JPMorgan Japan Small JPMorgan Jap Smll - Annual Financial Report
26/06/2023 07:00
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RNS Number : 8033D JPMorgan Japan Small Cap G&I PLC 26 June 2023
LONDON STOCK EXCHANGE ANNOUNCEMENT
JPMORGAN JAPAN SMALL CAP GROWTH & INCOME PLC
FINAL RESULTS FOR THE YEAR ENDED 31st MARCH 2023
Chairman's Statement
Investment Performance
Fears of inflation and rapidly rising interest rates generated significant
volatility in major financial markets in the early part of the Company's
financial year ended 31st March 2023. However, subsequent signs of an easing
in inflation pressures led to hopes that rates would soon peak, and this
resulted in a rebound in global markets. The performance of the Japanese
market was similarly mixed. It ended the six months to end September 2022
almost flat, before recovering in the following six months. In addition to
the tailwinds provided by the improvement in global market sentiment, the
Japanese market was also supported in the past six months by the lifting of
Japan's final Covid--19 related restrictions and China's surprise abandonment
of its crippling zero-Covid policies. Despite the Bank of Japan's announcement
in December 2022 that it was going to adjust the yield curve control range,
which triggered speculation about the possibility that it would begin to
reverse its ultra-easy monetary stance, the Company's benchmark ended the
financial year up 5.0%.
The Company underperformed its benchmark, returning -5.7% on a NAV basis for
the full year, while the return to shareholders was -7.8% over the same
period. This disappointing result was in part due to the Company's bias
towards quality and growth stocks. This preference means the portfolio usually
differs significantly from the benchmark, which comprises many low-quality
companies with unappealing growth characteristics. It is therefore inevitable
that the Company's performance will often differ substantially from the
benchmark return. While the Company's NAV total returns lagged the benchmark
over one, three and five-year periods to 31st March 2023, the Annual total
return table on page 26 of the Annual Report shows that the Company
outperformed the benchmark in six of the last 10 financial years.
Shareholders will be all too aware of the market volatility over recent years
and therefore the Board has extended the NAV performance Key Performance
Indicator ('KPI') to 10 years as shown on page 28 of the Annual Report.
Over the past year, technology and other growth stocks came under pressure in
all major markets, including Japan. A series of aggressive interest rate hikes
by the US Federal Reserve, the Bank of England and the ECB, accompanied by
hawkish rhetoric about additional tightening, adversely impacted growth stocks
whose valuations are based on discounted future cash flows which diminish as
rates rise. The Company's exposure to many such stocks saw performance suffer
accordingly. There were also a number of specific stocks which contributed to
the underperformance during the year which are covered in the Investment
Managers' report.
However, the Board shares the Managers' conviction that good quality companies
with strong growth prospects will always outperform in the long run. The
Company's investment record and recent portfolio activity are explained in
more depth in the Investment Managers' Report. The Managers also outline the
reasons for their optimism about Japan's very favourable long-term prospects,
and the positive implications this has for the Company's ability to rebuild
strong performance.
Dividend Policy and Discount Management
The Company's dividend policy aims to pay, in the absence of unforeseen
circumstances, a regular dividend equal to 1% of the Company's NAV on the last
business day of the preceding financial quarter, being the end of March, June,
September and December. Over the year, this would approximate to 4% of the
average NAV, paid from other reserves. This dividend policy has now been in
place for five years. For the year ended 31st March 2023, quarterly dividends
paid totalled 14.2p per share (2022: 20.3p).
The Company's discount widened over the review period with an average discount
of 8.2%, and ending the year at 9.8%, moderately higher than the 7.4% level at
the same time last year. This widening is broadly in line with the experience
of many other investment trusts over this period. The Company did not
repurchase any shares during the year. However, the Board continues to monitor
the discount closely and is prepared to repurchase shares in an effort to
narrow the discount, when it considers this is appropriate, taking account of
market conditions. At the time of writing, the discount is 9.9%.
A resolution to approve the Company's dividend policy will be submitted to
shareholders at the forthcoming Annual General Meeting ('AGM').
Gearing/Borrowing
The Managers seek, at times, to enhance investment returns for shareholders by
borrowing money to buy more assets ('gearing'), subject to their view on
prevailing market conditions. The Company's gearing is discussed regularly by
the Board and the Managers, and the gearing level is reviewed by the Directors
at each Board meeting.
The Company's Yen 4.0 billion revolving credit facility with Scotiabank
expired during the year and was replaced with a Yen 4.0 billion two-year
revolving credit facility with ING Bank. This facility has a maturity date of
December 2024 and the Manager will seek to renew or replace this facility, at
the best available terms, on expiry.
Access to a credit facility provides the Managers with the ability to gear
tactically within the set guidelines. The Company's investment policy permits
gearing within a range of 10% net cash to 25% geared. However, the Board
requires the Managers to operate in the narrower range of 5% net cash to 15%
geared, in normal market conditions. During the past 12 months the Company's
gearing level ranged between 4.5% and 7.6%, ending the financial year at 5.6%
(2022: 6.1%).
Environmental, Social and Governance Considerations
As discussed in the Investment Managers' Report, environmental, social and
governance ('ESG') considerations are integral to the Managers' investment
process. The Board shares the Managers' view of the importance of ESG when
making investments that are sustainable over the long term and the necessity
of continual engagement with investee companies throughout the duration of the
investment. The Managers use their regular company meetings with potential and
existing portfolio companies to discuss and challenge management on their
adherence to ESG principles and best practice. The Board believes that
effective stewardship of this kind can help to create sustainable value for
shareholders.
Further information on the Managers' ESG process and engagement is set out in
the ESG Report on pages 16 to 21 of the Annual Report, and in the JPMorgan
Asset Management 2022 Investment Stewardship Report, which can be accessed at
https://am.jpmorgan.com/content/dam/jpm-am-aem/global/en/sustainable-investing/investment-stewardship-report.pdf.
Reporting under the Task Force on Climate Related Financial Disclosures
In accordance with the requirements of the Taskforce on Climate Related
Financial Disclosures ('TCFD'), JPMAM will provide product level reports for
the investment trusts it manages, including your Company, in late June 2023
and annually thereafter. The report will be made available on the Company's
website.
