jpmorgan asian investment trust plc...jpmorgan asian investment trust plc half year report &...

JPMorgan Asian Investment Trust plcHalf Year Report & Financial Statements for the six months ended 31st March 2019

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K E Y F E A T U R E S

J P M O R G A N A S I A N I N V E S T M E N T T R U S T P L C . H A L F Y E A R R E P O R T & F I N A N C I A L S TAT E M E N T S 2 0 1 9

Your Company

ObjectiveTotal return, primarily from investing in equities quoted on the stock markets of Asia, excluding Japan.

Investment Policy• To have a diversified portfolio of Asian stocks.

• To have a portfolio comprising around 50 to 80 investments.

• To use borrowings to gear the portfolio within a range of 10% net cash to 20% geared in normal market conditions.

Dividend PolicyFrom 1st October 2016, the Company implemented a dividend policy under which it aims to pay, in the absence of unforeseencircumstances, a regular quarterly dividend equivalent to 1% of the Company’s cum-income net asset value (‘NAV’) on the last businessday of each financial quarter, being the end of December, March, June and September. These dividends are paid from a combination ofthe revenue and capital reserves. There is no change to the investment policies of the Company following the change in dividend policy.

BenchmarkMSCI All Countries Asia ex Japan Index with net dividends reinvested, expressed in sterling terms.

Capital StructureAt 31st March 2019, the Company’s issued share capital comprised 94,081,493 shares of 25p each, excluding shares held in Treasury.

Discount ManagementIn normal market circumstances the Company will use its buyback powers in order to ensure that, as far as possible, its ordinary sharestrade at a discount no wider than 8% to 10% relative to their cum-income Net Asset Value (‘NAV’) per share.

Continuation ResolutionIn accordance with the Company’s Articles of Association, the Directors are required to propose a resolution that the Company continueas an investment trust at the Annual General Meeting in 2020 and every third year thereafter.

Management CompanyThe Company employs JPMorgan Funds Limited (‘JPMF’ or the ‘Manager’) as its Alternative Investment Fund Manager. JPMF delegatesthe management of the Company’s portfolio to JPMorgan Asset Management (UK) Limited (‘JPMAM’).

Financial Conduct Authority (‘FCA’) Regulation of ‘Non-Mainstream Pooled Investments’ and MiFID II‘Complex Instruments’The Company currently conducts its affairs so that its shares can be recommended by independent financial advisers to ordinary retailinvestors in accordance with the FCA’s rules in relation to non-mainstream investment products and intends to continue to do so for theforeseeable future.

The shares are excluded from the FCA’s restrictions which apply to non-mainstream investment products because they are shares in aninvestment trust.

Association of Investment Companies (‘AIC’)The Company is a member of the AIC.

WebsiteThe Company’s website, which can be found at www.jpmasian.co.uk, includes useful information on the Company, such as daily prices,factsheets and current and historic half year and annual reports.

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C O N T E N T S

C O N T E N T S

Half Year Performance 3 Financial Highlights

Chairman’s Statement 6 Chairman’s Statement

Investment Review 9 Investment Managers’ Report 12 Ten Largest Investments 13 Portfolio Analysis

Financial Statements 15 Statement of Comprehensive Income 16 Statement of Changes in Equity 17 Statement of Financial Position 18 Statement of Cash Flows 19 Notes to the Financial Statements

Interim Management 23 Report

Shareholder Information 25 Glossary of Terms and Alternative

Performance Measures (‘APMs’)

27 Where to buy J.P. Morgan Investment Trusts 29 Information about the Company

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Half Year Performance

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1 Source: Morningstar.2 Source: J.P. Morgan/Morningstar, using cum income net asset value per share.3 Source: MSCI. The Company’s benchmark is the MSCI All Countries Asia ex Japan Index with net dividends reinvested, expressed in sterling terms.4 Dividends declared pursuant to the Company’s new dividend distribution policy.A Alternative Performance Measures (‘APMs’).

A glossary of terms and APMs is provided on pages 25 and 26.

