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JPMorgan Multi-Asset Growth & Income - New policy bearing fruit

There are many investors looking for high and growing income and a modest level of capital growth. JPMorgan Multi-Asset Growth & Income (MATE), with a portfolio diversified across a range of different asset classes, was designed with this in mind.
MATE was established about three and a half years ago. As the trust approached its third anniversary, the board took stock. The long-term performance objective of 6% per annum total returns on average over five years seemed to be on track. However, the board was concerned that a requirement that dividend payments be covered by net earnings was too restraining for the managers. MATE’s returns were lagging its peer group.
By removing this constraint, MATE’s manager can focus on the overall total return, including income, without having the restriction of needing to target investments that provide a particular income level, which means that it is no longer be fighting with one hand tied behind its back.
Equally importantly, MATE would be able to commit to growing its dividend at least in-line with inflation (as measured by UK CPI). We believe that this is a powerful selling point for investors who have been scarred by the last year’s events, where many companies and investment vehicles slashed their dividends.
This note sets out the managers’ approach to delivering on the objective and explores what has been driving returns to date.