JPMorgan Japan Small JPMorgan Jap Smll - Annual Financial Report
21/06/2024 07:00
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RNS Number : 2972T JPMorgan Japan Small Cap G&I PLC 21 June 2024
LONDON STOCK EXCHANGE ANNOUNCEMENT
JPMORGAN JAPAN SMALL CAP GROWTH & INCOME PLC
FINAL RESULTS FOR THE YEAR ENDED 31st MARCH 2024
Legal Entity Identifier: 549300KP3CRHPQ4RF811
Information disclosed in accordance with the DTR 4.1.3
ChairMAN's Statement
Investment Performance
During the 12-month period ended 31st March 2024, the Company produced a total
return on net assets of +5.0%, while its benchmark, the MSCI Japan Small Cap
Net Return Index (in sterling terms), produced a total return of +12.0%,
resulting in an underperformance of 7.0%. The MSCI Small Cap Growth Index
which better reflects the Company's portfolio rose by 6.6% during the 12-month
period ended 31st March 2024.
This is a disappointing result, which is due in part to the Company's
investment style which has a bias towards smaller cap, quality, growth names.
During the year, the market has favoured larger, lower-quality value-oriented
stocks which do not meet the Company's investment criteria, due to their
unappealing growth characteristics. However, the Board shares the Portfolio
Managers' conviction that good quality companies with strong growth prospects
will always perform well over the longer term. Indeed, the Company delivered
an annualised return(A) on net assets of +8.0% over the ten years ended 31st
March 2024, not far below the benchmark, which returned 8.5% over the period.
The Company's recent portfolio activity is detailed in the Investment
Manager's Report. The Portfolio 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 approximates to 4% of the average
NAV, paid from other reserves. For the year ended 31st March 2024, quarterly
dividends paid out totalled 14.2p per share (2023: 14.2p). Based on the
current share price, the Company offers an attractive dividend yield of 4.5%.
A resolution to approve the Company's dividend policy will be submitted to
shareholders at the forthcoming Annual General Meeting ('AGM').
The Company's discount widened over the review period, ending the year at
12.5%, up from the 9.8% discount reported at the same time last year. This
widening is broadly in line with the experience of many other investment
trusts over this period. The Board closely monitors the discount and
recognises that it is in shareholders' interests that the Company's share
price does not differ excessively from the underlying NAV under normal market
conditions. Given the prolonged period of discount widening and the Board's
conviction that the current discount to NAV is unwarranted, during the period
under review the Board decided to resume share buybacks for the first time
since March 2018. During the year, 166,117 shares were repurchased, amounting
to 0.3% of shares in issue, and held in Treasury. A further 175,029 shares
have been purchased so far this financial year. At the time of writing, the
discount stands at 13.4%.
Gearing/Borrowing
The Portfolio 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 Portfolio Managers, and the gearing level is
reviewed by the Directors at each Board meeting.
The Company currently has a Yen 4.0 billion two-year revolving credit facility
with ING Bank. This facility has a maturity date of December 2024, and the
Investment Manager will seek to renew or replace this facility, at the best
available terms, on expiry.
(A) Alternative Performance Measure.
Access to this credit facility provides the Portfolio 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 Portfolio 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 4.1% and 7.4%, ending the
financial year at 6.1% (2023: 5.6%).
Revised Management Fee Arrangements
As recently announced, with effect from 1st April 2024, the Company's Manager
agreed to reduce its investment management fee. The investment management fee
will be charged at the rate of 0.85% (previously 1%) per annum on the net
asset value of the Company's portfolio up to £150 million, and at the rate of
0.75% thereafter.
The revised fee agreement balances the need for the Company's ongoing charges
ratio to remain competitive, whilst rewarding the Manager for its efforts.
Investment Manager Personnel Changes
The Board was informed by JPMAM that Naohiro Ozawa, one of the Company's
Portfolio Managers, would be stepping down as Portfolio Manager to the Company
with effect from 1st April 2024. Miyako Urabe and Xuming Tao will continue to
manage the assets of the Company. On behalf of the Board, I would like to
express our sincere gratitude to Naohiro for his contribution to the
management of the Company's portfolio and wish him well in his future
endeavours.
The Board and Corporate Governance
The Board reviews its composition on a regular basis, giving due account to
the need to refresh its membership and maintain diversity, whilst also
ensuring the necessary degree of continuity of Board experience. Yuuichiro
Nakajima, a member of the Board since April 2014 retired from the Board
following the conclusion of the Company's AGM held in July 2023. On behalf of
the Board and the shareholders I would like to thank Yuuichiro for his
dedication to the Company since his appointment. Deborah Guthrie, who became a
Director in 2015, has indicated that she wishes to retire at the conclusion of
the Company's AGM in July 2024. The Board has benefited immensely from
Deborah's commitment to the role and her specialist knowledge of the Japanese
market. She will leave with our gratitude and best wishes for the future. The
Board has commenced the search for a new Non-Executive Director.
