Preferable Over Exchange-Traded Funds: Insight on Why This Stock Might Be a Superior Option for Buy-and-Hold Investors
The J.P. Morgan Growth & Income Trust (ISIN: GB00BYMKY695), also known as JPMorgan European Growth & Income (JEGI), has been a standout investment option for long-term investors seeking growth combined with income. Over the past year, the trust delivered a net asset value (NAV) total return of 3.5%, outperforming its benchmark, the MSCI ACWI, by 1% and significantly surpassing the peer group average of -0.4%.
This closed-end fund, which is tradable only with previously issued shares, aims to outperform the MSCI ACWI and offers global diversification and regular dividends. It invests actively in the global stock market, creating a portfolio of 50-90 values, and pays out 4% of its NAV annually as a dividend.
JEGI's strong track record is attributed to its sector-leading consistency, sustained outperformance, and active management approach. Despite volatility and drawdowns, the trust has demonstrated a consistent performance that is almost consistently generated year after year. In the past ten years, it has generated a total return of 15% per year, outperforming the MSCI ACWI, which has generated just over 11% in the same timeframe.
The trust's focus on European growth and income stocks combined with active portfolio positioning can be advantageous for investors seeking a blend of income and capital growth with potential for outperformance. However, this comes with the risks and complexities inherent in active management and geographic concentration.
For buy-and-hold investors, especially those comfortable with a European equity focus and seeking consistent income plus growth, JPMorgan Growth & Income Trust could be a better choice than global ETFs that offer broader but more passive exposure. The trust's history of dividend growth, NAV appreciation, and managed discount suggests it can provide stable returns over time, while global ETFs may offer lower volatility but possibly lower relative returns in certain markets.
Despite being listed in London, the J.P. Morgan Growth & Income Trust remains an attractive investment choice for buy-and-hold investors. Higher costs may be incurred than with an XETRA order for purchasing the trust, but its consistent performance and potential for outperformance make it particularly attractive for long-term investors. The trust can use leverage of up to 25% or a cash quota of up to 5% to achieve its aim, and can be purchased with the appropriate knowledge of leveraged products at a few brokers.
In summary, the J.P. Morgan Growth & Income Trust offers a compelling blend of income and growth with a strong track record of outperformance relative to its European benchmark and peers, making it a strong candidate for buy-and-hold investors favoring active management and income generation over broad passive exposure typical of global ETFs.
This closed-end fund, the J.P. Morgan Growth & Income Trust, invests actively in the global stock market, focusing on European growth and income stocks, and offers a dividend of 4% of its net asset value annually.
For long-term investors, this trust has demonstrated a consistent performance, outperforming its benchmark and peer group, making it an attractive choice, especially for those preferring active management and income generation over broad passive exposure offered by global ETFs.