Key elements of the report will include Scope 1 and 2 greenhouse gas ('GHG')
emissions (i.e. emissions that are owned or controlled by the Company), total
carbon footprint, weighted average carbon intensity ('WACI') and, from June
2024, Scope 3 GHG emissions (i.e. emissions generated as a consequence of the
activities of the Company but which occur from sources not owned or controlled
by it). The report will also include a scenario analysis of how climate change
is likely to impact the Company's assets under orderly, disorderly and
hothouse world scenarios, and discussion of the most significant drivers of
performance under those scenarios.
The Board and Corporate Governance
There has been no change to the composition of the Board during the reporting
period.
Yuuichiro Nakajima, a member of the Board since April 2014, will retire from
the Board following the conclusion of the forthcoming AGM in July 2023. The
Board has benefited immensely from Yuuichiro's contribution, especially his
knowledge of the Japanese economy and investment environment. On behalf of
the Board and the shareholders, I would like to thank Yuuichiro for his
commitment to the Company since his appointment. The Board has a plan to
refresh its membership in an orderly manner over time, and will, as part of
its long-term succession planning, seek to recruit new non-executive Directors
when appropriate.
In accordance with good corporate governance practice, all Directors, with the
exception of Yuuichiro Nakajima, will stand for re-election at the
forthcoming AGM.
Shareholders who wish to contact the Chairman or other members of the Board
may do so through the Company Secretary or the Company's website, details of
which appear below.
Annual General Meeting
The Company's AGM will be held on Thursday, 27th July 2023 at 12.00 noon at 60
Victoria Embankment, London EC4Y 0JP.
We are delighted that this year we will once again be able to invite
shareholders to join us in person for the Company's AGM, to hear from the
Investment Managers, who will present at the meeting via video link from
Tokyo. Their presentation will be followed by a live question and answer
session. Shareholders wishing to follow the AGM proceedings but who choose not
to attend in person will be able to view them live and ask questions (but not
vote) through conferencing software. Details on how to register, together with
access details, will be available shortly on the Company's website at
www.jpmjapansmallcapgrowthandincome.co.uk or by contacting the Company
Secretary at invtrusts.cosec@jpmorgan.com.
My fellow Board members, representatives of JPMorgan and I look forward to the
opportunity to meet and speak with shareholders after the formalities of the
meeting have been concluded.
Shareholders who are unable to attend the AGM are strongly encouraged to
submit their proxy votes in advance of the meeting, so they are registered and
recorded at the AGM. Proxy votes can be lodged in advance of the AGM either by
post or electronically: detailed instructions are included in the Notes to the
Notice of the AGM on pages 90 to 93 of the Annual Report.
If there are any changes to the above AGM arrangements, the Company will
update shareholders through an announcement to the London Stock Exchange and
on the Company's website.
Outlook
Despite the persistently uncertain global investment climate, unsettling
geopolitical tensions and the near-term volatility these continue to generate,
the Board shares the Investment Managers' conviction that the long term
outlook for Japan's small cap companies remains positive. Japan is undergoing
significant technological and structural changes and its innovative,
entrepreneurial small cap companies are ideally placed to capitalise on the
opportunities these changes generate. Small cap companies are already leading
the way in a variety of niche markets. The Company's Managers are extremely
well-supported in their search for such success stories by JPMorgan's
extensive global and Tokyo-based research resources. The Board is therefore
optimistic about the Company's prospects, and we share the Managers'
confidence in its ability to continue delivering attractive levels of capital
growth to shareholders over the long term.
Alexa Henderson
Chairman
23rd June 2023
Investment Managers' Report
Performance and Market Review
Over the 12 months to March 2023, the Company's benchmark, the MSCI Japan
Small Cap Index (in sterling terms), produced a total return of +5.0%. The
Company's net assets underperformed the index by -10.7 percentage points over
the same period, delivering a return of -5.7%.
Early in the year, the market performance was weak on the back of continued
concerns over inflation and rising interest rates in major economies. These
rate increases had an especially adverse impact on the valuations of
technology and other high growth stocks in all major markets, as higher rates
reduce the value of these companies' future cash flows. Japanese
technology-related and growth stocks were caught up in the rout, despite the
fact that Japanese inflation remained relatively subdued.
The market started to rebound on anticipation of a peak in rate hikes
following slower than expected inflation figures in the US. But this rally
partially reversed as the Bank of Japan (BoJ) announced an adjustment in the
yield curve control range in December, which came sooner than expected, and
raised speculation about an eventual tightening of the BoJ's ultra-easy
monetary policy. Global concerns over the financial system were triggered by
the collapse of Silicon Valley Bank in March this year, leading to a fresh
bout of volatility. However, markets recovered towards the end of the
reporting period following government and central bank interventions to
support other struggling institutions and protect deposits. During the same
period, the Japanese yen weakened against the US dollar and sterling. The
Company's underperformance over the year is in part the result of its bias
towards quality and growth stocks, which were the stocks worst hit by last
year's market sell-off. This performance is very disappointing. However, our
investment strategy looks beyond short-term market fluctuations and adopts a
long-term perspective, based on the view that excess returns take time to
accumulate, especially for smaller cap stocks. While the past year's
performance has dragged down average annualised performance over the past few
years, over the 10 years to the end of March 2023, the Company has made an
average annual return of +7.8% in NAV terms, outperforming the benchmark by
+0.9 percentage points.
Performance attribution
Year ended 31st March 2023
% %
Contributions to total returns
Benchmark return 5.0
Sector allocation -3.7
Stock selection -6.3
Gearing/cash 0.5
Return relative to benchmark -9.5
Portfolio return -4.5
Management fee/other expenses -1.2
Return on net assets(A) -5.7
Return to shareholders(A) -7.8
Source: Factset, JPMAM, Morningstar.
All figures are on a total return basis.
Performance attribution analyses how the Company achieved its recorded
performance relative to its benchmark.
(A) Alternative Performance Measure ('APM').
A glossary of terms and APMs is provided on pages 94 and 95 of the Annual
Report.
Spotlight on sectors and stocks
During the 12 months under review, both sector allocation and stock selection
had a negative impact on performance.
The portfolio differs substantially from the benchmark, and this will, by
definition, often lead to significant volatility in performance relative to
the benchmark, as it has done over the past year. The most significant
detractors at the sector level included our overweights to software &
services and media & entertainment, sectors which came under particular
pressure during last year's sell-off. However, we believe that the trend
towards digitalisation will remain a source of significant potential growth in
Japan, considering the relatively low penetration of digital services such as
e-commerce and cashless payments, so we remain overweight in these sectors.