In accordance with good corporate governance practice, all Directors, with the
exception of Deborah Guthrie, will stand for re-election at the forthcoming
AGM.
Shareholders who wish to contact the Chair or other members of the Board may
do so through the Company Secretary or the Company's website, details of which
appear below.
Task Force on Climate-related Financial Disclosures
As a regulatory requirement for the Company's Manager, on 30th June 2023,
JPMAM published its first UK Task Force on Climate-related Financial
Disclosures ('TCFD') Report for the Company in respect of the year ended 31st
December 2022. The report discloses estimates of the Company's portfolio
climate-related risks and opportunities according to the Financial Conduct
Authority ('FCA') Environmental, ESG Sourcebook and the TCFD. The report is
available on the Company's website under the ESG documents section.
This is the first report under the new guidelines and disclosure requirements.
The Board is aware that best practice reporting under TCFDs is still evolving
with respect to metrics and input data quality, as well as the interpretation
and implications of the outputs produced, and will continue to monitor future
developments.
Stay Informed
The Company delivers email updates on the Company's progress 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://tinyurl.com/JSGI-Sign-Up or by scanning the QR code in the Annual
Report.
Annual General Meeting
The Company's AGM will be held on Thursday, 25th July 2024 at 12.00 noon at 60
Victoria Embankment, London EC4Y 0JP.
We are delighted to invite shareholders to join us in person for this event,
to hear from the Portfolio Managers, who will make a presentation to
shareholders 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 92 to 95 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
The Board is positive about the Company's prospects for several reasons.
Foremost signs that the Japanese economy is emerging from its long period of
deflation are most welcome. Rising wages should also encourage consumer
spending, while exporters are enjoying the competitive benefits of the weak
yen. Other structural trends, including digitalisation, de-carbonisation,
changing demographics and technological innovation all augur well for
productivity and profits over the medium term. As well, ongoing reforms to
Japan's corporate governance also promise to drive increases in shareholder
returns for years to come. Despite these positives, equity valuations are
still relatively low compared to other markets or relative to the market's own
history. After years of disinterest, it is gratifying to see that recent
developments in the Japanese equity market seem to be finally capturing the
attention of investors, including international investors.
In short, Japan's investment environment is more congenial than it has been
for some time, especially for innovative smaller companies with exposure to
the structural changes underway across the economy. The Board believes that
the Portfolio Managers' focus on quality and growth, supported by JPMorgan's
extensive, global and Tokyo-based research resources, mean that the Company is
ideally placed to identify and capitalise on the many interesting
opportunities this environment is generating for smaller cap businesses. We
therefore share the Portfolio Managers' confidence in the Company's ability to
deliver attractive levels of capital growth, combined with a regular income,
to shareholders over the long term.
Alexa Henderson
Chair
20th June 2024
Investment Manager's Report
Performance and Market Review
The 12-month period to March 2024 was another difficult year for the Company's
relative performance, following the underperformance of the two previous
years, although on an absolute basis the Company continues to claw back some
of its previous losses, and, during the past year, it made a positive absolute
return. The Company produced a total return on net assets of +5.0% over the
period, while the benchmark, the MSCI Japan Small Cap Net Return Index (in
sterling terms), produced a total return of +12.0%, meaning the Company
underperformed the benchmark by 7.0%. The MSCI Japan Small Cap Growth index
which better reflects the Company's portfolio rose by 6.6% during this period.
Historically, the Japanese equity market has been under-owned, but it has come
back into focus over the past year, and encouragingly the Nikkei Index reached
its highest levels in 34 years earlier this year. Key reasons for the positive
market sentiment include: ongoing improvements in corporate governance, signs
that the economy is finally emerging from a long period of deflation, and a
weaker Japanese yen, which is supporting export earnings.
Corporate governance reforms are no longer a new story. Developments on this
front have been underway over the past decade, thanks in large part to the
Corporate Governance Code introduced in 2015. The reforms have delivered
rising shareholder returns, via increased dividends and share buybacks, and
greater board independence and transparency. However, recently we have
witnessed further pressure on corporates to improve their governance. Early in
2023, the Tokyo Stock Exchange (TSE) announced initiatives requiring
corporates whose share price is consistently below 1x price to book to take
steps to raise their valuations. Since then the Financial Services Authority
(FSA) has urged non-life insurance companies to sell their strategic
shareholdings, following a price fixing scandal. Such strategic shareholdings
have long been viewed as problematic for corporate governance and capital
efficiency.
Japan is also finally seeing some modest upward pressure on prices and wages,
which led the Bank of Japan (BoJ) to begin raising interest rates in March
2024, for the first time in seventeen years. This is consistent with market
expectations for a gradual normalisation of the BoJ's ultra-loose monetary
policy, although expectations are not for aggressive monetary tightening.