TOTAL RETURNS IN STERLING TERMS (INCLUDING DIVIDENDS REINVESTED) TO 31ST MARCH 2019

3 Year 5 Year 10 Year 6 Months Cumulative Cumulative Cumulative

Return to shareholders1,A

Return on net assets2,A

Benchmark return3,A

Net asset returnperformance againstbenchmark return3

Dividend4

+7.1% +83.3% +104.2% +221.5%

+5.1% +77.5% +101.7% +224.6%

+1.9% +54.5% +74.9% +218.7%

+3.2% +23.0% +26.8% +5.9%

+7.7p


F I N A N C I A L H I G H L I G H T S

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SUMMARY OF RESULTS

31st March 30th September % 2019 2018 change

Net assets (£’000) 374,835 364,306 +2.9

Number of shares in issue (excluding shares held in Treasury) 94,081,493 94,081,493 0.0

Net asset value per share 398.4p 387.2p +2.91

Share price 356.0p 340.5p +4.62

Share price discount to net asset value per shareA 10.6% 12.1%

Net cashA 0.8% 0.3%

Ongoing chargesA 0.75% 0.75%

1 % change, excluding dividends paid. Including dividend, the total return is +5.1%.2 % change, excluding dividends paid. Including dividend, the total return is +7.1%.A Alternative Performance Measures (‘APMs’).



Chairman’s Statement

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I am delighted to report that in the six months to 31st March 2019 the Company’s total return toshareholders was +7.1%, reflecting strong net asset growth ahead of the benchmark alongside a narrowingof the Company’s discount which has accelerated subsequent to the period end. Perhaps the most pleasingaspect of the first half of the financial year was the total return on net assets of +5.1%, representing anoutperformance of 3.2 percentage points over the benchmark, the MSCI All Countries Asia ex Japan Index,which returned +1.9% in sterling terms.

The principal reason for the Company’s outperformance against the benchmark was the portfolio’s stockselection with positions in China and Taiwan. Full detail of the Company’s performance, together witha market review and outlook for the remainder of 2019 can be found in the Investment Managers’ Report.

Dividend Policy and Discount Management

The Company’s dividend policy aims to pay, in the absence of unforeseen circumstances, regular quarterlydividends funded from a combination of revenue and capital reserves equivalent to 1% of the Company’sNAV on the last business day of each financial quarter, being the end of December, March, June andSeptember.

For the year ended 30th September 2018 dividends paid totalled 15.7 pence. In respect of the quarters to31st December 2018 and to 31st March 2019 dividends of 3.7 pence and 4.0 pence respectively were paid.Two further dividends will be declared on the first business day after 30th June and 30th September 2019.Shareholders are further reminded that the dividends are based upon a percentage of net assets, so thedividend paid to shareholders will reflect the Company’s net assets at the particular quarter end and so willbe subject to market fluctuations.

The excellent performance of the manager together with the high yield available to shareholders iscontinuing to drive the Company’s discount to more appealing levels. Overall, the trend is encouraging withthe Company’s discount at the 31st March 2019 registering 10.6%, which compared to 12.1% at the end ofthe financial year on 30th September 2018. Since the period end the discount has tightened significantlyand currently stands at 6.6%.

Gearing

The Company has in place a multi currency loan facility with Scotiabank. The Company did not employ anygearing over the period.

Fees

The Board continues to focus on costs incurred by the Company across all of its functions, with a view toenhancing shareholder value. The Board is pleased to note that the Company’s ‘Ongoing Charges’(representing the Company’s management fee and all other operating expenses) are amongst the lowestwithin its comparable peer group of actively managed open and closed-ended investment vehicles at0.75%, ensuring that the Company remains on a competitive footing.

Board of Directors

Having served on the Board since 2005, Ronald Gould retired as a Director and as Chairman of theAudit Committee at the conclusion of the Company’s Annual General Meeting held in February 2019.Dean Buckley has succeeded Ronald in the role of Audit Committee Chairman and Senior IndependentDirector.

Bronwyn Curtis OBEChairman


C H A I R M A N ’ S S T A T E M E N T

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Outlook

The rebound in markets in early 2019 was boosted by the more accommodative stance of central banks,particularly the US Federal Reserve, and the measures taken by China to stimulate the economy. The recenteconomic data in China has been positive and this should ease investor fears about a slowdown in Asia’slargest economy. The primary risks to Asian equities are the trade dispute between China and the US, andthe strength of the US dollar. If the US dollar strengthens and/or the trade dispute intensifies and isprotracted, it will impact growth and earnings. Our Investment Managers are monitoring this closely. It isworth noting that the Company has relatively little exposure to Chinese exporters and valuations in Asia arestill below long-term averages.

Bronwyn Curtis OBEChairman 29th May 2019


Investment Review

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Ayaz EbrahimInvestment Manager

Robert LloydInvestment Manager

Summary

During the six month period under review, the Company’s total return on net assets was +5.1%,outperforming Asian stock markets, as measured by the MSCI All Countries Asia ex Japan Index, whichdelivered a +1.9% total return in sterling terms. In this report, we discuss the market backdrop, examinethe drivers of the Company’s performance, and then consider the outlook for Asian stock markets for therest of 2019.

