Half-Year Results 2018

RNS Number : 1148X

JPMorgan American IT PLC

08 August 2018

 

LONDON STOCK EXCHANGE ANNOUNCEMENT

JPMORGAN AMERICAN INVESTMENT TRUST PLC

UNAUDITED HALF YEAR RESULTS 

FOR THE SIX MONTHS ENDED 30TH JUNE 2018

Legal Entity Identifier: 549300QNAI4XRPEB4G65

Information disclosed in accordance with the DTR 4.2.2

CHAIR'S STATEMENT

Performance

In the six months to 30th June 2018, the total return on net assets per share in sterling terms was +4.2%. The return to Ordinary shareholders per share in sterling terms was +5.1%, reflecting a small narrowing of the Company's discount to net asset value per share ('NAV') at which it traded at the end of the period. The total return from the Company's benchmark, the S&P 500 Index in sterling terms, was +5.0%.

Share price and Discount Management

The Company's shares have traded at a discount to the NAV throughout the period under review and the Company has continued to buy back its shares in line with the Board's commitment to its shareholders to buy shares back when they stand at anything more than a small discount to NAV. The Company bought into Treasury a total of 7,960,319 shares (22.4 million shares for the same period in 2017), or 3.4% of the Company's issued share capital at the beginning of 2018. These shares were purchased at an average discount to NAV of 5.4%, producing a modest accretion to the NAV for continuing shareholders.

Dividend

Revenue generation for the full year ending 31st December 2018 is estimated to be marginally higher than 2017. The Company is declaring a dividend of 2.5 pence per share (2017: 2.25 pence) for the first six months of this year, which will be payable on 5th October 2018 to shareholders on the register on 31st August 2018. The Board will consider the rate of the final dividend when the revenue for the full year is confirmed.

Gearing and Repayment of Debenture Stock

The Company's gearing strategy is implemented through the use of bank borrowing facilities and, until June of this year, debenture stock. The debenture, which carried a fixed interest rate of 6.875%, had been in place since 2000 and the Company confirmed its repayment on 8th June 2018. The Board continues to consider the source, tenor and flexibility of the Company's debt requirements. Shareholders will be informed as and when additional sources of gearing are in place.

The Company's gearing policy is to operate within a range of 5% net cash to 20% geared in normal market conditions, with the present strategic level being set at 10% plus or minus 2%. In early May 2018, the Manager requested permission from the Board to adjust the tactical gearing level to 5% plus or minus 2%, given his belief that market conditions warranted such an adjustment. Having agreed to the request, the retirement of the debenture did not require any replacement borrowings as it was repaid out of the Company's own resources. On 30th June 2018 gearing represented 5% of net assets.

Outlook

The US economy has continued to grow well over the reporting period, supporting company profits, which have also benefited from the corporate tax cuts passed by Congress late last year. However, as intimated in my recent statements, we need to recognise that this present expansion cycle is very long lived, and this is likewise true for the stock market cycle it has supported. The Federal Reserve has been slowly raising short term interest rates and as expected this is having an effect on broader capital markets. In recognition of these realities the Board agreed with the Manager's request to adopt lower gearing in the Company as a tactical decision, when the long term debenture was repaid in June.

We expect success in stock picking to become even more important in the forthcoming market phase. In this regard the Manager's approach to stock selection, emphasising longer term value, and careful portfolio construction should be a positive and differentiating factor for investors in the Company.

Dr Kevin Carter

Chair                                                                                                                                          

8th August 2018

INVESTMENT MANAGER'S REPORT

Market Review

The U.S. equity markets in the first half of 2018 were up modestly, but showed a significant increase in volatility after an unusually mild 2017. The S&P 500 Index ended the first half at 2,718, up 2.7% in US dollar terms, including dividends, but down from the market highs reached in January. The forward P/E for the S&P 500 Index finished the half at 16.1x, in-line with the 25-year average for the Index.