While the broader Japanese equity market has performed well, value stocks have
continued to outperform growth as interest rates remain high globally. Large
caps have also been in favour compared to small caps, thanks in part to
foreign buying. In addition, the weaker Japanese yen has increased the appeal
of exporters, which are mainly large cap stocks.
These developments have adversely impacted the Company's performance, given
its bias towards quality and growth stocks and its focus on smaller cap
companies. While we are very disappointed to report another year of weak
relative performance, 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. We
continue to believe this is an attractive area of the market in which to
invest over the long term, as the sector includes many interesting businesses
geared towards new technology and themes such as e-commerce and
digitalisation, technology hardware, and healthcare. We intend to maintain our
current investment strategy.
Performance attribution
Year ended 31st March 2024
% %
Contributions to total returns
Benchmark return 12.0
Sector allocation -1.4
Stock selection -6.1
Gearing/cash 1.7
Return relative to benchmark -5.8
Portfolio return 6.2
Management fee/other expenses -1.2
Return on net assets(A) 5.0
Return to shareholders(A) 2.3
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 Alternative Performance Measures is provided on pages
96 and 97 of the Annual Report.
Spotlight on sectors and stocks
Our bias towards growth and quality companies means that the portfolio differs
substantially from the benchmark. This variance can often lead to notable
volatility in performance relative to the benchmark over the short term, as we
have seen in recent years.
During the 12 months under review, both our sector allocation and stock
selection decisions had a negative impact on performance.
The biggest positive contributors at the sector level include our overweight
in Semiconductors & Semiconductor Equipment and Materials, and our
underweight in Equity Real Estate Investment Trusts (REITs). We are positive
on the semiconductor supply chain, as we expect the sector to see sustained
growth in demand over the long term, backed by structural trends such as the
rapid spread of artificial intelligence (AI), the growth of the internet of
things (IoT), and the increasing use of electronics in vehicles. Our holdings
in Materials include a broad range of quality companies with strong
competitive positions, ranging from industrial gas producers to the suppliers
of key materials used in the healthcare space. The underweight to REITs is
driven by the lack of attractive growth stories in this area of the market.
On the other hand, the main detractors at the sector level were our
underweight position in Banks and overweight positions in Software &
Services and Commercial & Professional Services. Banks performed strongly
in response to the BoJ's gradual monetary policy normalisation. While
increased interest rates will likely support banks' earnings, it is difficult
to find any legacy banks with sustainable long-term growth opportunities, or
clear competitive advantages. The only bank stock we own is Rakuten Bank,
which is a fast-growing online bank with the ability to leverage the broader
Rakuten group ecosystem to acquire new business. We continue to believe that
the Software & Services sector offers many attractive opportunities,
especially related to digitalisation, where demand will remain strong over the
mid/long-term, as Japan plays catch-up with other major economies in areas
such as e-commerce, cloud software services and cashless payments.
At the stock level, several names made significant positive contributions to
returns, including Nippon Sanso, Sanwa Holdings and OSAKA SODA:
• Nippon Sanso is Japan's number one supplier of industrial gas and the
fourth largest supplier in the world. We believe that industrial gas is an
attractive industry, with high barriers to entry, increasingly consolidated
market shares, strong cashflow generation and a favourable pricing
environment. Nippon Sanso has been successfully expanding its presence both
organically and through M&A activity. Over the past year, the industrial
gas industry has continued to demonstrate strong pricing power under an
inflationary environment, with successful price hikes globally.
• Sanwa Holdings is the number one shutter maker in Japan. The domestic
market is very stable, dominated by three companies, and Sanwa has the
strongest position with over 50% market share. The company also has a presence
in the US and Europe, mainly through acquisitions. While the end-demand is
cyclical, the company is very well managed, with consistently positive free
cashflow, steady margins and proactive shareholder returns. Execution on
pricing strategy through the current inflationary environment has also been
strong.
• OSAKA SODA is a chemical company that holds the top global position in
multiple niche product categories. The company's biggest future growth driver
is silica gel, which is used in the production of obesity drugs. OSAKA SODA
has the largest share of the world market for this material, and profitability
is very high, as the obesity drug market is growing rapidly. The company is
currently expanding its manufacturing capacity accordingly. Developments on
the governance front are also positive. The company has announced a
medium-term plan to enhance its shareholder return policy and it is now
targeting a total payout ratio of 40%, compared to around 20% previously.
Unfortunately, the positive performance effect of these stock selection
decisions was more than offset by the adverse impact of other positions,
notably Milbon, Taiyo Yuden and Square Enix. However, these names all remain
in the portfolio due to our still favourable assessments of their longer-term
growth prospects.
• Milbon is Japan's number one manufacturer of salon exclusive hair care
products. With a strong consulting sales approach, the company has been
expanding market share at home, and abroad, including in China and Korea. In
the near-term, rising raw material costs have dampened profitability, but our
positive assessment of Milbon's positioning, and its scope to expand both
domestically and overseas, remains unchanged. The company has recently
announced plans to raise prices.
