Geopolitical and Other Exogenous Issues
This includes risks relating to Geopolitical, Artificial Intelligence, Climate
Change, Widespread Social and Economic Disruption along with Legislative and
Regulatory Changes.
Whilst the Board has not identified any new emerging risks at the time of
publication of this report, it has noted the continued heightened level and
evolving nature of the Geopolitical risks facing the Company and is monitoring
these accordingly.
Information on each of these risks is given in the Strategic Report within the
Annual Report and Financial Statements for the year ended 31st December 2024.
In the view of the Board, these principal risks and uncertainties are as much
applicable to the remaining six months of the financial year as they were to
the six months under review.
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
In accordance with The Financial Reporting Council's guidance on going concern
and liquidity risk, the Directors have undertaken a rigorous review of the
Company's ability to continue as a going concern. The Board has, in
particular, considered the impact of market volatility from the ongoing
conflicts between Ukraine and Russia and in the Middle East, and does not
believe the Company's going concern status is affected. The Company's assets,
the vast majority of which are investments in quoted securities which are
readily realisable, exceed its liabilities significantly under all stress test
scenarios reviewed by the Board. Gearing levels and compliance with borrowing
covenants are reviewed by the Board on a regular basis. Furthermore, the
Directors are satisfied that the Company's key third party service providers
have in place appropriate business continuity plans to ensure their
operational resilience and the performance of these service providers is
reviewed at least annually by the Management Engagement Committee.
Accordingly, having assessed the principal and emerging risks and other
matters, the Directors believe that there are no material uncertainties
pertaining to the Company that would prevent its ability to continue in such
operational existence for at least 12 months from the date of the approval of
this half yearly financial report.
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 2025 as required by the UK Listing Authority
Disclosure Guidance and Transparency Rules 4.2.4R; and
(ii) the interim management report includes a fair review of the
information required by Rules 4.2.7R and 4.2.8R of the UK Listing Authority
Disclosure Guidance 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
Robert Talbut
Chair
13(th) August 2025
CONDENSED STATEMENT OF COMPREHENSIVE INCOME
(Unaudited) (Unaudited) (Audited)
Six months ended Six months ended Year ended
30th June 2025 30th June 2024 31st December 2024
Revenue Capital Total Revenue Capital Total Revenue Capital Total
£'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000
(Loss)/gains on investments
held at fair value through
profit or loss - (108,492) (108,492) - 290,667 290,667 - 459,406 459,406
Net foreign currency
gains/(losses) - 6,206 6,206 - (798) (798) - (743) (743)
Income from investments 12,473 5 12,478 11,281 - 11,281 23,579 55 23,634
Interest receivable and similar
income 531 - 531 750 - 750 1,352 - 1,352
Gross return/(loss) 13,004 (102,281) (89,277) 12,031 289,869 301,900 24,931 458,718 483,649
Management fee (551) (2,203) (2,754) (499) (1,995) (2,494) (1,041) (4,164) (5,205)
Other administrative expenses (448) - (448) (619) - (619) (1,139) - (1,139)
Net return/(loss) before finance
costs and taxation 12,005 (104,484) (92,479) 10,913 287,874 298,787 22,751 454,554 477,305
Finance costs (309) (1,232) (1,541) (236) (939) (1,175) (494) (1,970) (2,464)
Net return/(loss) before taxation 11,696 (105,716) (94,020) 10,677 286,935 297,612 22,257 452,584 474,841
Taxation (1,843) (7) (1,850) (1,212) (70) (1,282) (3,024) - (3,024)
Net return/(loss) after taxation 9,853 (105,723) (95,870) 9,465 286,865 296,330 19,233 452,584 471,817
Return/(loss) per share (note 3) 5.50p (59.01)p (53.51)p 5.18p 156.93p 162.11p 10.59p 249.22p 259.81p
The interim dividend of 2.75p (2024:2.75p) per share has been declared in
respect of the six months ended 30th June 2025, amounting to £4,870,000
(2024: £5,003,000).
All revenue and capital items in the above statement derive from continuing
operations. The return/(loss) per share represents the profit/(loss) per share
for the period and also the total comprehensive income per share.
The 'Total' column of this statement is the profit and loss account of the
Company and the 'Revenue' and 'Capital' columns represent supplementary
information prepared under guidance issued by the Association of Investment
Companies.
