JPMorgan Japanese IT boasts 41% total returns

Despite COVID uncertainty, FTSE 250 listed JPMorgan Japanese Investment Trust (LON:JFJ) boasted ‘very strong returns’ during the financial year ended 30 September 2020.

The company said that its benchmark, the TOPIX, had fallen by as much as 30% by late March, having hit an all-time-high just four months prior.

Despite this, the company reported that its return on assets was +35%, which it said represented a ‘remarkable outperformance’ of the benchmark which only returned +2%. Likewise, its share price to NAV narrowed, seeing its discount ratio fall from 11.4%, to 7.0%. These two developments mean that – with dividends accounted for – existing JPMorgan Japanese Investment Trust (JIT) shareholders saw a total return of 41.8% for the full-year.

Meanwhile, the company also noted that during the February/March sell-off, its portfolio fell by around 23%, though it said this kind of drop represented around half of that experienced by equivalent trusts. The fund added that this performance means that it has now achieved a three, five and ten-year cumulative NAV outperformance of the TOPIX, of +49.1%, +74.7% and +168.2% respectively.

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JPMorgan JIT continued, saying that its achievements are being increasingly recognised by analysts. For instance, Morningstar awarded the company its highest Analyst rating and Sustainability rating among Japanese investment trusts, while Citywire awarded it the ‘Best Japanese Equities Trust’.

Speaking on its outlook for the future, following a successful year, JPMorgan JIT’s management report said: “Whatever challenges lie ahead, Japanese companies remain relatively well positioned with their robust net cash balance sheets. This is even more true for your Company’s holdings. The companies we have invested in have strong structural growth outlooks and we are positive about their prospects on a long-term basis. We believe they are well positioned to benefit from future trends, many of which COVID-19 and government policy may well accelerate.”

“Even though the Company has delivered very strong returns this year, we still believe that the long-term outlook for the stocks we own is materially better than for those that we don’t own. The portfolio differs substantially from the benchmark index, so there will be times when our relative performance suffers. However, we are confident that, over the long term, our positioning should deliver better returns than the benchmark and will continue to reward patient investors wishing to invest in the next generation of Japanese ideas.”

The JPMorgan JIT has an ongoing charges figure of 0.68% and an annual charge of 0.65%. Its shares are currently trading down 0.17% on Wednesday, at 711.01p apiece. The Marketbeat community offers a 57.80% ‘outperform’ rating on the fund.

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