• Taiyo Yuden manufactures electronic components such as multi-layer
ceramic capacitors (MLCCs) used in cars and industrial equipment. It is
benefiting from rapid technological innovation in the auto industry, including
the rising popularity of electric vehicles, autonomous driving, and 'connected
cars' that use mobile internet technology. This is translating into
significant potential demand for high quality MLCCs over the medium term. In
the near-term, however, demand has been sluggish for all MLCC makers due to an
inventory correction.
• Square Enix develops and publishes video game software, including
long-running titles from its Dragon Quest and Final Fantasy IPS. A
consistently rising digital download ratio is a favourable industry trend, as
digital downloads have higher profitability than packaged games thanks to
easier and much cheaper distribution. Square Enix possesses strong
intellectual property in the form of a library of popular games and is thus
set to benefit from this trend. Near-term earnings have, however, been
disappointing, with weaker than expected title sales. The new CEO is focusing
on raising profitability to improve the business's performance, and we will
monitor execution going forward.
About our investment philosophy
The Company aims to provide shareholders with access to the innovative and
fast-growing smaller companies at the core of the Japanese economy. Our
investment approach favours quality and structural growth, and we target
companies - other than Japan's largest 200 - which we believe can compound
earnings growth over the long term, supported by strong competitive
advantages, good management teams and judicious capital allocation. We believe
the strong and durable market positioning of such businesses will allow them
to substantially increase their intrinsic value over time. We avoid stocks
that have no clear differentiation and those that operate in industries
plagued by excess supply and structural decline.
Our stock selection is based on fundamental analysis, '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 two,
supported by over 20 Tokyo-based investment professionals. Their knowledge of
the local market provides us with what we believe to be a significant
competitive advantage in identifying investment opportunities in small cap
companies - a sector of the market which is under-researched and overlooked by
many investors.
The starting point in our bottom-up investment process is our 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, Standard or Challenged to each stock, based on its
fundamentals, governance and the viability of its revenues over the long term.
We aim to have a high exposure to Premium and Quality companies, and where
possible, we invest from an early stage, to benefit fully as companies realise
their growth potential.
This patient approach is key to generating excess return over the long term,
although the portfolio's focus on quality and growth means it tends to
struggle during value rallies. Having said that, the Company does not target
'growth at any price'. We always strive to acquire shares 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. We believe it is also
important to construct a well-balanced, diversified portfolio, to minimise
exposure to unintended risks. The Company's current and prospective portfolio
holdings encompass a broad range of sectors, including not only IT hardware
and software, but materials, chemicals, construction, machinery and consumer
goods and services.
We believe that well-run companies, which exhibit behaviour that respects the
environment and the interests of their shareholders, customers, employees and
other stakeholders, are most likely to deliver maintainable, long-term
returns. Such environmental, social and governance ('ESG') considerations are
thus integral to our investment process and a key driver of our quest to
generate financial returns. Financially material ESG factors influence our
decisions both at the portfolio construction stage and thereafter, once
companies are held in the portfolio, when ongoing engagement with managers can
be effective in encouraging them to realise and maintain acceptable ESG
standards. Our long-term holding in DTS, a business information services
provider, is one instance where our engagement with a company has resulted in
considerable progress in its corporate governance practices, including, in
DTS's case, in greater board independence and diversity and a better
shareholder return policy.
Trends and themes
While our decisions are based on company-specific factors, there are also
structural, long-term trends and themes that underlie and inspire much of our
stock selection.
The investment themes which help shape the portfolio include:
• Changing demographics: Japan's ageing and declining population is
creating significant challenges for Japanese policymakers. The government is
committed to tackling these issues through regulatory reforms and greater use
of technology, and this is providing opportunities for innovative smaller
companies working to improve the quality of life for the elderly, for example,
by reducing the need for face-to-face medical consultations. The telemedicine
company, Medley, is an example of a portfolio holding benefiting from such
innovation.
• Raising labour productivity via digitalisation: Japan's ageing
population profile is also leading to a contraction in labour supply, and
technology is a key part of the solution to this problem, as it raises labour
productivity. The government wishes to encourage the adoption of digital
technology across the economy, and to this end it has established an agency
which is focused on digitalising the operations of national and local
governments, as well as Japan's education and healthcare systems. Portfolio
holdings Rakus, a cloud services provider, and Infomart, a
business-to-business trading platform for the food industry, are examples of
holdings that benefit from this long-term trend.
• Technological innovation: While certain areas of the Japanese economy
lag other markets in terms of their technological sophistication, Japan's
manufacturers are world class. The country is a leading global supplier of
factory automation equipment, robots, electronics parts and materials,
presenting attractive investment opportunities for portfolio companies such as
MEC and Rorze that specialise in niche technology markets.