CONDENSED STATEMENT OF CHANGES IN EQUITY
Called up Capital
share Share redemption Capital Revenue
capital premium reserve reserves(1) reserve(1) Total
£'000 £'000 £'000 £'000 £'000 £'000
Six months ended 30th June 2025 (Unaudited)
At 31st December 2024 14,082 159,821 8,151 1,769,497 36,294 1,987,845
Repurchase of shares into Treasury - - - (33,439) - (33,439)
Issue of shares from Treasury - 9,925 - 6,550 - 16,475
Net (loss)/return after taxation - - - (105,723) 9,853 (95,870)
Dividends paid in the period (note 4) - - - - (14,768) (14,768)
At 30th June 2025 14,082 169,746 8,151 1,636,885 31,379 1,860,243
Six months ended 30th June 2024 (Unaudited)
At 31st December 2023 14,082 151,850 8,151 1,358,329 31,587 1,563,999
Repurchase of shares into Treasury - - - (13,910) - (13,910)
Issue of shares from Treasury - 4,443 - 3,715 - 8,158
Proceeds from share forfeiture(2) - - - 731 - 731
Proceeds from forfeiture of unclaimed dividends(2) (note 4) - - - - 71 71
Net return after taxation - - - 286,865 9,465 296,330
Dividends paid in the period (note 4) - - - - (9,595) (9,595)
At 30th June 2024 14,082 156,293 8,151 1,635,730 31,528 1,845,784
Year ended 31st December 2024 (Audited)
At 31st December 2023 14,082 151,850 8,151 1,358,329 31,587 1,563,999
Repurchase of shares into Treasury - - - (48,069) - (48,069)
Issue of shares from Treasury - 7,971 - 5,922 - 13,893
Proceeds from share forfeiture(2) - - - 731 - 731
Proceeds from forfeiture of unclaimed dividends(2) (note 4) - - - - 71 71
Net return after taxation - - - 452,584 19,233 471,817
Dividends paid in the year (note 4) - - - - (14,597) (14,597)
At 31st December 2024 14,082 159,821 8,151 1,769,497 36,294 1,987,845
( )
(1) These reserves form the distributable reserves of the Company and
may be used to fund distributions to investors.
(2) During 2024, the Company undertook an Asset Reunification Program
to reunite inactive shareholders with their shares and unclaimed dividends.
In accordance with the Company's Articles of Association, the Company
exercised its right to forfeit the shares belonging to untraced shareholders
for a period of 12 years or more. These shares were sold in the open market
and the net proceeds returned to the Company. In addition, any unclaimed
dividends older than 12 years from the date of payment of such dividend were
forfeited and returned to the Company.
CONDENSED STATEMENT OF FINANCIAL POSITION
(Unaudited) (Unaudited) (Audited)
At At At
30th June 30th June 31st December
2025 2024 2024
£'000 £'000 £'000
Fixed assets
Investments held at fair value through profit or loss 1,951,943 1,925,506 2,042,755
Current assets
Debtors 582 4,245 600
Current asset investments(1) 10,117 15,423 24,926
Cash at bank(1) 430 12 112
11,129 19,680 25,638
Current liabilities
Creditors: amounts falling due within one year (30,083) (4,760) (971)
Net current (liabilities)/assets (18,954) 14,920 24,667
Total assets less current liabilities 1,932,989 1,940,426 2,067,422
Creditors: amounts falling due after more than one year (72,746) (94,642) (79,577)
Net assets 1,860,243 1,845,784 1,987,845
Capital and reserves
Called up share capital 14,082 14,082 14,082
Share premium 169,746 156,293 159,821
Capital redemption reserve 8,151 8,151 8,151
Capital reserves 1,636,885 1,635,730 1,769,497
Revenue reserve 31,379 31,528 36,294
Total shareholders' funds 1,860,243 1,845,784 1,987,845
Net asset value per share (note 5) 1,050.4p 1,014.2p 1,109.9p
( )
(1) As at 30th June 2024, the 'Cash and cash equivalents' line item in
the Statement of Financial Position has been revised to 'Cash at bank' and
'Current asset investments'. This revision separately reports the £15,423,000
investment in the JPMorgan USD Liquidity Fund as 'Current asset investments'
and £12,000 as 'Cash at bank', in accordance with the statutory format
required by the Companies Act 2006. This adjustment does not affect any other
line items in the Statement of Financial Position or the total current assets.