Market Review

In the fourth quarter of 2018, Asian equities followed other global equity markets in falling sharply. Thiswas in response to fears of moderating growth expectations in China and the United States (US), tradetensions, and a reduction in expected earnings in the technology hardware and internet sectors.

The oil price peaked at 85 US Dollars in early October and fell as much as 40% in the fourth quarter due toconcerns over a slowing global economy and oversupply. The slowdown in China persisted throughout thequarter, and the government’s attempt to stabilise the economy was more or less overshadowed byheadline news of further weakness in economic data, as well as the failure to resolve US-China tradenegotiations.

The first quarter of 2019 saw markets, including Asian equities, rebound as investors’ risk appetitesimproved. This reflected central banks, specifically the US Federal Reserve, becoming moreaccommodative, the implementation of an economic stimulus package by the Chinese government, andprogress in trade negotiations between the Chinese and US governments. Markets reacted positively todovish statements made by the head of the US Federal Reserve, Jerome Powell, indicating a more cautiousstance towards future rate rises. Central banks in Europe (European Central Bank, ECB) and China (People’sBank of China, PBOC) also signaled accommodative monetary policies to support the economy. Tradenegotiations between the Chinese and US governments resulted in the US government delaying theimplementation of tariffs scheduled for 1st March 2019, which also boosted sentiment.

Falling oil price beneficiaries Indonesia, Philippines and Indonesia were among the top-performing marketsover the review period. Currency was a positive tailwind for these markets, as was a benign inflationoutlook and a moderating outlook for interest rate hikes.

Chinese equities outperformed the broader region, thanks to the strong rebound in the first quarter andfiscal stimulus (including a value-added tax rate cut), as well as MSCI’s announcement of the furtherinclusion of China’s domestic A-shares into regional and global indices. Hong Kong equities alsooutperformed the broader region, led by property developers and select Macau casino operators.

In contrast, export sensitive markets such as Korea and Taiwan lagged over the review period, driven bycorporate earnings downgrades especially in the semiconductor and smartphone component segment ofthe market, while economic releases including export data and the purchasing managers’ index suggestedlackluster economic activity.

Malaysia and Thailand also underperformed the broader region. In Malaysia, the growth outlook forcorporates remained underwhelming, compounded by the cancellation of contracts for several megaprojects, soft commodity prices, and weakening business confidence. Thailand was dragged down by weakexternal demand, as well as uncertainties ahead of the much anticipated election which took place on24th March which weighed on private and public investment activities.

Richard TitheringtonInvestment Manager


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1 0 | J P M O R G A N A S I A N I N V E S T M E N T T R U S T P L C . H A L F Y E A R R E P O R T & F I N A N C I A L S T A T E M E N T S 2 0 1 9

PERFORMANCE ATTRIBUTION

FOR THE SIX MONTHS ENDED 31ST MARCH 2019 % %

Contributions to total returns

Benchmark return (in sterling terms) 1.9

Stock selection 3.5

Investment manager contribution 3.5

Dividend/residual1 0.1

Portfolio return 5.5

Management fee/other expenses –0.4

Return on net assets 5.1

Return to shareholders 7.1

1 The dividend/residual arises principally from timing differences in the treatment of income flows.

Source: FactSet, JPMAM and Morningstar.

All figures are on a total return basis. Performance attribution analyses how the Growth portfolio achieved its recorded performancerelative to its benchmark.


Performance

Over the six months ended 31st March 2019, the portfolio outperformed its benchmark index. Positiverelative performance came largely from stock selection, with positions in China and Taiwan being thestandout contributors.

In China, property developers such as China Overseas Land & Investment, China Vanke and China ResourcesLand performed strongly on policy easing, including the delay of a nationwide real-estate tax. Healthcarestock Jiangsu Hengrui Medicine rebounded strongly this year, recovering from the broad-based sell-off inits sector which had been triggered by policy uncertainty in the previous quarter. In Taiwan, DeltaElectronics outperformed as its business performance continues to improve, on the back of growth in newbusinesses such as electric vehicles, automation and power system, more than offsetting the decline in thelegacy businesses of consumer power supply and networking products. Giant Manufacturing, a leadingbicycle manufacture, also rose thanks to some signs of China demand may finally be improving, afterdeclining for four successive years, while E-bike related growth remains strong.

Other notable contributors included HDFC Bank, a leading private sector bank in India, reflecting consistentmanagement execution and earnings growth, as well as Astra International in Indonesia, driven by the autosales recovery and by exceeding market earnings expectations. AIA Group in Hong Kong rose on strongresults, as well as in response to the receipt of approval to set up sales and services centres in Tianjin andShijiazhuang in China.