• De-carbonisation: The Japanese government's commitment to reduce
carbon emissions to net zero by 2050 has galvanised efforts to transition the
economy to renewable energy sources and take other necessary steps to mitigate
climate change. Some smaller Japanese companies possess unique technologies
related to the production of electric vehicles, solar and wind power and other
forms of clean energy, and we continue our search for companies such as
Canadian Solar Infrastructure Fund that are well-positioned to benefit from
the global push towards carbon neutrality.
• Overseas growth: The Asian region is experiencing rapid structural
growth. Japanese luxury goods producers and other strong brands captured by
our investments in Milbon, a supplier of exclusive hair products (discussed
above), and watchmaker Seiko, are likely to continue experiencing strong
demand from new customers in China, Korea, India and other increasingly
prosperous Asian countries.
• Corporate governance: Japan's corporate sector is making a concerted
effort to strengthen governance standards via enhanced shareholder returns,
the appointment of more independent, external directors to company boards,
tighter internal controls and more transparent disclosure rules. As discussed
above, the Japanese authorities, and the TSE, continue to encourage these
efforts and there is room for further improvement. We engage in constructive
dialogues with portfolio companies and potential investments on this broad
theme, on the view that the market is likely to keep rewarding companies that
upgrade their governance practices.
Portfolio Activity
Key new purchases during the reporting period included Azbil, LIFEDRINK and
Sohgo Security Services.
• Azbil is a building solutions provider. The company provides
integrated solutions for building control systems, including architectural
design, efficient and environmentally friendly heating and cooling systems and
custom-made key components, as well as on and off site management and
maintenance services. Azbil is the dominant player in Japan, with a domestic
market share of 80%, and it is a very steady and recurring business with
maintenance and repairs accounting for 70% of its activities. We see a
continued healthy business environment as customers focus increasingly on
energy saving solutions.
• LIFEDRINK is a beverage company focused on private label products for
retailers. The company has a vertically integrated business model which allows
it to offer lower prices and enjoy higher margins. We believe the company has
a healthy growth runway, as the Japanese market for private label products is
still under-developed compared to overseas markets such as US, and the
inflationary environment is ensuring strong demand, as consumers prefer the
company's lower priced items to national brands.
• Sohgo Security Services is a security service provider focused on the
installation of sensors and monitoring equipment and station security services
for home and commercial use. The company has the second largest share of the
domestic market and is expected to gradually build on this thanks to
regulation that favours largescale players. The business has defensive
characteristics and has also recently started to increase shareholder returns,
although we believe there is potential for further progress on this front
given its net cash position.
To fund these and other acquisitions, our largest divestments over the past
year included Marui Group, Paltac and Nextage. We continue to believe retailer
Marui Group has made excellent progress in recent years by shifting its retail
business to a lower risk model and focusing on its finance business, while
stepping up shareholder returns, including via a large scale buyback. However,
as this story has now largely played out, we have used this position as a
source of cash for new ideas. Paltac is the domestic number one wholesaler for
daily necessities and toiletries. We expect the company will continue to
expand market share and execute topline growth, but we closed the position as
we have some concerns over rising labour costs. Nextage is one of Japan's top
three used car sellers. The used car market is highly fragmented, with scope
for consolidation over the long-term, and Nextage has been expanding through
new store openings. However, there have been media reports of fraudulent
insurance claims by various companies within the industry, including Nextage,
so we exited the position.
Outlook and strategy
After a long period of being unloved and under-owned, we are optimistic about
the outlook for both Japanese equities and our portfolio. We believe the
global investment community's perception of the Japanese market is starting to
improve, with the key structural supports being the continued progress on
corporate governance reforms and signs of an exit from deflation.
Reforms to corporate governance over the past few years (as highlighted in the
Performance and Market Review section above) have already lifted shareholder
returns, and with many Japanese companies still awash with cash, we expect
further significant efforts to return cash to shareholders, and increase
investment returns accordingly. This expectation is based on our conversations
with hundreds of companies. We sense an acceleration in corporate reform
efforts this year, particularly after the Tokyo Stock Exchange's (TSE)
initiatives announced last year. We anticipate further broad-based progress on
the corporate governance front, not only by companies trading below book
value. Balance sheet inefficiency is an issue across the Japanese market, and
even high-quality companies with strong competitive positions have room to up
their game, and shareholder returns will rise accordingly. The portfolio's
exposure to several other significant, very positive, long-term structural
trends should provide further impetus to performance over the longer term.
There are also signs the country is finally emerging from a long period of
deflation. The spring wage negotiations, also known as the Shunto, agreed to a
5.3% wage increase this year, which is the highest level in the past three
decades, and well ahead of inflation. A rise in real wages should help to
boost consumer sentiment and domestic demand and hopefully eradicate
consumers' deflationary mindset.