Growth continued its strong performance relative to value, with the Russell 3000 Growth Index up 7.4% versus -1.26% for the Russell 3000 Value Index. Large cap stocks also underperformed small cap stocks, with the Russell 2000 Index coming in at 7.7%, some 5.0% ahead of the S&P 500 Index. The consumer discretionary and technology sectors led the other sectors, up 11.5% and 10.9%, respectively, with consumer staples and the telecom sectors down 8.65% and 8.4%, respectively.

The overall economic environment was strong over the course of the first half. Economic growth remained stable with first quarter real GDP up 2.8% year-on-year. Monthly data on retail sales, homebuilding, durable goods and other economic indicators suggest that second quarter GDP growth will maintain this trend, with current consensus estimates indicating continued growth. The Federal Reserve raised interest rates on two occasions during the first six months of the year in March and in June, bringing the Fed Funds target range to 1.75% - 2.00%. The FOMC raised forecasts for economic growth and inflation and cut the unemployment rate forecast for the next two years. Headline CPI for the month of May met expectations and increased 0.2% to 2.8% year-on-year, with core up 2.2% year-on-year. Earnings for U.S. public companies were up 27.3% year-on-year, with a record high level of companies exceeding consensus estimates.

In June, the U.S. administration announced plans to impose a 25% tariff on $50 billion worth of annual Chinese imports. This represents a fraction of total trade between the U.S. and China and only 0.3% of U.S. GDP, but the market is still working to get its arms around the potential implications for growth and profitability for global companies. For now the impact is modest, but any future escalation between the U.S. and China or any other major trade partner could affect growth and margins of U.S. companies, particularly large multi-national corporations.

Performance

The Company's net asset value rose by 4.2% in total return terms over the first six months of 2018. The return was below the benchmark, the S&P 500 Index, which rose 5.0% in sterling terms. The main driver of the current underperformance was the valuation tilt in the large cap portion of the Company. Offsetting this performance has been the contribution from the small cap portion of the Company and its strong growth emphasis. The large cap portion benefitted from stock selection in the energy and information technology sectors although this was more than offset by stock selection in the consumer discretionary sector.

The dramatic performance of growth versus value stocks over the last 23 years with this differential being near the peaks last seen in 2000.  Growth stocks are those considered to have the scope for substantial revenue growth in the future and so command a premium price.  Value stocks, on the other hand, comprise more well-established companies which whilst profitable do not have the same growth prospects.   Growth stocks have, since the end of the financial crisis, outperformed their value peers.  We do not believe this outperformance will continue.

The small cap growth portion of the portfolio delivered strong performance driven primarily by stock selection in the outperforming technology and health care sectors. With the market rising greater than the cost of debt over the period, gearing also contributed positively to relative performance.

Stock selection within the consumer discretionary and positioning within the consumer staples sectors generated the strongest headwinds to the performance of the overall portfolio. Within the consumer staples sector, our overweight position in Walgreens Boots featured among the largest detractors. Shares of Walgreens Boots fell during the period on news of Amazon's proposed acquisition of PillPack, amid fears that Amazon's entry into the pharmacy market would be detrimental to the industry's incumbents.

Within the consumer discretionary space, our overweight in Comcast also detracted from performance during the period as its shares fell following a hostile takeover bid for British satellite broadcaster Sky Plc in the second quarter. While investors weren't surprised that Comcast is pursuing M&A activity, the target caught market participants off guard.

PERFORMANCE ATTRIBUTION

FOR THE SIX MONTHS ENDED 30TH JUNE 2018

	%	%
Contributions to total returns
Net asset value total return (in sterling terms)		4.2
Benchmark total return (in sterling terms)		5.0
Excess return		-0.8
Contributions to total returns
Allocation effect	0.2
Selection effect	-1.7
Large cap portfolio		-1.5
Allocation effect	0.7
Selection effect	-
Small cap portfolio		0.7
Gearing		0.5
Cost of debt		-0.3
Currency hedge		-0.1
Share issuance/buyback		0.2
Management fee/expenses		-0.3
Total		-0.8

Source: JPMAM and Morningstar. All figures are on a total return basis.