In terms of detractors from performance, Maruti Suzuki in India performed poorly on the back of weakerauto sales trends, however, we remain confident that the company is well positioned in the industry andexpect market conditions to recover. In Korea, E-Mart, the largest hypermarket operator in the country,underperformed as continued offline weakness and increasing online competition weighted on the shareprice, while S-Oil, an oil refining company, fell on weak results as well as a dividend cut.



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From the asset allocation perspective, the Company’s zero exposure to Malaysia and the underweightposition in Taiwan contributed, however, our off-benchmark exposure to Vietnam through the JPMorganVietnam Fund detracted from performance.

Outlook

The first quarter’s impressive equity rebound received a powerful new catalyst in March: the Fed quiteopenly backed away from its rate tightening bias and moved to the sidelines. To global investors, this shiftdiminishes the risk of policy error and adds to the relative attractiveness of equities.

Specific to China, we are encouraged by the most recent macro data, which suggest a recovery in theeconomy. March PMI data surprised on the upside, and the cut in VAT rates taking effect on 1st April shouldprovide an additional boost to industrial activity and consumption. These developments should also helpease investor concerns of a more pronounced slowdown in Asia’s largest economy.

The combination of these factors leads us to remain positive on Asian equities, particularly in view ofcurrent valuations, which remain below long-term averages.

The most important risks to the Asian market remain disappointment on the growth front, no deal on tradebetween the US and China, and the persistent strength of the US dollar. The primary headwind to marketsin recent months has been the rise in expectations of a global recession in the near term, with the Fed’sdovishness helping push the Treasury curve close to inversion (a popular recession signal). We do not seea recession as likely in the next twelve months, with our base case being slower but still positive growththat should be supportive for Asian equities.

On the US-China trade issues, recent developments have increased the risk that there will be no short termresolution to the friction which if protracted will potentially lead to lower growth and earnings. While we donot expect some of the longer term issues inherent in such a global rivalry to be addressed in the nearterm, an agreement soon will remove a significant overhang and will have a positive impact on markets.Finally, the stubborn concerns around growth and weakness in Europe have kept the dollar near 18-monthhighs. Recession fears have helped the dollar, and we will not be surprised to see the dollar start toweaken, should those fears prove unfounded. That said, a breakout in other direction for the dollar, tomulti-year highs could complicate the picture for Asian economies and their equity markets.

Ayaz EbrahimRobert LloydRichard TitheringtonInvestment Managers 29th May 2019


T E N L A R G E S T I N V E S T M E N T S


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AT 31ST MARCH

2019 2018 Valuation ValuationCompany Country £’000 %1 £’000 %1

Tencent China and Hong Kong 28,998 7.8 23,828 6.6

Taiwan Semiconductor Manufacturing Taiwan 25,085 6.7 24,373 6.7

Samsung Electronics2 South Korea 24,279 6.5 23,538 6.5

AIA China and Hong Kong 18,911 5.1 21,526 5.9

HDFC Bank India 14,566 3.9 12,408 3.4

Alibaba3 China and Hong Kong 14,412 3.9 13,003 3.6

Ping An Insurance4 China and Hong Kong 14,222 3.8 10,270 2.8

China Construction Bank4 China and Hong Kong 10,606 2.9 13,976 3.8

CNOOC5 China and Hong Kong 8,895 2.4 7,390 2.0

Hong Kong Exchanges & Clearing5 China and Hong Kong 8,508 2.3 6,260 1.7

Total 168,482 45.3

1 Based on total investments of £371.9m (2018: £363.2m).2 Includes preference shares.3 American Depository Receipts (ADRs).4 Hong Kong ‘H’ Shares, that is, shares in companies incorporated in mainland China and listed in Hong Kong and other foreign stock exchanges.5 Not included in the ten largest investments at 30th September 2018.

At 30 September 2018, the value of the ten largest equity investments amounted to £162.2 million representing 44.6% of totalinvestments.