CONDENSED STATEMENT OF CASH FLOWS
(Unaudited) (Unaudited) (Audited)
Six months Six months Year
ended ended ended
30th June 30th June 31st December
2025 2024 2024
£'000 £'000 £'000
Cash flows from operating activities
Net (loss)/return before finance costs and taxation (92,479) 298,787 477,305
Adjustment for:
Net losses/(gains) on investments held at fair value through
profit or loss 108,492 (290,667) (459,406)
Net foreign currency exchange (gains)/losses (6,206) 798 743
Dividend income (12,478) (11,281) (23,634)
Interest income (531) (750) (1,352)
Scrip dividends received as income (5) - -
Realised foreign currency exchange losses on transactions (320) (337) (292)
Realised foreign currency exchange losses on JPMorgan
USD Liquidity Fund (1,335) (335) (623)
(Increase)/decrease in accrued income and other debtors (47) - 31
(Decrease)/increase in accrued expenses (174) (11) 41
Net cash outflow from operations before dividends,
interest and taxation (5,083) (3,796) (7,187)
Dividends received 12,542 11,263 23,593
Interest received 531 826 1,481
Overseas withholding tax paid (1,849) (1,300) (3,003)
Net cash inflow from operating activities 6,141 6,993 14,884
Purchases of investments (357,807) (321,362) (570,659)
Sales of investments 340,152 293,680 595,515
Net cash (outflow)/inflow from investing activities (17,655) (27,682) 24,856
Dividends paid (14,768) (9,595) (14,597)
Proceeds from forfeiture of unclaimed dividends - 71 71
Issue of shares from Treasury 16,475 8,158 13,893
Repurchase of shares into Treasury (33,439) (12,622) (48,069)
Proceeds from share forfeiture - 731 731
Repayment of bank loan - - (15,205)
Drawdown of bank loan 30,806 15,790 15,790
Loan interest paid (475) (208) (583)
Private placement interest paid (971) (975) (1,925)
Net cash (outflow)/inflow from financing activities (2,372) 1,350 (49,894)
Decrease in cash and cash equivalents (13,886) (19,339) (10,154)
Cash and cash equivalents at start of period/year 25,038 34,207 34,207
Foreign currency exchange movements (605) 567 985
Cash and cash equivalents at end of period/year 10,547 15,435 25,038
Cash and cash equivalents consist of:
Cash at bank 430 12 112
Current asset investments in JPMorgan USD Liquidity Fund 10,117 15,423 24,926
Total 10,547 15,435 25,038
NOTES TO THE CONDENSED FINANCIAL STATEMENTS
For the six months ended 30th June 2025
1. Financial statements
The information contained within the condensed 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 2024
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 auditor 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 condensed financial statements are prepared under the historical cost
convention, modified to include fixed asset investments at fair value, in
accordance with the Companies Act 2006, United Kingdom Generally Accepted
Accounting Practice ('UK GAAP'), including FRS 102 'The Financial Reporting
Standard applicable in the UK and Republic of Ireland' 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 July 2022.
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 2025.
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 2024.
3. (Loss)/return per share
(Unaudited) (Unaudited) (Audited)
Six months ended Six months ended Year ended
30th June 30th June 31st December
2025 2024 2024
£'000 £'000 £'000
(Loss)/return per share is based on the following:
Revenue return 9,853 9,465 19,233
Capital (loss)/return (105,723) 286,865 452,584
Total (loss)/return (95,870) 296,330 471,817
Weighted average number of shares in issue 179,168,654 182,799,838 181,599,757
Revenue return per share 5.50p 5.18p 10.59p
Capital (loss)/return per share (59.01)p 156.93p 249.22p
Total (loss)/return per share (53.51)p 162.11p 259.81p
4. Dividends paid
(Unaudited) (Unaudited) (Audited)
Six months ended Six months ended Year ended
30th June 2025 30th June 2024 31st December 2024
Pence £'000 Pence £'000 Pence £'000
Dividend paid
Final dividend in respect of prior year 8.25 14,768 5.25 9,595 5.25 9,594
Interim dividend in respect of the six months - - - - 2.75 5,003
Total dividends paid 8.25 14,768 5.25 9,595 8.00 14,597
Proceeds from forfeiture of unclaimed dividends(1) - - - (71) - (71)
Net dividends . 8.25 14,768 5.25 9,524 8.00 14,526
( )
(1) During 2024, the Company undertook an Asset Reunification Program
to reunite inactive shareholders with their shares and unclaimed dividends.