Performance attribution analyses how the Company achieved its recorded performance relative to its benchmark index.

In the consumer discretionary sector, our underweight position in Amazon was the largest detractor at the individual stock level. Amazon's share price rose further after the firm posted revenue and earnings above consensus in late April. Results were driven by strong holiday sales and increased operating income from Amazon Web Services. Similarly, our underweight position in Netflix also weighed on performance. Shares in the firm rallied on the announcement that the company signed a multi-year production deal with the Obamas on content chronicling their time in office. While both are fine companies, we maintain our view that investors continue to pay a very dear price for the growth prospects of these stocks.

On the other hand, we believe that the shares of Apple and Microsoft are attractively priced. Indeed, the two largest individual positions in the portfolio featured among the top contributors to relative returns within the information technology space. Focusing on Apple first, the company delivered solid quarterly results, thanks to strength in the iPhone and in services, highlighting that Apple has effectively diversified its revenue stream. Additionally, the company delivered robust capital returns through a USD100 billion buyback authorisation and sizeable dividend increase. Despite strong share performance, Apple still sports an attractive valuation, especially considering its healthy cash position and proven track record of innovation. Microsoft is an example of a stock that has consistently featured among the largest overweight positions in the portfolio. The company has successfully transitioned itself towards the faster growing areas of the technology market while deemphasising the lower growth areas, lowering its cost base through this transformation. We view Microsoft as an attractive way to play the growth of cloud computing and the firm's management has proven to be excellent operator.

Energy contributed to overall performance as the sector gained on the heels of higher crude prices. After lagging the broader market during the first quarter, the energy sector bounced back in April on higher oil prices. The Department of Energy established solid momentum for energy names following a string of positive weekly petroleum status reports. Additionally, tensions with Iran and evidence that the Permian Basin may be slower to ramp up than people expected has contributed to upward pressure on oil prices, as Brent Crude touched highs not seen since late 2014. Given this positive backdrop, our overweight positions in ConocoPhillips, National-Oilwell Varco and Valero Energy all featured among the top contributors at the individual stock level.

With regards to portfolio positioning, the Company is most overweight in the energy, consumer staples and information technology sectors. We remain neutral in the utilities, telecom and consumer discretionary sectors, while the Company's biggest underweights are in the industrials, real estate and materials sectors, as we remain less excited about their long term growth prospects and unappealing valuation levels relative to other sectors.

Finally, a comment on gearing. The Company's level of gearing was 9% at the beginning of the year and ended the reporting period at 5%. This reflects an exercise undertaken in the period to review tactical gearing levels in the context of current market levels and forecast future returns. The outcome of this has been the adoption of a revised tactical gearing level of 5% with a 2% buffer either side of this central measure. This new gearing level has been achieved through the scheduled repayment of the Company's £50 million debenture.

Market Outlook

We continue to focus on the fundamentals for the economy and for company earnings. While healthy corporate earnings and sustained strength in economic indicators should provide continued support to the equity market, we are monitoring potential risks that could represent headwinds for US equity performance. In particular, the evolving global trade environment, rising interest rates and the changing shape of the yield curve add to near-term economic uncertainty and could add to market volatility as investors wait for increased clarity.

While we are disappointed with the recent performance of the large cap portion of the Company we remain firmly committed to our valuation centric focus. We know that having a valuation bias does not work all of the time but does work through time. This has proven to be beneficial to long term holders of the Company and we believe that it will be true in the future as well. Stock selection should become increasingly important as the current lengthy economic cycle ages and we will remain focused on the risk/return characteristics of the market in regards to our gearing levels.

Garrett Fish

Investment Manager                                                                                                                       

8th August 2018

INTERIM MANAGEMENT REPORT

The Company is required to make the following disclosures in its half year report.