All these factors - in particular the longer-term potential for improved
shareholder returns - bode well for Japanese equities. Meanwhile, despite the
market's positive prospects, Japanese equity valuations do not look demanding,
either compared to other major markets, or relative to the market's own
history. With valuations at attractive levels, and global investors still
mostly underweight Japanese equities, even after last year's net investment,
prospects appear bright. This is especially the case for small caps with
growth characteristics.
We are well-positioned to benefit from this favourable environment. Japan's
smaller and more entrepreneurial companies are at the forefront of innovation.
Many are global leaders set to prosper over the long term. Yet, the sell side
coverage for such exciting small and mid-cap companies remains limited. This
gives us a considerable competitive advantage, as our large and dedicated team
of Japanese equities analysts and fund managers based on the ground in Tokyo
is ideally placed to discover exciting investment opportunities amongst
smaller companies, and to capitalise on the long-term structural changes
playing out in Japan. We therefore remain confident our investment approach
and portfolio positioning will deliver positive and sustained returns to our
shareholders over the medium and long term.
Thank you for your ongoing support.
For and on behalf of
JPMorgan Asset Management
Investment Manager
Miyako Urabe
Xuming Tao
Portfolio Managers
20th June 2024
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 ã
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 a lack of demand for the Company's Manager, with a defined investment appraisal process. The Board relies on the The risk remains high due to the Company's under performance during the year.
shares and leading to the shares trading on a wider discount. Investment Manager's skills and judgment to make investment decisions based on The Portfolio Managers continue to work to improve the Company's performance
research and analysis of individual stocks and sectors. To aid appropriate against its benchmark index.
investment decisions, the Board has set investment guidelines and parameters
for the portfolio managers to follow; these are discussed and reviewed at
regular intervals. The AIFM also monitors the Investment 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 â
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 The risk remains high but unchanged. The risk remains high subsequent to the
reported on by JPMF. The Board monitors the implementation and results of the recent developments in the Japanese equity market as discussed in the
investment process with the Manager. However, the fortunes of the portfolio Investment Manager's Report, which has adversely impacted the Company's
are significantly determined by market movements in Japanese equities, the performance due to its bias towards quality and growth stocks.
rate of exchange between the Japanese yen and sterling and interest rate
changes. This is a risk that investors take having invested into a single
country fund. The Board recognises the benefits of a closed-end fund structure
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 Investment Manager's accounting, dealing or On 1st July 2014, the Company appointed Bank of New York Mellon â
payments systems or the custodian's or depositary's records could prevent (International) Limited to act as its depositary, responsible for overseeing
accurate 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 unchanged. The operational requirements of the Company,
cash flows. Details of how the Board monitors the services provided by the including from its key third-party service providers, have been subject to
Investment Manager and its associates and the key elements designed to provide rigorous testing. To date the operational arrangements have proven robust and
effective internal control are included in the Risk Management and Internal key third-party service providers have not experienced significant operational
Control section of the Corporate Governance Report on pages 50 and 51 of the difficulties.
Annual Report.
To date the Investment Manager's cyber security arrangements have proven
As an externally managed investment trust, there is a continued reliance on robust and the Company has not been impacted by any cyber attacks threatening
the Investment Manager and other third-party service providers. its operations.
The Board reviews the overall performance of the Investment 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 Investment 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 portfolio managers or several members of the wider The Investment Manager takes steps to reduce the likelihood of such an event â
investment management team could result in a short-term deterioration in by ensuring appropriate succession planning and the adoption of a team based
investment performance. approach. Risk remains unchanged. The Investment Manager has ensured the portfolio is
managed by a robust portfolio management team i.e. the portfolio is co-managed
by two 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 ã
shares are said to be trading at a discount, leading to volatile returns for rating largely depends upon the relative attractiveness of the trust, the
shareholders. Board has authority to issue new shares or buy backs its existing shares when The risk has been heightened by the widening of the discount at which the
deemed by the Board to be in the best interests of the Company and its share price trades to NAV.
shareholders. The Board is committed to consider buying back the Company's
shares when/if they stand at anything more than a small discount to enhance Although the widening of the Company's discount is in line with the experience
the NAV per share for remaining shareholders. of other investment trusts, given the prolonged period of widened discount,
the Board resumed buybacks for the first time since March 2018.
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 â
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 28 of the Annual Report. Section 1158 subject to Capital Gains Tax. The Section 1158 qualification criteria are Risk remains unchanged. Compliance with relevant regulations is monitored on
requires, among other matters, that the Company does not retain more than 15% continually monitored by JPMF and the results reported to the Board each an ongoing basis by the Company Secretary and the Investment Manager who
of its investment income, can demonstrate an appropriate diversification of month. The Company must also comply with the provisions of the Companies Act report regularly to the Board.
risk and is not a close company. 2006 and, as its shares are listed on the London Stock Exchange, the UKLA
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 â
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 globally, may adversely affect the designed to affect it or not. The Board monitors and receives advice from the Risk remains unchanged. Political risks have always been part of the
Company either directly or because of restrictions or enforced changes on the Manager and other advisors on political and economic risks. investment process.
operations of the Investment Manager. JPMAM 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.