Our underweight to retailing also detracted, as this sector has done well due
to the favourable impact of Japan's re-opening. The main sector level
contributors to performance included our underweight to real estate and food
beverage & tobacco, and an overweight to consumer services. We maintained
underweight in real estate and food beverage & tobacco due to a relatively
lower level of conviction surrounding the long-term growth potential in both
sectors' companies. On the other hand, we continue to have an overweight in
consumer services as we see market share gain potential amid domestic
consolidation over the long term within the sector's names. At the stock
level, several names made significant positive contributions to returns,
including Capcom, Yamato Kogyo and Medley:
• Capcom develops and publishes video game software, including Street
Fighter, Monster Hunter, and Resident Evil (Biohazard). The earnings of gaming
software companies have stabilised over the past few years, especially for
those with strong intellectual property. This is due to the consistent rise in
the digital download ratio, which measures the download of games as
a percentage of total sales from all sources, including via retail outlets.
Digital downloads have higher per unit profitability thanks to the ease of
distribution, and companies such as Capcom, with multiple popular titles, are
benefitting from this shift.
• Yamato Kogyo is an electric arc furnace (EAF) steelmaker producing
construction steel using electricity to smelt scrap steel. Electric arc
furnaces emit only around one sixth to a quarter of the greenhouse gases
produced by conventional blast furnaces, and Yamato Kogyo is one of the
largest Japanese steelmakers using this technology. Outside Japan, the company
also has a globally well diversified business portfolio. It owns market
leading operations in the US, and South-East Asia, including Thailand and
Vietnam, through subsidiaries and joint ventures. We expect the shift towards
more environmentally friendly methods of steel production to ensure the
company enjoys a tailwind generated by strong global demand over the medium
term.
• Medley is a healthcare staffing platform and software solution provider.
Given Japan's aging population, the economy is experiencing a structural
shortage of workers in healthcare, as well as in many other sectors. The
ratios of job openings to job applicants for healthcare workers is
significantly higher than the all-industry average, making healthcare staffing
an attractive secular growth space. Within the industry, Medley differentiates
its staffing service by charging a low, success-based fee which compares
favourably with traditional players who charge either a 20-30% commission per
hiring or a fixed posting fee levied regardless of the application or hiring
outcome.
Unfortunately, the positive effect of these stock selection decisions was more
than offset by the adverse impact of other stock positions. The largest
detractors from performance over the period included Tosho, MEC and Benefit
One.
• Tosho is a gym operator mainly targeting clients new to gym attendance.
Before Covid-19, Tosho enjoyed the highest margin within the gym industry,
thanks to its unique customer targeting and highly efficient operation. The
company suffered a loss of gym memberships following the onset of the pandemic
but has since streamlined its operations further and is currently in a
recovery phase. Despite Tosho's recent challenging period, we continue to hold
this name, due to our confidence in the company's long-term growth potential.
• MEC manufactures advanced adhesion enhancer products used to produce
printed circuit boards. The company is a global leader in this niche market.
Its products improve adhesion between the wiring and insulating materials in
semiconductors, preventing abrasion after long exposure to heat. This is an
especially desirable characteristic in the production of miniature
semiconductors. We anticipate MEC's adhesion enhancers will enjoy rising
demand and revenue growth as the trend towards semiconductor miniaturisation
continues. MEC was the top positive contributor in the previous financial
period, though its share price corrected during the global semiconductor
cyclical downturn. Despite the correction, we still see great long-term
potential for MEC, and we have maintained our holding.
• Benefit One is Japan's number one fringe benefit outsourcing service
provider, following its recent acquisition of its competitor, the third
largest provider, JTB Benefit. Japan's structural labour shortage is
encouraging companies to use fringe benefits as a means of attracting talent.
Benefit One boasts close to 9 million members, but currently, less than 40% of
the working population receives fringe benefits, so there is great potential
for further growth in this market. Benefit One's share price corrected in
response to a longer than expected slowdown in topline growth due to the
impact of the pandemic, but we continue to hold this name given its long-term
growth potential.
Gearing stood at 5.6% at the end of the financial year.
About our investment philosophy
The Company aims to provide shareholders with access to the innovative and
fast-growing smaller companies' universe at the core of the Japanese economy.
Our portfolio favours quality and growth, and we target companies (other than
Japan's largest 200) which we believe can compound earnings growth over the
long term, supported by sustainable competitive advantages and good management
teams. We especially like businesses that reinvest to capitalise on their
growth potential. We believe the strong and durable market positioning of such
companies will allow them to substantially increase their intrinsic value over
time. At the same time, we avoid stocks that have no clear differentiation
from competitors and that operate in industries plagued by structural decline
and excess supply.
Our stock selection is based on fundamental analysis, local 'on-the-ground'
knowledge and extensive contact with the management teams of prospective and
current portfolio companies. The Company is managed by a team of three,
supported by over 20 Tokyo-based investment professionals who possess an
in-depth understanding of small cap businesses, which is a very
under-researched and under-appreciated part of the market. This local
knowledge thus provides us with a significant strength in identifying
investment opportunities overlooked by many investors.
Within our bottom-up investment process, the starting point is the Strategic
Classification framework, where we address the key question "Is this a
business that we want to own?". Through this process we assign a rating of
Premium, Quality or Trading to each stock, based on the economics, competitive
sustainability and governance practices of the business. We aim to maximise
exposure to Premium and Quality companies, where we are most confident in the
long-term outlook, and where possible, we aim to invest from an early stage,
in order to benefit fully as companies realise their growth potential.
When investing in smaller companies, we believe it is important to adopt a
long-term perspective, to give these companies the time they need to generate
excess returns. Consistency on this point is key, so we continue to focus on
quality companies with structural growth opportunities, despite the fact that
the portfolio may struggle at times when value stocks are in favour. Having
said that, the Company is not a 'growth at any price' strategy, and we always
strive to invest at a reasonable price. To this end, we use a five-year
expected return framework to consider whether a stock's price is at an
attractive level. It is also important to construct a well-balanced portfolio
to minimise unintended risks, so the portfolio is invested in a wide range of
sectors, including not only software services and technology hardware, but
also materials, chemicals, construction, machinery, retail and restaurants,
and consumer goods and services.
Trends and themes
While our decisions are based on company-specific factors, there are also
structural, long-term trends and themes that underlie much of our stock
selection.
