Core equity trust with an attractive dividend policy: JPMorgan European Growth and Income

Diversified European core equity trust with an attractive dividend policy…by Alan Ray

This trust has been awarded a rating by Kepler Trust Intelligence for income. Find out more

Overview

JPMorgan European Growth and Income (JEGI) has continued to build on its outstanding Performance track record as a diversified, balanced, core European equity trust, with an 80% NAV total return over the last five years, compared to 53% for the benchmark MSCI Europe ex UK index (figures to 15/06/2026). Strong performance combined with an attractive Dividend policy have contributed to JEGI’s Discount, which through 2026 has been close to, or even slightly above, net asset value.

On 29/05/2026 JEGI announced that it was the default rollover option for European Opportunities Trust (EOT), which has put forward a range of proposals to its shareholders. JEGI gives EOT shareholders the option to retain a holding in an investment trust investing in European equities. JEGI’s manager, JPMorgan Asset Management will contribute to JEGI’s costs, ensuring that the transaction will be cost-neutral. Existing JEGI shareholders should also be reassured that there is no change to how JEGI is managed.

The main benefit for JEGI shareholders is an increase in the size of JEGI. Specifically, JEGI’s management fee is tiered and assets rolling into JEGI will have the effect of reducing percentage costs to all shareholders. A larger trust will also be more marketable to a wider range of shareholders. A shareholder circular with full details can be viewed here.

Analyst’s View

 
Although we obviously don’t yet know the result of the transaction outlined above, any assets flowing across to JEGI will provide a real-world demonstration of a tiered management fee working for shareholders. JEGI’s net assets already exceed the threshold for the lowest 0.40% tier so any new assets will bring the average down for all shareholders. This can really help returns over the long-term. We look at the structure of the fee in the Charges section.

With such strong performance, a good question for existing and prospective JEGI shareholders is whether European equities remain attractive. One of the most impressive things about JEGI’s track record is that yes, European markets have provided a tailwind in recent times, but only in specific ways, wrong-footing some active managers. JEGI’s process, built on three pillars of quality, value and momentum, using small individual stock positions and no big sector bets, has evolved to capture specifics such as the resurgence of banks, while avoiding some of the more difficult areas that haven’t performed so well, or areas of over-valuation that have corrected. The JEGI team recently noted that valuations remain attractive and that key drivers behind Europe’s equity market resurgence, from the improvement in the quality of banking, to the electrification of the economy, the restoration of infrastructure in Germany and higher defence spending, all remain in place, and have a long way to run. JEGI also makes good use of the suite of investment trust features, with a careful use of gearing, a helpful dividend policy and various measures to protect against persistent discounts. The market has rewarded all these factors with a strong share price rating and JEGI looks very well-positioned to capture the upside from the next phased of European equity markets.

Bull

• A core European equity trust with a track record of navigating changing market conditions
• Enhanced dividend policy gives managers the freedom to target total return
• Strong flows into European equities are evidence of a positive shift in overall sentiment to Europe

Bear

• The US-Iran war reveals that Europe is still vulnerable to energy price shocks
• The ECB recently raised interest rates on concerns of inflation rising again
• Dividend policy is not a conventional progressive dividend policy, and the dividend may rise and fall with the NAV

See the full research for JEGI here >
 

 

Disclaimer

Disclosure – Non-Independent Marketing Communication

This is a non-independent marketing communication commissioned by JPMorgan European Growth & Income. The report has not been prepared in accordance with legal requirements designed to promote the independence of investment research and is not subject to any prohibition on the dealing ahead of the dissemination of investment research.