Principal Risks and Uncertainties

The principal risks and uncertainties faced by the Company remain unchanged and fall into the following broad categories: investment and strategy; market; accounting, legal and regulatory; corporate governance and shareholder relations; operational; financial; political and economic. Information on each of these areas is given in the Business Review within the Annual Report and Accounts for the year ended 31st December 2017.

Related Parties Transactions

During the first six months of the current financial year, no transactions with related parties have taken place which have materially affected the financial position or the performance of the Company.

Going Concern

The Directors believe, having considered the Company's investment objectives, risk management policies, capital management policies and procedures, nature of the portfolio and expenditure projections, that the Company has adequate resources, an appropriate financial structure and suitable management arrangements in place to continue in operational existence for the foreseeable future and, more specifically, that there are no material uncertainties pertaining to the Company that would prevent its ability to continue in such operation existence for at least twelve months from the date of the approval of this half yearly financial report. For these reasons, they consider there is reasonable evidence to continue to adopt the going concern basis in preparing the accounts.

Directors' Responsibilities

The Board of Directors confirms that, to the best of its knowledge:

(i)      the condensed set of financial statements contained within the half year financial report has been prepared in accordance with FRS 104 'Interim Financial Reporting' and gives a true and fair view of the state of affairs of the Company, and of the assets, liabilities, financial position and net return of the Company as at 30th June 2018 as required by the UK Listing Authority Disclosure and Transparency Rules 4.2.4R; and

(ii)     the interim management report includes a fair review of the information required by 4.2.7R and 4.2.8R of the UK Listing Authority Disclosure and Transparency Rules.

In order to provide these confirmations, and in preparing these financial statements, the Directors are required to:

•        select suitable accounting policies and then apply them consistently;

•        make judgements and accounting estimates that are reasonable and prudent;

•        state whether applicable UK Accounting Standards have been followed, subject to any material departures disclosed and explained in the financial statements; and

•        prepare the financial statements on the going concern basis unless it is inappropriate to presume that the Company will continue in business;

and the Directors confirm that they have done so.

For and on behalf of the Board

Dr Kevin Carter

Chair                                                                                                                                      

8th August 2018

STATEMENT OF COMPREHENSIVE INCOME

FOR THE SIX MONTHS ENDED 30TH JUNE 2018

	(Unaudited)			(Unaudited)			(Audited)
	Six months ended			Six months ended			Year ended
	30th June 2018			30th June 2017			31st December 2017
	Revenue	Capital	Total	Revenue	Capital	Total	Revenue	Capital	Total
	£'000	£'000	£'000	£'000	£'000	£'000	£'000	£'000	£'000
Gains on investments held
at fair value through
profit or loss	-	33,533	33,533	-	44,125	44,125	-	97,734	97,734
Net foreign currency
(losses)/gains1	-	(2,568)	(2,568)	-	4,472	4,472	-	7,493	7,493
Income from investments	10,020	-	10,020	9,923	-	9,923	19,317	-	19,317
Interest receivable	156	-	156	66	-	66	177	-	177
Gross return	10,176	30,965	41,141	9,989	48,597	58,586	19,494	105,227	124,721
Management fee	(304)	(1,216)	(1,520)	(516)	(2,062)	(2,578)	(929)	(3,715)	(4,644)
Other administrative expenses	(299)	-	(299)	(354)	-	(354)	(653)	-	(653)
Net return on ordinary
activities before finance
costs and taxation	9,573	29,749	39,322	9,119	46,535	55,654	17,912	101,512	119,424
Finance costs	(475)	(1,900)	(2,375)	(430)	(1,719)	(2,149)	(909)	(3,636)	(4,545)
Net return on ordinary
activities before taxation	9,098	27,849	36,947	8,689	44,816	53,505	17,003	97,876	114,879
Taxation	(1,062)	-	(1,062)	(1,375)	-	(1,375)	(2,723)	-	(2,723)
Net return on ordinary
activities after taxation	8,036	27,849	35,885	7,314	44,816	52,130	14,280	97,876	112,156
Return per share (note 3)	3.54p	12.28p	15.82p	2.94p	18.04p	20.98p	5.93p	40.67p	46.60p

¹ Includes gains and losses on forward foreign currency contracts which are used to hedge the currency risk in respect of some of the geared portion of the portfolio. Details of the hedging contracts can be found in note 5.