In accordance with the Company's Articles of Association, the Company
exercised its right to forfeit the shares belonging to untraced shareholders
for a period of 12 years or more. These shares were sold in the open market
and the net proceeds returned to the Company. In addition, any unclaimed
dividends older than 12 years from the date of payment of such dividend were
forfeited and returned to the Company.
All dividends paid in the period/year have been funded from the revenue
reserve.
An interim dividend of 2.75p (2024: 2.75p) has been declared in respect of the
six months ended 30th June 2025, amounting to £4,870,000 (2024: £5,003,000).
5. Net asset value per share
The net asset value per Ordinary share and the net asset value attributable to
the Ordinary shares at the period/year end are shown below. These were
calculated using 177,106,660 (30th June 2024: 182,002,868; 31st December 2024:
179,095,954) Ordinary shares in issue at the period/year end (excluding
Treasury shares).
(Unaudited) (Unaudited) (Audited)
Six months ended Six months ended Year ended
30th June 2025 30th June 2024 31st December 2024
Net asset value Net asset value Net asset value
attributable attributable attributable
£'000 pence £'000 pence £'000 pence
Net asset value - debt at par value 1,860,243 1,050.4 1,845,784 1,014.2 1,987,845 1,109.9
Add: amortised cost of US$65 million 2.55% Private
Placement Feb 2031 47,239 26.6 51,174 28.1 51,670 28.9
Less: fair value of US$65 million 2.55% Private
Placement Feb 2031 (43,384) (24.5) (45,125) (24.8) (45,875) (25.6)
Add: amortised cost of US$35 million 2.32% Private
Placement Oct 2032 25,507 14.4 27,646 15.2 27,907 15.6
Less: fair value of US$35 million 2.32% Private
Placement Oct 2032 (22,194) (12.5) (22,903) (12.6) (23,396) (13.1)
Net asset value - debt at fair value 1,867,411 1,054.4 1,856,576 1,020.1 1,998,151 1,115.7
6. Fair valuation of instruments
The fair value hierarchy analysis for financial instruments held at fair value
at the period end is as follows:
(Unaudited) (Unaudited) (Audited)
Six months ended Six months ended Year ended
30th June 2025 30th June 2024 31st December 2024
Assets Liabilities Assets Liabilities Assets Liabilities
£'000 £'000 £'000 £'000 £'000 £'000
Level 1 1,951,943 - 1,925,506 - 2,042,755 -
Total value of investments 1,951,943 - 1,925,506 - 2,042,755 -
7. Analysis of change in net debt
Foreign
As at currency Other As at
31st December exchange non-cash 30th June
2024 Cash flows movements charges 2025
£'000 £'000 £'000 £'000 £'000
Cash and cash equivalents
Cash at bank 112 318 - - 430
Current asset investments(1) 24,926 (14,204) (605) - 10,117
25,038 (13,886) (605) - 10,547
Borrowings
Debt due after one year - (30,806) 1,616 - (29,190)
Private placements due after one year (79,577) - 6,850 (19) (72,746)
(79,577) (30,806) 8,466 (19) (101,936)
Net debt (54,539) (44,692) 7,861 (19) (91,389)
( )
(1) JPMorgan USD Liquidity Fund, money market fund.
Other non-cash charges relate to an amortisation adjustment on borrowings.
JPMORGAN FUNDS LIMITED
13(th) August 2025
For further information, please contact:
Priyanka Vijay Anand
For and on behalf of
JPMorgan Funds Limited
Telephone: 0800 20 40 20 or +44 1268 44 44 70
E-mail: jpmam.investment.trusts@jpmorgan.com
(mailto:jpmam.investment.trusts@jpmorgan.com)
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 will be submitted to the National Storage Mechanism
and will shortly be available for inspection
at https://data.fca.org.uk/#/nsm/nationalstoragemechanism
(https://data.fca.org.uk/#/nsm/nationalstoragemechanism)
The 2025 Half Year Report will also shortly be available on the Company's
website at www.jpmamerican.co.uk (http://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.
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