The Lemon Fool

(Received from Interactive Investors - notification of a forthcoming corporate action)

Conversion
Conversion ratio: to be confirmed
New shares: 15th March 2021
As a holder in JPMorgan European Investment Trust, you can convert your Income shares to receive Growth Shares at a
rate not yet announced. Your options are:

OPTION 1: Do nothing (Default). You will keep your current holding if you take no action.

OPTION 2: Convert shares. You will be issued with new shares in exchange for existing shares.
We'll submit your instruction to the company before the official event deadline. Your account will be updated upon
receipt of the proceeds but in some circumstances there may be delays in the proceeds being credited to us. Please
allow 10 working days for your account to be updated.


I've held JETI for nearly 3 years and it has actually lost money with an XIRR of 1.6% ...I might just throw in the towel and sell.

edit - Is this a regular offering to convert to the Growth version?)

monabri wrote:(Received from Interactive Investors - notification of a forthcoming corporate action)

Conversion
Conversion ratio: to be confirmed
New shares: 15th March 2021
As a holder in JPMorgan European Investment Trust, you can convert your Income shares to receive Growth Shares at a
rate not yet announced. Your options are:

OPTION 1: Do nothing (Default). You will keep your current holding if you take no action.

OPTION 2: Convert shares. You will be issued with new shares in exchange for existing shares.
We'll submit your instruction to the company before the official event deadline. Your account will be updated upon
receipt of the proceeds but in some circumstances there may be delays in the proceeds being credited to us. Please
allow 10 working days for your account to be updated.


I've held JETI for nearly 3 years and it has actually lost money with an XIRR of 1.6% ...I might just throw in the towel and sell.

edit - Is this a regular offering to convert to the Growth version?)

I believe it is. The non-income version (last time I looked) progresses better.

MY XIRR has come down considerably in the past few years: luckily I have held since 2012 and it has done much better than my HYP! My income per share has increased by 1.6X so I'm even thinking of buying more. It holds some good companies.

One's perspective depends so much on where one stands.

Arb.

I hold some JETI in my SIPP and also received details of the swap offer. I haven't owned this trust very long but understand this is a regular offer, and not one that I've come across with other trusts. I imagine it could be quite useful under some circumstances and depending on tax considerations.

Looking forwards,to me the fund itself looks pretty decent value at the moment with yield just shy of 5% and a discount of just under 9%. On the negative side the gearing is quite high and the dividend wasn't quite covered in the last financial year. Overall though, it seems a good quality portfolio at a reasonable price and I would expect it to move back up towards the pre-COVID level over the coming months. I am looking to add some more to my SIPP.

Y

It's an income not a growth IT so if anything I'd measure it on the income growth instead.

My figures show a current yield of 4.7% and 5 year dividend growth rate of 7.1% pa which looks good to me.

It may not continue at these levels over the next few years, but this is exactly what I'm looking for in a IT: not a pure growth IT with negligible yield and aimed solely at capital growth, nor a high yield IT stuck at 6% yield for ever, but an IT with a decent yield to start with (4%+) with a good track record of growing those dividends.

I'm looking to add JETI next month.

Looking at the AIC site, JETI and JETG would appear to have the worst and the second worst total return performance over a ten year period, for the "Europe" sector. JETI has by far the highest yield (which may be a pertinent factor).

1 year and 5 year performance figures are not much better. Bailie Gifford - inevitably - looks like the best bet at the moment, but trades at a premium to NAV.

I have JETI in my SIPP, but I think I may swap them for something else - and it won't be JETG.

The management routinely offers holders of JETI and JETG the option to switch between the two classes of share (income and growth), (I think quarterly, but it may be annually), as a non chargeable event.

I used to hold JETI, but disposed of it earlier in 2020, because of its poor capital performance, (despite its good dividend yield).

Thanks for the comments. I was dashing out and I missed the negative sign in front of the XIRR figure ! I'll picker it some more but am most likely to "do nothing" .

I've not been with Interactive Investor for that long having transferred from ITI Crapital to them ( 6.5 months to transfer and still not fully resolved - as for information from ITI, I consider that I'm "winning" if I can actually get in touch with them!).

In the European sectors, I now hold EAT for the dividend yield (c 5.09%), and BGEU and BRGE for capital growth.

What this thread shows is that one should buy according to what one is looking for. It comes down to a balance between capital growth and yield: which does a particular investor wish to emphasise?

In my case, as I am already retired, it is income, so I am happy to have only moderate capital growth. An XIRR of 8.3% since purchase is satisfactory for me*, but would not suit a pot builder, or an asset harvester.

*An excellent 11.7% in the last year before covid, that is to Devember 2019. It strikes me that now is not a good time to judge any IT.
Arb.

Another thing to bear in mind for income seekers is that JETI are expected to announce the 4th dividend towards the end of February. The last 4th quarter dividend was 2.50p with an xd date of 27/2/2020. This would presumably have been based mostly on pre-COVID results. Quarterly dividends since then have been 1.40p. It will be interesting to see what the 4th dividend will be. If it's less than last year's 2.50p I imagine it might cause some price weakness whereas if it's maintained or increased I would expect, other things being equal, to see the price firm up. Bear in mind also that the last annual dividend was only 0.93% covered and could have been further impacted by the full effect of COVID.

Y

yieldhog wrote:... Bear in mind also that the last annual dividend was only 0.93% covered and could have been further impacted by the full effect of COVID.

Yes, they only have ten months' reserves, but that's ten months with zero income.

I would hope that they will use those reserves to bridge any income shortfall, after all that's what the reserves are for, and having a fairly decent reserve was a key factor in my decision to buy them.

That said, they did cut in 2014, so they do not have the precious long-uncut record that some ITs will doubtless defend to the last rattle of their piggybanks.

V8

JETI have announced the Q4 dividend as 2.5p. Payable April 1st.

xd date is 25/2
Price hasn't moved much since the divi announcement and, other things being equal, should stay around this level at least until after xd date.
At the current price of around 137p the prospective yield looks like 4.9% and discount to NAV about 9%.
Historically JETI appears to trade around a 10% discount and over the last ten years I can only see one brief period when it traded at a small premium. However, if the price returns to pre-COVID levels over the next year or so and with the prospective dividend, we should see a total return of at least 15%. Maybe not the most exciting outlook but with JETI's good quaity portfolio I still believe it offers good value in today's market.

Y

yieldhog wrote:Maybe not the most exciting outlook but with JETI's good quaity portfolio I still believe it offers good value in today's market.

Yieldhog, do you think their exposure to financials adds risk to this good quality portfolio?

I picked up in the latest Money Maker's podcast that there are proposals to merge JETI into JETG, January or February next year, possibly with a resultant enhanced dividend yield on JETG. (Coverage starts at 38 minutes 50 seconds in).

https://soundcloud.com/moneymakersaudio ... ember-2021

Caledonia and Personal Assets are discussed amongst many other trusts in the podcast.

Of note: "While the new trust will maintain the growth investment style .... it will adopt a 4% dividend policy ....."

https://citywire.co.uk/investment-trust ... e/a1576084

Ranking the 12 investment trusts in the European and European Smaller Companies sectors on 10 year TR using the AIC website, JETI and JETG come 11th and 12th.