Our investment themes include:
• Demographic Change: It is no secret that Japan's population is ageing
and shrinking. While this is a difficult environment for the economy overall,
there are areas that can profit from this trend. For example, staffing
companies or businesses focused on improving labour productivity are
benefitting from tight labour market conditions. The owners of family-run
businesses looking to divest as they approach retirement provide opportunities
for more M&A and consolidation, which can benefit larger industry players.
• Digital Innovation: Although Japan is an advanced industrial economy, it
lags other markets in the adoption of digitalisation. For example the
penetration of cashless payments, e-commerce, and cloud software services
remains relatively low. However, the direction of travel is as clear as it is
around the world, and we anticipate sustained growth in the adoption of
digital technologies over the medium to long term.
• Industry Niches: Japanese manufacturing is world class, and the country
is a leading global supplier of factory automation equipment, robots,
electronics parts and materials. These present attractive investment
opportunities for companies specialising in niche products and technology
segments.
• World Class Consumer Brands: Japanese businesses operating beyond
Japan's shores are in a very strong position to capture new customers in
Asia's dynamic, fast-growing economies. Demand for high quality Japanese goods
and brands is likely to be particularly strong.
• De-carbonisation: The environment is the subject of much attention in
Japan, thanks to the government's commitment to reduce carbon emissions to net
zero by 2050. Japanese smaller companies have unique technologies capable of
reducing emissions in many industries, including electric vehicles, solar and
wind power generation, and other clean energy sources. We continue our efforts
to identify companies well positioned to benefit from efforts to reduce
emissions, and those with the ability to transform their business models to
meet the government's net zero target.
• Corporate Governance: Japanese companies are making a concerted effort
to improve governance standards via the appointment of more independent,
external board directors and the adoption of other beneficial policies. These
include enhanced shareholder returns, tighter internal controls and stronger
disclosure rules to boost transparency. There is room for further improvement
in the quality of corporate governance, and the market is likely to reward
companies that upgrade their governance standards. We will therefore maintain
an ongoing constructive dialogue with companies on this broad theme.
Portfolio Activity
Key new purchases during the reporting period included Sangetsu, Paltac and
Kyushu Railway.
• Sangetsu is Japan's number one wallpaper producer. This is a mature
market, dominated by an oligopoly of three companies, where the top player,
Sangetsu, has been consistently expanding market share, and currently supplies
over 50% of the market. The pricing environment has been improving recently,
with the number two player following Sangetsu's lead in raising prices.
Sangetsu has a solid balance sheet with a net cash position, and a strong
commitment to shareholder returns.
• Paltac is the top wholesaler for cosmetics and other everyday items sold
in drugstores, discount stores and other outlets. The market is fragmented,
but Paltac has been consistently gaining market share, which currently stands
at over 30%, with scope to rise further thanks to the company's overwhelming
scale and constant efficiency gains it is realising from the introduction of
automation. Paltac has a solid balance sheet, with a net cash position, and we
also sense an overall improvement in capital allocation.
• Kyushu Railway is a railway operator in the Kyushu region. The company
also has non-railway businesses such as real estate leasing and hotels.
Railway companies were negatively impacted by Covid-19, although we anticipate
steady growth over the mid-to-long-term, supported by the return of inbound
tourism. Enhanced shareholder returns should also underpin the share price,
while valuations are not demanding.
To fund these and other acquisitions, our largest divestments over the past
year included SUMCO, Iriso Electronics, Money Forward and S-Pool. We sold
SUMCO, which produces silicon wafers for use in semiconductors, and Iriso
Electronics, another electronic components manufacturer, in favour of higher
conviction ideas within hardware technology, including the acquisition of
Fujimi and Japan Material. We also exited Money Forward, one of the top cloud
accounting service providers for mid and small-cap enterprises. Competition in
this industry is increasing, leading to higher-than-expected upfront marketing
and R&D costs and less certainty about Money Forward's financial prospects
over the long term. A position in S-Pool, an employment agency focused on
services for people with disabilities, was also closed due to the risk of
regulatory pressures.
Our bias towards quality and growth means the portfolio continues to have a
higher return on equity (ROE) and stronger earnings per share (EPS) growth
than its benchmark.
Outlook and strategy
The external environment is uncertain, pervaded by geopolitical tensions, the
risk of a global recession, and persistent concerns about inflation and
interest rate hikes. Japan is also seeing signs of inflation, as rising
commodity prices and a weaker yen have imported inflationary pressures
although inflation levels are lower than in other major markets. However, as
one response to Japan's tight labour market conditions, some large corporates
have started to announce generous wage increases, to attract and retain
workers. These increases follow decades of stagnant wages, so this is very
encouraging for the Japanese economy. On the monetary policy front, following
the BoJ's monetary policy tweak in December 2022, financial markets are
awaiting further policy guidance from the BoJ's new governor.
Regardless of these external and domestic events, we remain optimistic about
the long-term outlook for Japanese small cap companies, and your Company, for
several reasons. The average valuations of Japanese companies remain
reasonable, and lower than both historical averages and valuations in most
other major markets. Furthermore, Japanese equity markets will draw near-term
support from Japan's belated lifting of Covid-19 restrictions. Japan reopened
its borders in October 2022, much later than most other developed nations, and
just before China's surprise decision to abandon its zero Covid-19 policies.
So inbound tourism and a general reopening of the Japanese economy have only
just gained traction in recent months. China's reopening is also supportive
for many Japanese companies.
However, in our view, the most important structural support for Japan's equity
market over the medium to longer term will be the ongoing improvement in
corporate governance. The past few years have seen clear progress on this
front, in large part thanks to the Corporate Governance Code introduced in
2015. We have seen notable improvement in areas such as board independence,
and we expect more positive developments ahead, especially increased
shareholder returns. Half of Japan's listed non-financial companies still have
net cash positions, so there is significant scope for this cash to be returned
to shareholders over the longer term.
The pandemic has given added impetus to some other positive structural changes
underway in Japan, especially the application of technology and digitalisation
in many areas of economic activity. These trends will underpin growth,
productivity and corporate earnings for years to come. In sharp contrast to
other developed economies, Japan's smaller companies are at the forefront of
this innovation and change making them ideally positioned to prosper over the
long term. However, the sell side coverage for such exciting mid- and
small-cap companies tends to be thin, so many investors overlook the
compelling opportunities available in this sector of the market.