Geopolitical instability and Systematic Risk Geopolitical Risk is the potential for political, socio-economic (including There is little direct control of this risk possible. The Company addresses â
pandemic) and cultural events and developments to have an adverse effect on these global developments through regular questioning of the Manager and will
the value of the Company's assets. continue to monitor these issues as they develop. The risk remains high but unchanged. Geopolitical instability and systematic
risks are part of the investment process. In particular, geopolitical tensions
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 and global economic pressures continue to have an unfavourable impact on
particular concerns over global economic growth. The war in Ukraine objectives of the Company to mitigate the risks arising from geopolitical global markets.
immediately affected energy and commodity markets and the conflict in the concerns.
Middle East as well as heightened tensions in other parts of the world may
cause further damage to the global economy. Systematic risk is mitigated by the Investment Manager's controls and
procedures over areas such as counter-party risk. Further, areas such as
Systematic risk in the financial system is defined as 'a risk of disruption to gearing levels are closely monitored and subject to board-set limits.
financial services that is caused by an impairment of all or parts of the
financial system and has the potential to have serious negative consequences
for the real economy'.
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 â
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, efficiency and even viability of individual companies, to mitigate risk at the level of stock selection and portfolio construction. The risk remains high but unchanged due to the continued rising of
whole sectors and even asset classes. As extreme weather events become more common, the resiliency, business temperatures fueling environmental degradation, natural disasters, weather
continuity planning and the location strategies of the Company's services extremes, food and water insecurity and economic disruption.
providers will come under greater scrutiny.
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 the Manager
Details of the management contract are set out in the Directors' Report on
page 45 of the Annual Report. The management fee payable to the Manager for
the year was £1,811,000 (2023: £1,856,000) of which £nil (2023: £nil) was
outstanding at the year end.
Included in administration expenses in note 6 on page 76 in the Annual Report
are safe custody fees payable to JPMorgan Chase group subsidiaries amounting
to £16,000 (2023: £16,000) of which £2,000 (2023: £6,000) was outstanding
at the year end.
The Manager may carry out some of its dealing transactions through group
subsidiaries. These transactions are carried out at arm's length. The
commission payable to JPMorgan Securities Limited for the year was £nil
(2023: £nil) of which £nil (2023: £nil) was outstanding at the year end.
Handling charges on dealing transactions amounting to £6,000 (2023: £5,000)
were payable to JPMorgan Chase Bank N.A. during the year of which £1,000
(2023: £1,000) was outstanding at the year end.
At the year end, total cash of £3,083,000 (2023: £7,446,000) was held with
JPMorgan Chase. A net amount of interest of £5,000 (2023: £3,000) was
receivable by the Company during the year from JPMorgan Chase of which £nil
(2023: £nil) was outstanding at the year end.
Transactions with related parties
Full details of Directors' remuneration and shareholdings can be found on
pages 57 and 58 and in note 6 on page 76 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
Chair
20th June 2024
Statement of Comprehensive Income
For the year ended 31st March
2024 2023
Revenue Capital Total Revenue Capital Total
£'000 £'000 £'000 £'000 £'000 £'000
Gains/(losses) on investments held at fair value
through profit or loss - 6,064 6,064 - (15,007) (15,007)
Net foreign currency gains - 1,833 1,833 - 619 619
Income from investments 4,218 71 4,289 4,736 41 4,777
Other interest receivable 5 - 5 3 - 3
Gross return/(loss) 4,223 7,968 12,191 4,739 (14,347) (9,608)
Management fee (1,811) - (1,811) (1,856) - (1,856)
Other administrative expenses (487) - (487) (472) - (472)
Net return/(loss) before finance costs
and taxation 1,925 7,968 9,893 2,411 (14,347) (11,936)
Finance costs (301) - (301) (321) - (321)
Net return/(loss) before taxation 1,624 7,968 9,592 2,090 (14,347) (12,257)
Taxation (422) - (422) (500) - (500)
Net return/(loss) after taxation 1,202 7,968 9,170 1,590 (14,347) (12,757)
Return/(loss) per share 2.21p 14.63p 16.84p 2.92p (26.32)p (23.40)p
All revenue and capital items in the above statement derive from continuing
operations. No operations were acquired or discontinued in the year.
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.
The net return/(loss) after taxation represents the profit/(loss) for the year
and also the total comprehensive income.