The interim dividend declared in respect of the six months ended 30th June 2018 amounts to 2.5p (2017: 2.25p) per share, costing £5,578,000 (2017: £5,268,000).

All revenue and capital items in the above statement derive from continuing operations. The return per share represents the profit per share for the period and also the total comprehensive income per share.

The 'Total' column of this statement is the profit and loss account of the Company and the 'Revenue' and 'Capital' columns represent supplementary information prepared under guidance issued by the Association of Investment Companies.

STATEMENT OF CHANGES IN EQUITY

FOR THE SIX MONTHS ENDED 30TH JUNE 2018

	Called up		Capital
	share	Share	redemption	Capital	Revenue
	capital	premium	reserve	reserves1	reserve1	Total
	£'000	£'000	£'000	£'000	£'000	£'000
Six months ended 30th June 2018
(Unaudited)
At 31st December 2017	14,082	151,850	8,151	781,018	25,329	980,430
Repurchase of shares into Treasury	-	-	-	(31,694)	-	(31,694)
Net return on ordinary activities	-	-	-	27,849	8,036	35,885
Dividends paid in the period (note 4)	-	-	-	-	(7,326)	(7,326)
At 30th June 2018	14,082	151,850	8,151	777,173	26,039	977,295
Six months ended 30th June 2017
(Unaudited)
At 31st December 2016	14,082	151,850	8,151	788,019	23,114	985,216
Repurchase of shares into Treasury	-	-	-	(85,126)	-	(85,126)
Net return on ordinary activities	-	-	-	44,816	7,314	52,130
Dividends paid in the period (note 4)	-	-	-	-	(6,801)	(6,801)
At 30th June 2017	14,082	151,850	8,151	747,709	23,627	945,419
Year ended 31st December 2017
(Audited)
At 31st December 2016	14,082	151,850	8,151	788,019	23,114	985,216
Repurchase of shares into Treasury	-	-	-	(104,877)	-	(104,877)
Net return on ordinary activities	-	-	-	97,876	14,280	112,156
Dividends paid in the year (note 4)	-	-	-	-	(12,065)	(12,065)
At 31st December 2017	14,082	151,850	8,151	781,018	25,329	980,430

¹ These reserves form the distributable reserves of the Company and may be used to fund distribution of profits to investors via dividend payments.

STATEMENT OF FINANCIAL POSITION

AT 30TH JUNE 2018

	(Unaudited)	(Unaudited)	(Audited)
	30th June 2018	30th June 2017	31st December 2017
	£'000	£'000	£'000
Fixed assets
Investments held at fair value through profit or loss	1,027,531	1,030,369	1,070,243
Current assets
Derivative financial assets	3	695	1,359
Debtors	716	1,046	919
Cash and cash equivalents	8,640	13,955	13,689
	9,359	15,696	15,967
Current liabilities
Creditors: Amounts falling due within one year	(40,659)	(50,606)	(87,299)
Net current liabilities	(31,300)	(34,910)	(71,332)
Total assets less current liabilities	996,231	995,459	998,911
Creditors: Amounts falling due after more than one year	(18,936)	(50,040)	(18,481)
Net assets	977,295	945,419	980,430
Capital and reserves
Called up share capital	14,082	14,082	14,082
Share premium	151,850	151,850	151,850
Capital redemption reserve	8,151	8,151	8,151
Capital reserves	777,173	747,709	781,018
Revenue reserve	26,039	23,627	25,329
Shareholders' funds	977,295	945,419	980,430
Net asset value per share (note 6)	438.0p	400.3p	424.3p