In contrast, we have the support of a large team of Japanese equity analysts
and fund managers on the ground in Tokyo, to help us identify these hidden
gems. This puts the Company in a favourable position to capitalise on the
long-term structural changes playing out in Japan. This, combined with our
long-term performance track record, underpins our conviction that our
investment approach is sound, and capable of weathering bouts of short-term
volatility such as we are currently experiencing, just as it has done in the
past. We are therefore confident the Company will deliver positive and
sustained returns to our shareholders over the medium and long term.
Miyako Urabe
Xuming Tao
Naohiro Ozawa
Investment Managers
23rd June 2023
Principal and Emerging Risks
The Board has overall responsibility for reviewing the effectiveness of the
Company's system of risk management and internal control.
The Board is supported by the Audit Committee in the management of risk. The
risk management process is designed to identify, evaluate, manage, and
mitigate risks faced.
Although the Board believes that it has a robust framework of internal
controls in place this can provide only reasonable, and not absolute,
assurance against material financial misstatement or loss and is designed to
manage, not eliminate, risk.
The Directors confirm that they have carried out a robust assessment of the
principal and emerging risks facing the Company, including those that would
threaten its business model, future performance, solvency or liquidity. The
risks identified and the ways in which they are managed or mitigated are
summarised below.
With the assistance of JPMF, the Audit Committee has drawn up a risk matrix,
which identifies the principal and emerging risks to the Company. These are
reviewed and discussed on a regular basis by the Board, through the Audit
Committee. These risks fall broadly into the following categories:
Movement from
Principal risk Description Mitigation/Control Prior Year
Investment and Strategy An inappropriate investment strategy, poor asset allocation or the level of The Company has a clearly defined strategy and investment remit, which is
gearing, may lead to underperformance against the Company's benchmark index reviewed annually. The portfolio is managed by a highly experienced Investment
and its peer companies, resulting in the Company's shares trading on a wider Manager, with a defined investment appraisal process. The Board relies on the
discount. Investment Manager's skills and judgment to make investment decisions based on
research and analysis of individual stocks and sectors. To aid appropriate
investment decisions, the Board has set investment guidelines and parameters
for the portfolio managers to follow. The AIFM also monitors the Investment Risk has been heightened by the Company's underperformance during the year.
Manager against the Company's investment guidelines.
The Board reviews the performance of the portfolio against the Company's
benchmark index, that of its competitors and the outlook for the markets on a
regular basis, with the portfolio managers who attend Board meetings. Where
necessary the portfolio managers will take action following a review of the
performance.
The Board also reviews the level of premium/discount to NAV at which the
Company's shares trade and movements in the share register. The Board
regularly seeks the views of its investors.
Market Market risk arises from uncertainty about the future prices of the Company's The Board considers the split in the portfolio between small and large
investments. This market risk comprises three elements - equity market risk, companies, sector and stock selection and levels of gearing on a regular basis
currency risk and interest rate risk. and has set investment restrictions and guidelines, which are monitored and
reported on by JPMF. The Board monitors the implementation and results of the
investment process with the Manager. However, the fortunes of the portfolio
are significantly determined by market movements in Japanese equities, the
rate of exchange between the Japanese yen and sterling and interest rate Risk has been heightened by inflationary pressures due to an adjustment in the
changes. This is a risk that investors take having invested into a single yield curve control range announced by the Bank of Japan in December and
country fund. The Board recognises the benefits of a closed-end fund structure market volatility caused by global concerns over the financial system.
in extremely volatile markets. During times of elevated market stress, the
ability of a closed-ended fund structure to remain invested for the long term
enables the Manager to adhere to disciplined fundamental analysis from a
bottom-up approach and be ready to respond to dislocations in the market as
opportunities present themselves.
Operational and Cybercrime Disruption to, or failure of, the Manager's accounting, dealing or payments On 1st July 2014, the Company appointed Bank of New York Mellon ®
systems or the custodian's or depositary's records could prevent accurate (International) Limited to act as its depositary, responsible for overseeing
reporting and monitoring of the Company's financial position. the operations of the custodian, JPMorgan Chase Bank, N.A., and the Company's Risk remains relatively unchanged.
cash flows. Details of how the Board monitors the services provided by the
Manager and its associates and the key elements designed to provide effective The operational requirements of the Company, including from its key
internal control are included in the Risk Management and Internal Control third-party service providers, have been subject to rigorous testing. To date
section of the Corporate Governance Report on pages 49 and 50 of the Annual the operational arrangements have proven robust and key third-party service
Report. providers have not experienced significant operational difficulties.
As an externally managed investment trust, there is a continued reliance on
the Manager and other third-party service providers.
The Board reviews the overall performance of the Manager and other key
third-party service providers and compliance with the investment management
agreement on a regular basis to ensure their continued competitiveness and
effectiveness, which includes assessment of the providers' control systems,
whistle-blowing, anti-bribery and corruption policies and business continuity
plans.
The Manager's internal control processes are monitored throughout the year and
are evidenced through its Service Organisation Control (SOC 1) reports,
prepared by an independent auditor. The SOC 1 reports, which are reviewed
annually by the Audit Committee, provide assurance in respect of the effective
operation of internal controls.
Service providers are appointed with clearly-documented contractual
arrangements detailing service expectations. The Audit Committee receives
assurance and internal controls reports from key service providers on an
annual basis.
The threat of cyber-attack, in all its guises, is regarded as at least as
important as more traditional physical threats to business continuity and
security. The Board has received the cyber security policies for its key third
party service providers and JPMF has assured the Directors that the Company
benefits directly or indirectly from all elements of JPMorgan's Cyber Security
programme. The information technology controls around the physical security of
JPMorgan's data centres, security of its networks and security of its trading
applications are tested by independent reporting accountants and reported
every six months against the Audit and Assurance Faculty Standard.
Loss of Investment Team or Investment Managers The sudden departure of the investment managers or several members of the The Manager takes steps to reduce the likelihood of such an event by ensuring ®
wider investment management team could result in a short-term deterioration in appropriate succession planning and the adoption of a team based approach.
investment performance. The Manager has ensured the portfolio is managed by a robust portfolio
management team i.e. the portfolio is co-managed by three portfolio managers
who are supported by a number of on-the-ground investment professionals.
