JPMorgan Global Convertibles Income Fund
Termination of coverage
3 October 2019
Edison Investment Research is terminating coverage on NetCents, AEX Gold, Immunovia and JPMorgan Global Convertibles Income Fund. Please note you should no longer rely on any previous research or estimates for this company. All forecasts should now be considered redundant. Previously published reports can still be accessed via our website. MORE »
Positive outlook for niche asset class
5 November 2018
JPMorgan Global Convertibles Income Fund (JGCI) is the UK’s only listed closed-end fund focused on the convertible bond market. Convertibles usually pay a coupon (like an ordinary bond) but also have an embedded option to buy the underlying equity, meaning they benefit from rising share prices, as well as downside protection from the par value of the bond being repaid at maturity. While JGCI’s NAV total return has been flat to negative over the past year and its share price has drifted lower, its managers see potential for convertible bonds to perform well in the current economic and market environment, given they tend to outperform traditional fixed income as interest rates rise. A continuation vote will take place at the 2018 AGM in November; the board has recommended that investors vote in favour, given the outlook for the asset class. JGCI currently yields c 5% and has an active discount control programme. MORE »
Continuity of approach under new team head
6 June 2018
JPMorgan Global Convertibles Income Fund (JGCI) is managed by the convertible bonds team at J.P. Morgan Asset Management (JPMAM), now led by Natalia Bucci following the departure of Antony Vallée in February 2018. Bucci and other members of the team have worked together for many years, and stress the continuity of a process that has been developed collaboratively over time, based on in-depth fundamental security analysis. The portfolio management team has been bolstered with the addition of Paul Levene, who joined JPMAM in 2015. JGCI continues to achieve its target yield of 4.5% and NAV progression has been broadly steady, with the share price having risen by a greater margin over 12 months, following the introduction of a discount management policy in May 2017. The team remains positive on the outlook for the global economy, which supports exposure to more equity-sensitive areas of the convertible bond market. MORE »
Steady NAV progression and a 4.5% yield
28 July 2017
JPMorgan Global Convertibles Income Fund (JGCI) is the only UK-listed closed-end fund specialising in convertible bonds, aiming to generate income along with the possibility of capital growth. Increased investment flexibility granted to the managers in late 2015 means the fund can now invest more in the balanced to equity-like segments of the convertible bond market. NAV performance since launch in 2013 has been fairly steady, in spite of an environment of falling yields and tighter spreads on high-yield bonds. However, share price performance has been volatile at times, so the board has introduced a new discount control policy and has stepped up the pace of share buybacks. There has been a recovery in the share price since the policy was put in place in May 2017, yet JGCI still offers an attractive yield of 4.5%. MORE »
Low-volatility, income-tilted convertibles portfolio
22 November 2016
JPMorgan Global Convertibles Income Fund (JGCI) is the only UK-listed closed-end fund focusing on convertible bonds. While its primary aim is to provide investors with an income, the fund has recently moved to a more total return-orientated approach to meeting its objective, taking advantage of attractive risk/reward opportunities in the balanced segment of the market. Although fundamentally a bond portfolio, the equity participation offered by convertibles could prove defensive for JGCI investors if the recent fixed income sell-off becomes protracted. The NAV performance of the sterling-hedged fund has been steady while funds with unhedged overseas portfolios have seen material gains post-Brexit; JGCI’s managers note that currency volatility is a two-edged sword. MORE »
Seeking opportunity in more difficult conditions
10 February 2016
JPMorgan Global Convertibles Income Fund (JGCI) is the only UK-listed fund investing in convertible bonds. It aims to produce income with the potential for capital growth from a diversified global portfolio. A difficult period recently for the sector has seen the fund experience some share price volatility, although NAV has largely been protected by avoiding the capital risk inherent in some very high yielding issues. Over the past year the number of securities in the portfolio has risen as a further element of diversification and risk reduction, and a new hire to the team has facilitated greater exposure to the under-researched Asia Pacific market. The current wider-than-average level of discount and 5%+ yield may represent an opportunity for investors prepared to weather continued near-term volatility. MORE »
Total returns from underappreciated asset class
1 May 2015
JPMorgan Global Convertibles Income Fund Limited (JGCI), launched in mid-2013, seeks to provide investors with income (current yield of 4.4%) and long-term capital growth potential by investing globally in convertible bonds, which combine a degree of equity upside with the regular income and capital preservation characteristics of bonds. It is the only closed-end fund of its kind in the UK, and has so far delivered on its income objective, paying a 4.5p dividend in its first year. Unfavourable conditions in the higher-yield segment of the convertibles market have made total returns harder to achieve in recent months, but the managers see catalysts for recovery and performance year to date in 2015 has been positive. MORE »