STATEMENT OF CASH FLOWS

FOR THE SIX MONTHS ENDED 30TH JUNE 2018

	(Unaudited)	(Unaudited)	(Audited)
	30th June 2018	30th June 2017	31st December 2017
	£'000	£'000	£'000
Net cash outflow from operations before dividends
and interest (note 7)	(2,165)	(3,568)	(6,558)
Dividends received	9,063	9,053	16,829
Interest received	139	73	166
Overseas tax paid/(recovered)	131	(259)	(259)
Interest paid	(2,567)	(2,243)	(4,596)
Net cash inflow from operating activities	4,601	3,056	5,582
Purchases of investments	(180,873)	(215,725)	(437,710)
Sales of investments	257,491	298,045	533,956
Settlement of forward currency contracts	466	2,073	3,073
Net cash inflow from investing activities	77,084	84,393	99,319
Dividends paid	(7,326)	(6,801)	(12,065)
Repayment of bank loans	-	(3,858)	(3,858)
Drawdown of bank loans	-	12,081	19,474
Repurchase of shares into Treasury	(29,399)	(85,031)	(104,877)
Repayment of debenture	(50,000)	-	-
Net cash outflow from financing activities	(86,725)	(83,609)	(101,326)
(Decrease)/increase in cash and cash equivalents	(5,040)	3,840	3,575
Cash and cash equivalents at start of period	13,689	10,114	10,114
Exchange movements	(9)	1	-
Cash and cash equivalents at end of period	8,640	13,955	13,689
(Decrease)/increase in cash and cash equivalents	(5,040)	3,840	3,575
Cash and cash equivalents consist of:
Cash and short term deposits	16	33	19
Cash held in JPMorgan US Dollar Liquidity Fund	8,624	13,922	13,670
Total	8,640	13,955	13,689

NOTES TO THE FINANCIAL STATEMENTS

FOR THE SIX MONTHS ENDED 30TH JUNE 2018

1.       Financial statements

The information contained within the financial statements in this half year report has not been audited or reviewed by the Company's auditors.

The figures and financial information for the year ended 31st December 2017 are extracted from the latest published financial statements of the Company and do not constitute statutory accounts for that year. Those financial statements have been delivered to the Registrar of Companies, including the report of the auditors which was unqualified and did not contain a statement under either section 498(2) or 498(3) of the Companies Act 2006.

2.       Accounting policies

The financial statements have been prepared in accordance with the Companies Act 2006, FRS 102 'The Financial Reporting Standard applicable in the UK and Republic of Ireland' of the United Kingdom Generally Accepted Accounting Practice ('UK GAAP') and with the Statement of Recommended Practice 'Financial Statements of Investment Trust Companies and Venture Capital Trusts' (the revised 'SORP') issued by the Association of Investment Companies in November 2014 and updated in February 2018.

FRS 104, 'Interim Financial Reporting', issued by the Financial Reporting Council ('FRC') in March 2015 has been applied in preparing this condensed set of financial statements for the six months ended 30th June 2018.

All of the Company's operations are of a continuing nature.

The accounting policies applied to this condensed set of financial statements are consistent with those applied in the financial statements for the year ended 31st December 2017.

3.       Return per share

	(Unaudited)	(Unaudited)	(Audited)
	Six months ended	Six months ended	Year ended
	30th June 2018	30th June 2017	31st December 2017
	£'000	£'000	£'000
Return per share is based on the following:
Revenue return	8,036	7,314	14,280
Capital return	27,849	44,816	97,876
Total return	35,885	52,130	112,156
Weighted average number of shares in issue	226,737,244	248,493,716	240,684,981
Revenue return per share	3.54p	2.94p	5.93p
Capital return per share	12.28p	18.04p	40.67p
Total return per share	15.82p	20.98p	46.60p

4.       Dividends paid

	(Unaudited)	(Unaudited)	(Audited)
	Six months ended	Six months ended	Year ended
	30th June 2018	30th June 2017	31st December 2017
	£'000	£'000	£'000
Unclaimed dividends refunded to the Company	-	-	(4)
Final dividend paid in respect of the year ended  31st December 2017 of 3.25p (2016: 2.75p)	7,326	6,801	6,801
Interim dividend paid in respect of the six months ended 30th June 2017 of 2.25p	-	-	5,268
Total dividends paid in the period/year	7,326	6,801	12,065

All the dividends paid in the period have been funded from the Revenue Reserve.