Share Price Relative to NAV per Share If the share price of an investment trust is lower than the NAV per share, the The Board monitors the Company's premium/discount level and, although the ®
shares are said to be trading at a discount. rating largely depends upon the relative attractiveness of the trust, the
Board has authority to issue new shares or buy backs its existing shares when Risk remains relatively unchanged.
deemed by the Board to be in the best interests of the Company and its
shareholders. The Board is committed to consider buying back the Company's The Board regularly reviews and monitors the Company's objective and
shares when/if they stand at anything more than a small discount to enhance investment policy and strategy, the investment portfolio and its performance,
the NAV per share for remaining shareholders. the level of discount/
premium to net asset value at which the shares trade and movements in the
share register.
Accounting, Legal and Regulatory In order to qualify as an investment trust, the Company must comply with Were the Company to breach Section 1158, it might lose its investment trust ®
Section 1158 of the Corporation Tax Act 2010 ('Section 1158'). Details of the status and, as a consequence, gains within the Company's portfolio would be
Company's approval are given on page 27. Section 1158 requires, among other subject to Capital Gains Tax. The Section 1158 qualification criteria are Risk remains relatively unchanged.
matters, that the Company does not retain more than 15% of its investment continually monitored by JPMF and the results reported to the Board each
income, can demonstrate an appropriate diversification of risk and is not a month. The Company must also comply with the provisions of the Companies Act Compliance with relevant regulations is monitored on an ongoing basis by the
close company. 2006 and, as its shares are listed on the London Stock Exchange, the UKLA Company Secretary and Manager who report regularly to the Board.
Listing Rules and Disclosure Guidance and Transparency Rules ('DTRs').
A breach of the Companies Act 2006 could result in the Company and/or the
Directors being fined or the subject of criminal proceedings. Breach of the
UKLA Listing Rules or DTRs could result in the Company's shares being
suspended from listing, which in turn would breach Section 1158. The Directors
seek to comply with all relevant regulation and legislation in the UK, Europe
and the US and rely on the services of its Company Secretary, JPMF, and its
professional advisers to monitor compliance with all relevant requirements.
Political and Economic Political changes in Japan and the resulting economic uncertainty may affect The Company is at risk from changes to the regulatory, legislative and ®
the Company, the value of its investments in Japan and capital allocation taxation framework within which it operates, whether such changes were
decision making. Changes in legislation, including in Japan, the US, UK and designed to affect it or not. The Board monitors and receives advice from the Risk remains relatively unchanged.
the European Union, may adversely affect the Company either directly or Manager and other advisors on political and economic risks.
because of restrictions or enforced changes on the operations of the Manager. Political risks have always been part of the investment process.
JPMF makes recommendations to the Board on accounting, dividend and tax
policies and the Board seeks external advice where appropriate. Significant
political events could impact the health of the Japanese or UK economy,
resulting in the imposition of restrictions on the free movement of capital.
Global Pandemics The emergence of COVID-19 has highlighted the speed and extent of economic The Board receives reports on the business continuity plans of the Manager and ®
damage that can arise from a pandemic. Evidence suggests that the likelihood other key service providers. The effectiveness of these measures has been
of pandemics has increased over the past century due to increased global assessed throughout the course of the COVID-19 pandemic and the Board will Risk remains relatively unchanged.
travel and integration, urbanisation, changes in land use, and greater continue to monitor developments as they occur and seek to learn lessons which
exploitation of the natural environment. may be of use in the event of future pandemics. The economic impact of the COVID-19 pandemic has been considered. There are
always exogenous risks and consequences, which are difficult to predict and
The response to the Pandemic by the Japanese and other governments may To date the portfolio's holdings have not exhibited a long-term negative plan for in advance. The Company does what it can to address these risks when
potentially fail to mitigate the economic damage created by the Pandemic and impact and have recovered as the containment measures eased. they emerge, not least operationally and in trying to meet its investment
public health responses to it, or may create new risks in their own right.
objective.
The Board is mindful that implications arising from future pandemics will vary
and hence the ability to assess mitigation activities is limited. But the
Board seeks to manage these risks through: a broadly diversified equity
portfolio, appropriate asset allocation, reviewing key economic and political
events and regulatory changes, active management of risk and the application
of relevant policies on gearing and liquidity.
Geopolitical instability Geopolitical Risk is the potential for political, socio-economic and cultural There is little direct control of this risk possible. The Company addresses
events and developments to have an adverse effect on the value of the these global developments through regular questioning of the Manager and will
Company's assets. continue to monitor these issues as they develop.
The Company and its assets may be impacted by geopolitical instability, in The Board has the ability, with shareholder approval, to amend the policy and
particular concerns over global economic growth. The crisis in Ukraine has objectives of the Company to mitigate the risks arising from geopolitical
affected energy and commodity markets and may cause further damage to the concerns. Although geopolitical risks are part of the investment process, this risk has
global economy. been heightened by the recent Russia-Ukraine invasion.
The ongoing conflict between Russia and Ukraine has heightened the possibility
that tensions will spill over and intensify geo-political unrest between other
countries sharing a common border.
Climate Change Climate change has become one of the most critical issues confronting The Board receives ESG reports from the Manager on the portfolio and the way
companies and their investors. Climate change can have a significant impact on ESG considerations are integrated into the investment decision-making, so as
the business models, sustainability and even viability of individual to mitigate risk at the level of stock selection and portfolio construction.
companies, whole sectors and even asset classes. As extreme weather events become more common, the resiliency, business
continuity planning and the location strategies of the Company's services
providers will come under greater scrutiny.
Risk has been heightened by rising temperatures fueling environmental
degradation, natural disasters, weather extremes, food and water insecurity
and economic disruption.
Emerging Risks
The Board is cognisant of emerging risks, which are characterised by a high
degree of uncertainty in terms of probability of occurrence and possible
effects on the Company.
Emerging risks are considered as they are identified and are incorporated into
the Company's risk matrix. The Board, through the Audit Committee, will
continue to assess these risks on an ongoing basis. The following have been
identified as emerging risks:
Emerging risk Description Mitigation/Control
Artificial Intelligence (AI) While it might equally be deemed a great opportunity and force for good, there The Board will work with the Manager to monitor developments concerning AI as
appears also to be an increasing risk to business and society more widely from its use evolves and consider how it might threaten the Company's activities,
AI. Advances in computing power means that AI has become a powerful tool that which may, for example, include a heightened threat to cybersecurity. The
will impact a huge range of areas and with a wide range of applications that Board will work closely with the Manager in identifying these threats and, in
include the potential to disrupt and even to harm. In addition the use of AI addition, monitor the strategies of our service providers. Furthermore, the
could be a significant disrupter to business processes and whole companies Company's investment process includes consideration of technological
leading to added uncertainty in corporate valuations. advancement and the resultant potential to disrupt both individual companies
and the wider markets.
