JARA - JPM Global Core Real Assets

[Nexus5]

Hi all,

Relative newbie to investment trusts still.

I've owned JARA from IPO and topped up recently below 100. However I noticed it has slid down into low 90s now. Any idea what is driving the move?

I thought it might be something to do with a weakening Dollar and a dividend payment? I read this in their half year:

"The Company recorded a total return on net assets of -4.6% over the six months ended 31st August 2020; we do not hedge currency exposures and the weakness of the US dollar relative to sterling accounted for nearly half of this fall. "

Thanks

[mc2fool]

This is the first time I've come across this IT, and what a curious beast it is....

It seems to be (mostly) a fund of funds, concentrating on real estate, transport, infrastructure and "listed real assets" ... although the breakdowns on the AIC don't seem to make sense with each other. https://www.theaic.co.uk/companydata/0P0001IFXD/portfolio

The AIC's ongoing charge figure of 0.36% is also wrong (obviously so when you look at what the AIC reports as the management fee structure). The IT's website says the ongoing charge is 1.32%.

Anyway, can you say why you chose this IT, it seems a particularly unusual choice for a "relative newbie"...

[Nexus5]

So there are a few reasons I liked it. I liked that it was coming out of an established brand (JPM), that would have access to good infra assets and it was an area that I did not have in my portfolio (infrastructure) at all.

From memory I went for it at IPO as I thought it might be a decent flip. In fact when I just searched "JARA IPO" a thread from lemon fool came up from 2019 (can't post link for some reason).

I've kept it in there as it still offers something different to my portfolio but just wondered if there was something specific up with it which caused recent weakness. Plus I would have thought that with all this talk about improving US Infrastructure bill would have seen it perform at least a little bit.

Not too fussed, just seems to be a lack of coverage of the name in the financial press/investment trust podcast etc.

On a slightly related topic, where do private investors find research on investment trusts other than reading the trust pages themselves?

Thanks

[GrahamPlatt]

On a slightly related topic, where do private investors find research on investment trusts other than reading the trust pages themselves?

viewtopic.php?f=54&t=27473#p380140

[Itsallaguess]

On a slightly related topic, where do private investors find research on investment trusts other than reading the trust pages themselves?

viewtopic.php?f=54&t=27473#p380140

The Investment Trust Handbook 2021 is still also available via a free PDF download from here - https://harriman-house.com/ithb2021

Some other good sources of info regarding Investment Trusts are -

The AIC - https://www.theaic.co.uk/guide-to-investment-companies

https://www.theaic.co.uk/aic/find-compa ... set=import

Trustnet - https://www.trustnet.com/ (although I usually just Google 'Trustnet xxx' where xxx is the EPIC of the Investment Trust that I'm interested in..)

Then of course we've got our very own Investment Trust board here, as well - https://www.lemonfool.co.uk/viewforum.php?f=54

Cheers,

Itsallaguess

[Alaric]

From memory I went for it at IPO as I thought it might be a decent flip. In fact when I just searched "JARA IPO" a thread from lemon fool came up from 2019 (can't post link for some reason).

This thread perhaps
viewtopic.php?t=19348#p249624

Being an Investment Trust, its price can fall if the discount widens. The thread notes that its fellow trust MATE showed this effect from its own IPO.

[Hariseldon58]

So there are a few reasons I liked it. I liked that it was coming out of an established brand (JPM), that would have access to good infra assets and it was an area that I did not have in my portfolio (infrastructure) at all.

From memory I went for it at IPO as I thought it might be a decent flip. In fact when I just searched "JARA IPO" a thread from lemon fool came up from 2019 (can't post link for some reason).

With Investment Trusts I’m not sure buying an IPO is really a great idea if your view is to flip it. They tend to be in areas that are popular, ie they may be coming to the market late. The supply side is elastic, the higher the demand, then they can raise more money and the costs of the launch come out of the fund raising, leading to an automatic fall in the NAV at launch.

(It was common years ago that new trusts would come with warrants to help offset that effect, but no longer)

[Nexus5]

Thanks. Yes since my JARA Purchase it's been buy and hold for other investment trusts as most seem to.only go up (e.g most Baillie Gifford strategies). But clearly.not everything lasts forever.

This week JARA has bounced back, and I believe it has something to do with the recent strength of the Dollar. As per my initial post I think I referred to JARAs comments re being unhedged for FX purposes which caused a bigger impact on their NAV than the underlying investments.

I wonder if they will change this policy going forward. Either way, happy to see it climb back up. Thanks for all your help/feedback so far.

[richfool]

Noting that JARA invests in "real" assets, such as infrastructure, transport and real estate, presumably with the intention of providing diversification into real assets, I would think that the transport and real estate sectors, at the very least, will have been adversely affected by the covid pandemic. It will surely now depend on how quickly markets anticipate that the world and those sectors will recover from the affects of the pandemic.