5.       Derivative financial instruments

The £50 million debenture matured and was repaid on 8th June 2018. The Company had hedged against the currency risk arising from its £50 million debenture liability. The final forward currency contracts used for hedging the risk of fluctuation in the £/US$ exchange rate settled on 8th June 2018.

6.       Net asset value per share

	(Unaudited)	(Unaudited)	(Audited)
	Six months ended	Six months ended	Year ended
	30th June 2018	30th June 2017	31st December 2017
Net assets (£'000)	977,295	945,419	980,430
Number of shares in issue	223,125,492	236,166,875	231,085,811
Net asset value per share	438.0p	400.3p	424.3p

7.       Reconciliation of net return on ordinary activities before finance costs and taxation to net cash outflow from operations before dividends and interest

	(Unaudited)	(Unaudited)	(Audited)
	Six months ended	Six months ended	Year ended
	30th June 2018	30th June 2017	31st December 2017
	£'000	£'000	£'000
Net return on ordinary activities before finance costs
and taxation	39,322	55,654	119,424
Less capital return on ordinary activities before finance
costs and taxation	(29,749)	(46,535)	(101,512)
Decrease/(increase) in accrued income and other
debtors	215	252	(3)
(Decrease)/Increase in accrued expenses	(28)	4	(22)
Management fee charged to capital	(1,216)	(2,062)	(3,715)
Overseas withholding tax	(1,203)	(1,122)	(2,470)
Dividends received	(9,063)	(9,053)	(16,829)
Interest received	(139)	(73)	(166)
Realised (losses)/gains on foreign currency transactions	(306)	8	(81)
Realised gains/(losses) on liquidity fund	2	(641)	(1,184)
Net cash outflow from operations before dividends
and interest	(2,165)	(3,568)	(6,558)

8.       Fair valuation of financial instruments

The fair value hierarchy analysis for financial instruments held at fair value at the period end is as follows:

	(Unaudited)		(Unaudited)		(Audited)
	Six months ended		Six months ended		Year ended
	30th June 2018		30th June 2017		31st December 2017
	Assets	Liabilities	Assets	Liabilities	Assets	Liabilities
	£'000	£'000	£'000	£'000	£'000	£'000
Level 1	1,027,531	-	1,028,991	-	1,070,243	-
Level 21	3	-	695	-	1,359	-
Level 32	-	-	1,378	-	-	-
Total value of investments	1,027,534	-	1,031,064	-	1,071,602	-

¹    Consisting of forward foreign currency contracts.

²    Includes investment in Kane Holdings held at the comparative period end which had a market value at 30th June 2017 of £1,378,000. Kane Holdings was sold during the financial year ended 31st December 2017.

	(Unaudited)	(Unaudited)	(Audited)
	Six months ended	Six months ended	Year ended
	30th June 2018	30th June 2017	31st December 2017
	£'000	£'000	£'000
Level 3
Opening balance	-	1,448	1,448
Sales	-	-	(2,844)
Net movement in investment holding gain during the period/year	-	-	1,396
Change in fair value of unquoted investment during the period/year	-	(70)	-
Closing balance	-	1,378	-

For further information, please contact:

Alison Vincent

For and on behalf of

JPMorgan Funds Limited, Secretary

020 7742 4000

Please note that up to date information on the Company, including daily NAV and share prices, factsheets and portfolio information can be found at www.jpmamerican.co.uk

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 Half Year Report has been submitted to the National Storage Mechanism and will shortly be available for inspection at www.morningstar.co.uk/uk/NSM

The Half Year Report will also shortly be available on the Company's website at www.jpmamerican.co.uk where up to date information on the Company, including daily NAV and share prices, factsheets and portfolio information can also be found.

 

END

 

 

IR FKODDABKDBFK