Transactions with related parties
Full details of Directors' remuneration and shareholdings can be found on
pages 55 and 56 and in note 6 on page 74 of the Annual Report.
Statement of Directors' Responsibilities
The Directors are responsible for preparing the Annual Report and the
financial statements in accordance with applicable law and regulation.
Company law requires the Directors to prepare financial statements for each
financial year. Under that law the Directors have prepared the financial
statements in accordance with United Kingdom Generally Accepted Accounting
Practice (United Kingdom Accounting Standards, comprising FRS 102 'The
Financial Reporting Standard applicable in the UK and Republic of Ireland' and
applicable law). Under company law the Directors must not approve the
financial statements unless they are satisfied that they give a true and fair
view of the state of affairs of the Company and of the profit or loss of the
Company for that period. In preparing the financial statements, the Directors
are required to:
• select suitable accounting policies and then apply them consistently;
• state whether applicable United Kingdom Accounting Standards, comprising
FRS 102, have been followed, subject to any material departures disclosed and
explained in the financial statements;
• make judgements and accounting estimates that are reasonable and
prudent; 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.
The Directors are responsible for keeping adequate accounting records that are
sufficient to show and explain the Company's transactions and disclose with
reasonable accuracy at any time the financial position of the Company and
enable them to ensure that the financial statements and the Directors'
Remuneration Report comply with the Companies Act 2006.
The Directors are also responsible for safeguarding the assets of the Company
and hence for taking reasonable steps for the prevention and detection of
fraud and other irregularities.
The Directors are responsible for the maintenance and integrity of the
Company's website. Legislation in the United Kingdom governing the preparation
and dissemination of financial statements may differ from legislation in other
jurisdictions.
Under applicable law and regulations the Directors are also responsible for
preparing a Strategic Report, a Directors' Report and a Directors'
Remuneration Report that comply with the law and those regulations.
Each of the Directors, whose names and functions are listed in Directors'
Report confirm that, to the best of their knowledge:
• the Company's financial statements, which have been prepared in
accordance with United Kingdom Generally Accepted Accounting Practice (United
Kingdom Accounting Standards, comprising FRS 102 'The Financial Reporting
Standard applicable in the UK and Republic of Ireland', and applicable law),
give a true and fair view of the assets, liabilities, financial position and
profit of the Company; and
• the Directors' Strategic Report includes a fair review of the
development and performance of the business and the position of the Company,
together with a description of the principal risks and uncertainties that it
faces.
The Directors consider that the Annual Report and Financial Statements, taken
as a whole, is fair, balanced and understandable and provides the information
necessary for shareholders to assess the Company's position and performance,
business model and strategy.
For and on behalf of the Board
Alexa Henderson
Chairman
23rd June 2023
Statement of Comprehensive Income
For the year ended 31st March
2023 2022
Revenue Capital Total Revenue Capital Total
£'000 £'000 £'000 £'000 £'000 £'000
Losses on investments held at fair value through profit or loss - (15,007) (15,007) - (72,449) (72,449)
Net foreign currency gains - 619 619 - 920 920
Income from investments 4,736 41 4,777 3,855 - 3,855
Other interest receivable 3 - 3 - - -
Gross return/(loss) 4,739 (14,347) (9,608) 3,855 (71,529) (67,674)
Management fee (1,856) - (1,856) (2,498) - (2,498)
Other administrative expenses (472) - (472) (454) - (454)
Net return/(loss) before finance costs and taxation 2,411 (14,347) (11,936) 903 (71,529) (70,626)
Finance costs (321) - (321) (215) - (215)
Net return/(loss) before taxation 2,090 (14,347) (12,257) 688 (71,529) (70,841)
Taxation (500) - (500) (357) - (357)
Net return/(loss) after taxation 1,590 (14,347) (12,757) 331 (71,529) (71,198)
Return/(loss) per share (note 2) 2.92p (26.32)p (23.40)p 0.61p (131.22)p (130.61)p
Statement of Changes in Equity
Called up Capital
share Share redemption Other Capital Revenue
capital premium reserve reserve(1,2) reserves(2) reserve(2) Total
£'000 £'000 £'000 £'000 £'000 £'000 £'000
At 31st March 2021 5,595 33,978 1,836 282,835 (13,231) (11,195) 299,818
Net (loss)/return - - - - (71,529) 331 (71,198)
Dividends paid in the year (note 3) - - - (11,883) - - (11,883)
At 31st March 2022 5,595 33,978 1,836 270,952 (84,760) (10,864) 216,737
Net (loss)/return - - - - (14,347) 1,590 (12,757)
Dividends paid in the year (note 3) - - - (7,958) - - (7,958)
At 31st March 2023 5,595 33,978 1,836 262,994 (99,107) (9,274) 196,022
(1) The share premium was cancelled in the period ended 31st March 2001 and
redesignated as 'other reserve'.
(2) These reserves form the distributable reserves of the Company and may be
used to fund distributions to investors via dividend payments.