I noted that the trust is targetting a dividend of 4-6% when fully invested, based on IPO price.

[Nexus5]

JARA having a tough time again. Not entirely sure why.

[everhopeful]

Most of the recent decline can be explained by a widening of the discount which has gone from a premium to -7%. I would have thought that this IT is a buy and hold type of investment with a decent yield. If you are going to be concerned about every capital dip I am not sure it is the correct place to put your money.

[GrahamPlatt]

Odd that. I had a look at theaic site yesterday and as I recall it was showing a 12% discount. It’s now -7.1% and the factsheet dated 31st May. Perhaps the NAV’s been revalued. It does have a very comprehensive list of holdings, some of which are undoubtedly very badly affected by covid.

[Parky]

At face value the latest RNS from JARA on 9th June does not offer any clues as to the opening up of the discount which seems to be the main cause of the fall in share price. Annual report is due soon ( annual meeting July), so even though the year end was February, before the latest share price falls, they should be expected to comment.

https://www.theaic.co.uk/companydata/0P ... nts/143523

[Parky]

See also ADVFN Share Chat. https://uk.advfn.com/stock-market/londo ... tnav_i_0_t

Lots of confusion out there!

[richfool]

I came across this in the DM about JARA. There seems to be a suggestion that it was rated a "sell" for a while, because the managers weren't investing the IPO funds quickly enough.

JPMorgan Global Core Real Assets is in its infancy. It was launched in September 2019 to invest not only in income generating infrastructure projects, but also real estate (commercial property) and transport (container ships and trains).

It has taken a while for the trust to make its investments – not helped by the pandemic – but it is now nigh on fully invested.

The result is an uptick in the quarterly dividend payments it is making – one penny per share compared to 0.75pence a year ago – and the promise of more income in the pipeline.

Philip Waller, part of the management team, says the trust's target income is between four and six per cent a year with the opportunity for a little capital growth on top.

'We see this trust primarily as a good portfolio diversifier for someone looking for income,' he says. 'It's investing in a spread of assets that are uncorrelated to each other, and to other financial assets such as equities.

'Further diversity comes from the fact that it has both unlisted and listed holdings and has exposure to nearly 650 infrastructure and transport assets and more than 200 real estate buildings. The portfolio is truly global.'

Alan Brierley, an analyst at Investec Bank, recently issued a 'buy' note on the trust. This is after rating it a 'sell' as a result of the long time it was taking the managers to make its investments – and the share price trading at a premium to the value of the trust's underlying assets.

But with these issues largely resolved – the trust's premium is down to a reasonable 5.3 per cent – Brierley believes the JPMorgan fund provides investors with an important source of income diversification which should show 'defensive characteristics in more turbulent market conditions'.

https://www.dailymail.co.uk/money/inves ... ofits.html

I'm not sure that I would be too keen on it, whilst covid is still around, bearing in mind it invests in transport and real estate.

[richfool]

I've just re-discovered this trust, targetting "real" assets, (JARA). The SP has fallen considerably, presumably because of its holdings of property and infrastructure in the current higher interest rate environment. It currently yields: 5.4% and is at a discount to NAV of c23%.

I'm pondering whether it might provide a combination of defensiveness if we move into a period of recession, along with a healthy yield at a discount, and medium-longer term prospects of recovery.

Objective
To provide Shareholders with stable income and capital appreciation from exposure to a globally diversified portfolio of core real assets. The Company will pursue its investment objective through diversified investment in private funds or managed accounts managed or advised by JPMAM.

Top Ten Holdings:
Security ....... Weight
SPF FIV5 LUX SCSP OPEN-END FUND USD 20.48%
GLOBAL TRANSPORT INCOME FUND MASTER PARTNERSHIP 18.71%
IIF UK 1 LP OPEN-END FUND USD 18.31%
STRATEGIC PROPERTY FUND ASIA SCSP OPEN-END FUND 17.75%
U.S. REAL ESTATE MEZZANINE DEBT FUND FEEDER (LUX) 7.16%
Prologis Inc 0.61%
Equinix Inc 0.38%
American Homes 4 Rent Class A 0.34%
Simon Property Group Inc 0.28%
JPM GBP Liquidity LVNAV X (dist.) 0.26%

Any thoughts anyone?

https://www.hl.co.uk/shares/shares-sear ... ts-ltd-ord

[wanderer]

I've owned this since launch and it's been a total dog.

That's not too say it's a bad buy now of course, given the 25% that's been given up.

[Parky]

I have lost a lot too. When I bought I did not understand the effect interest rates would have. Other similar trusts have been affected in the same way. I hope they will recover if/when interest rates drop.

[dundas666]

Seems to focus on property, infrastructure and transport, sectors that have done particularly badly in the last few years.

[richfool]

So I suppose the big question is, does it represent a recovery opportunity, or is it condemned to a further extended period of non-performance in-line with higher interest rates? Hmm, maybe the latter for some time yet.