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 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 - - - (7,958) - - (7,958)
At 31st March 2023 5,595 33,978 1,836 262,994 (99,107) (9,274) 196,022
Repurchase of shares into Treasury - - - - (508) - (508)
Net return - - - - 7,968 1,202 9,170
Dividends paid in the year - - - (7,733) - - (7,733)
At 31st March 2024 5,595 33,978 1,836 255,261 (91,647) (8,072) 196,951
(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
2024 2023
£'000 £'000
Fixed assets
Investments held at fair value through profit or loss 209,011 206,931
Current assets
Debtors 2,024 3,412
Cash and cash equivalents 3,083 7,446
5,107 10,858
Creditors: amounts falling due within one year (17,167) (21,767)
Net current liabilities (12,060) (10,909)
Total assets less current liabilities 196,951 196,022
Net assets 196,951 196,022
Capital and reserves
Called up share capital 5,595 5,595
Share premium 33,978 33,978
Other reserve 255,261 262,994
Capital redemption reserve 1,836 1,836
Capital reserves (91,647) (99,107)
Revenue reserve (8,072) (9,274)
Total shareholders' funds 196,951 196,022
Net asset value per share 362.4p 359.6p
Statement of Cash Flows
For the year ended 31st March
2024 2023
£'000 £'000
Cash flows from operating activities
Net return/(loss) before finance costs and taxation 9,893 (11,936)
Adjustment for:
Net (gains)/losses on investments held at fair value through profit or (6,064) 15,007
loss
Net foreign currency gains (1,833) (619)
Dividend income (4,289) (4,777)
Interest income (5) (3)
Realised (gain)/loss on foreign exchange transactions (876) 25
Decrease in accrued income and other debtors 16 92
Decrease in accrued expenses 37 15
Net cash outflow from operating activities before dividends, interest and tax (3,121) (2,196)
Dividends received 4,451 4,396
Interest received 5 3
Overseas tax paid (422) (473)
Net cash inflow from operating activities 913 1,730
Purchases of investments (70,208) (46,467)
Sales of investments 73,473 55,328
Net cash inflow from investing activities 3,265 8,861
Dividends paid (7,733) (7,958)
Repurchase of shares into Treasury (508) -
Repayment of bank loan - (4,844)
Interest paid (300) (340)
Net cash outflow from financing activities (8,541) (13,142)
Decrease in cash and cash equivalents (4,363) (2,551)
Cash and cash equivalents at start of year 7,446 10,143
Unrealised loss on foreign currency cash and cash equivalents - (146)
Cash and cash equivalents at end of year 3,083 7,446
Cash and cash equivalents consist of:
Cash and short-term deposits 3,083 7,446
Total 3,083 7,446
Notes to the Financial Statements
For the year ended 31st March 2024
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 53 and 54 of the Directors' Report 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. Dividends
(a) Dividends paid and declared
2024 2023
Pence £'000 Pence £'000
Dividends paid
Fourth quarterly dividend for 2023 paid to shareholders in May 3.6 1,962 4.0 2,180
First quarterly dividend paid to shareholders in August 3.5 1,908 3.4 1,854
Second quarterly dividend paid to shareholders in November 3.5 1,906 3.6 1,962
Third quarterly dividend paid to shareholders in February 3.6 1,957 3.6 1,962
Total dividends paid in the year 14.2 7,733 14.6 7,958
2024 2023
Pence £'000 Pence £'000
Dividend declared
Fourth quarterly dividend payable to shareholders in May 3.6 1,956 3.6 1,962
All dividends paid and declared in the period have been funded from the
Revenue Reserve.
The fourth quarterly dividend has been declared in respect of the year ended
31st March 2024. In accordance with the accounting policy of the Company,
these dividends will be reflected in the financial statements for the year
ending 31st March 2025.
(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.
2024 2023
Pence £'000 Pence £'000
First quarterly dividend 3.5 1,908 3.4 1,854
Second quarterly dividend 3.5 1,906 3.6 1,962
Third quarterly dividend 3.6 1,957 3.6 1,962
Fourth quarterly dividend 3.6 1,956 3.6 1,962
Total 14.2 7,727 14.2 7,740
3. Return/(loss) per share
2024 2023
£'000 £'000
Return per share is based on the following:
Revenue return 1,202 1,590
Capital return/(loss) 7,968 (14,347)
Total return/(loss) 9,170 (12,757)
Weighted average number of shares in issue during the year (excluding
Treasury shares) 54,473,070 54,510,339
Revenue return per share 2.21p 2.92p
Capital return/(loss) per share 14.63p (26.32)p
Total return/(loss) per share 16.84p (23.40)p
4. Net asset value per share
2024 2023
Net assets (£'000) 196,951 196,022
Number of shares in issue, excluding shares held in Treasury 54,344,222 54,510,339
Net asset value per share 362.4p 359.6p
JPMORGAN FUNDS LIMITED
21st June 2024
For further information, please contact:
Divya Amin
For and on behalf of
JPMorgan Funds Limited
0800 20 40 20 or +44 1268 44 44 70
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 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.
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