Statement of Financial Position
At 31st March
2023 2022
£'000 £'000
Fixed assets
Investments held at fair value through profit or loss 206,931 229,912
Current assets
Debtors 3,412 2,672
Cash and cash equivalents 7,446 10,143
10,858 12,815
Creditors: amounts falling due within one year (21,767) (25,990)
Net current liabilities (10,909) (13,175)
Total assets less current liabilities 196,022 216,737
Net assets 196,022 216,737
Capital and reserves
Called up share capital 5,595 5,595
Share premium 33,978 33,978
Capital redemption reserve 1,836 1,836
Other reserve 262,994 270,952
Capital reserves (99,107) (84,760)
Revenue reserve (9,274) (10,864)
Total shareholders' funds 196,022 216,737
Net asset value per share (note 4) 359.6p 397.6p
Statement of Cash Flows
For the year ended 31st March
2023 2022(1)
£'000 £'000
Cash flows from operating activities
Net loss before finance costs and taxation (11,936) (70,626)
Adjustment for:
Net loss on investments held at fair value through profit or loss 15,007 72,449
Net foreign currency gains (619) (920)
Dividend income (4,736) (3,855)
Interest income (3) -
Realised loss/(gain) on foreign exchange transactions 25 (154)
Decrease/(Increase) in accrued income and other debtors 92 (105)
Decrease/(Increase) in accrued expenses 15 (35)
Net cash used in operating activities (2,155) (3,246)
Dividends received 4,355 3,231
Interest received 3 -
Overseas tax paid (473) -
Net cash inflow/(outflow) from operating activities 1,730 (15)
Purchases of investments (46,467) (67,865)
Sales of investments 55,328 89,635
Settlement of foreign currency contracts - 45
Net cash inflow from investing activities 8,861 21,815
Dividends paid (7,958) (11,883)
Repayment of bank loan (4,844) -
Interest paid (340) (223)
Net cash outflow from financing activities (13,142) (12,106)
(Decrease)/increase in cash and cash equivalents (2,551) 9,694
Cash and cash equivalents at start of year 10,143 627
Unrealised loss on foreign currency cash and cash equivalents (146) (178)
Cash and cash equivalents at end of year 7,446 10,143
Cash and cash equivalents consist of:
Cash and short-term deposits 7,446 10,143
Total 7,446 10,143
(1) The presentation of the Cash Flow Statement, as permitted under FRS 102,
has been changed so as to present the reconciliation of 'net return/(loss)
before finance costs and taxation' to 'cash used in operating activities' on
the face of the Cash Flow Statement. Previously, this was shown by way of note
to the Cash Flow Statement. Other than consequential changes in presentation
of the certain cash flow items, there is no change to the cash flows as
presented in previous periods.
RECONCILIATION OF NET DEBT
As at Other non-cash As at
31st March 2022 Cash flows charges 31st March 2023
£'000 £'000 £'000 £'000
Cash and cash equivalents
Cash 10,143 (2,551) (146) 7,446
10,143 (2,551) (146) 7,446
Borrowings
Debt due within one year (25,030) 4,844 740 (19,446)
(25,030) 4,844 740 (19,446)
Net debt (14,887) 2,293 594 (12,000)
Notes to the Financial Statements
For the year ended 31st March 2023
1. Accounting policies
(a) Basis of accounting
The financial statements are prepared under the historical cost convention,
modified to include the revaluation of fixed asset investments which are
recorded 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 'SORP') issued
by the Association of Investment Companies in July 2022.
All of the Company's operations are of a continuing nature.
The financial statements have been prepared on a going concern basis. The
disclosures on going concern on pages 52 and 53 in the Annual Report form
part of these financial statements.
The policies applied in these financial statements are consistent with those
applied in the preceding year.
2. Return/(loss) per share
2023 2022
£'000 £'000
Return per share is based on the following:
Revenue return 1,590 331
Capital loss (14,347) (71,529)
Total loss (12,757) (71,198)
Weighted average number of shares in issue during the year (excluding Treasury 54,510,339 54,510,339
shares)
Revenue return per share 2.92p 0.61p
Capital loss per share (26.32)p (131.22)p
Total loss per share (23.40)p (130.61)p
3. Dividends
(a) Dividends paid and declared
2023 2022
£'000 £'000
Dividends paid
2022 fourth quarterly dividend of 4.0p (2021: 5.5p) paid to shareholders in 2,180 2,998
May
2023 first quarterly dividend of 3.4p (2022: 5.5p) paid to shareholders in 1,854 2,998
August
2023 second quarterly dividend of 3.6p (2022: 5.8p) paid to shareholders in 1,962 3,162
November
2023 third quarterly dividend of 3.6p (2022: 5.0p) paid to shareholders in 1,962 2,725
February
Total dividends paid in the year 7,958 11,883
2023 2022
£'000 £'000
Dividend declared
2023 fourth quarterly dividend of 3.6p (2022: 4.0p) payable to shareholders in 1,962 2,180
May
All dividends paid and declared in the year have been funded from the other
reserve.
The fourth quarterly dividend has been declared in respect of the year ended
31st March 2023. In accordance with the accounting policy of the Company, this
dividend will be reflected in the financial statements for the year ending
31st March 2024.
(b) Dividend for the purposes of Section 1158 of the Corporation Tax Act
2010 ('Section 1158')
The requirements of Section 1158 are considered on the basis of dividends
declared in respect of the financial year, shown below.
2023 2022
£'000 £'000
2023 first quarterly dividend of 3.4p (2022: 5.5p) 1,854 2,998
2023 second quarterly dividend of 3.6p (2022: 5.8p) 1,962 3,162
2023 third quarterly dividend of 3.6p (2022: 5.0p) 1,962 2,725
2023 fourth quarterly dividend payable of 3.6p (2022: 4.0p) 1,962 2,180
Total 7,740 11,065
4. Net asset value per share
2023 2022
Net assets (£'000) 196,022 216,737
Number of shares in issue, excluding shares held in Treasury 54,510,339 54,510,339
Net asset value per share 359.6p 397.6p
5. Status of results announcement
2023 Financial Information
The figures and financial information for 2023 are extracted from the
published Annual Report and Accounts for the year ended 31st March 2023 and do
not constitute the statutory accounts for that year. The Annual Report and
Accounts has been delivered to the Registrar of Companies and included the
Report of the Independent Auditors which was unqualified and did not contain a
statement under either section 498(2) or section 498(3) of the Companies Act
2006.
2022 Financial Information
The figures and financial information for 2022 are extracted from the Annual
Report and Accounts for the year ended 31st March 2022 and do not constitute
the statutory accounts for the year. The Annual Report and Accounts include
the Report of the Independent Auditors which is unqualified and does not
contain a statement under either section 498(2) or section 498(3) of the
Companies Act 2006. The Annual Report and Accounts will be delivered to the
Register of Companies in due course.
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
JPMORGAN FUNDS LIMITED
ENDS
A copy of the annual report will shortly be submitted to the National Storage
Mechanism and will be available for inspection at
https://data.fca.org.uk/#/nsm/nationalstoragemechanism.
The annual report will shortly be available on the Company's website at
www.jpmjapansmallcapgrowthandincome.co.uk where up-to-date information on the
Company, including daily NAV and share prices, factsheets and portfolio
information can also be found.
JPMORGAN FUNDS LIMITED
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