P O R T F O L I O A N A L Y S I S

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GEOGRAPHICAL ANALYSIS

31st March 2019 30th September 2018 Portfolio Benchmark Portfolio Benchmark %1 % %1 %

China and Hong Kong 50.3 49.3 48.7 46.4

South Korea 17.2 14.7 16.8 16.9

Taiwan 10.8 12.8 11.3 14.0

India 8.8 10.4 7.5 9.7

Indonesia 3.9 2.5 4.7 2.2

Singapore 3.6 3.9 3.9 4.0

Thailand 3.0 2.7 3.0 2.8

Vietnam 1.9 — 3.0 —

Philippines 0.5 1.2 1.1 1.1

Malaysia — 2.5 — 2.8

Pakistan — — — 0.1

Total 100.0 100.0 100.0 100.0

1 Based on total investments of £371.9m (2018: £363.2m).

SECTOR ANALYSIS

31st March 2019 30th September 2018 Portfolio Benchmark Portfolio Benchmark %1 % %1 %

Financials 31.6 23.8 33.2 23.3

Information Technology2 15.3 16.6 26.9 30.6

Communication Services2 13.2 12.7 4.4 4.1

Consumer Discretionary2 13.0 13.3 10.1 8.3

Real Estate 6.7 6.6 7.4 5.8

Energy 5.9 4.7 2.8 5.1

Health Care 4.2 2.8 3.7 3.1

Consumer Staples 3.3 4.9 3.0 4.9

Industrials 2.8 6.8 3.4 6.9

Materials 2.1 4.6 1.4 4.8

Investment Fund 1.9 — 3.0 —

Utilities — 3.2 0.7 3.1

Total 100.0 100.0 100.0 100.0

1 Based on total investments of £371.9m (2018: £363.2m).2 Following the annual review of the Global Industry Classification Standard (GICS) structure by MSCI in 2018, certain companies previously classified under ConsumerDiscretionary and Information Technology sectors are reclassified under the Communication Services sector. Furthermore, certain companies previously classified underthe Information Technology sector are reclassified under the Consumer Discretionary sector.


Financial Statements

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S T A T E M E N T O F C O M P R E H E N S I V E I N C O M E

FOR THE SIX MONTHS ENDED 31ST MARCH 2019

(Unaudited) (Unaudited) (Audited)Six months ended Six months ended Year ended31st March 2019 31st March 2018 30th September 2018

Revenue Capital Total Revenue Capital Total Revenue Capital Total£’000 £’000 £’000 £’000 £’000 £’000 £’000 £’000 £’000

Gains on investments held atfair value through profit or loss — 17,642 17,642 — 22,124 22,124 — 21,033 21,033

Net foreign currencygain/(losses) — 17 17 — (327) (327) — (159) (159)

Income from investments 1,549 — 1,549 1,843 — 1,843 8,708 — 8,708Interest receivable and similar income 28 — 28 28 — 28 84 — 84

Gross return 1,577 17,659 19,236 1,871 21,797 23,668 8,792 20,874 29,666Management fee (912) — (912) (1,001) — (1,001) (1,972) — (1,972)Other administrative expenses (400) — (400) (416) — (416) (820) — (820)

Net return on ordinary activities before finance costs and taxation 265 17,659 17,924 454 21,797 22,251 6,000 20,874 26,874

Finance costs (24) — (24) (82) — (82) (138) — (138)

Net return on ordinary activities before taxation 241 17,659 17,900 372 21,797 22,169 5,862 20,874 26,736

Taxation charge (88) (133) (221) (41) (210) (251) (711) (210) (921)

Net return on ordinary activities after taxation 153 17,526 17,679 331 21,587 21,918 5,151 20,664 25,815

Return per share (note 3) 0.16p 18.63p 18.79p 0.35p 22.95p 23.30p 5.48p 21.96p 27.44p

All revenue and capital items in the above statement derive from continuing operations.

The ‘Total’ column of this statement is the profit and loss account of the Company and the ‘Revenue’ and ‘Capital’ columns representsupplementary information prepared under guidance issued by the Association of Investment Companies.

Net return on ordinary activities after taxation represents the profit for the period and also the total comprehensive income.


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S T A T E M E N T O F C H A N G E S I N E Q U I T Y


Called up Exercised Capitalshare Share warrant redemption Capital Revenuecapital premium reserve reserve reserves1 reserve1 Total£’000 £’000 £’000 £’000 £’000 £’000 £’000

Six months ended 31st March 2019(Unaudited)

At 30th September 2018 23,762 31,646 977 25,121 282,800 — 364,306Net return on ordinary activities — — — — 17,526 153 17,679 Dividends paid in the period (note 4) — — — — (6,997) (153) (7,150)

At 31st March 2019 23,762 31,646 977 25,121 293,329 — 374,835

Six months ended 31st March 2018 (Unaudited)

At 30th September 2017 23,762 31,646 977 25,121 271,661 — 353,167Net return on ordinary activities — — — — 21,587 331 21,918 Dividends paid in the period (note 4) — — — — (7,007) (331) (7,338)

At 31st March 2018 23,762 31,646 977 25,121 286,241 — 367,747

Year ended 30th September 2018(Audited)

At 30th September 2017 23,762 31,646 977 25,121 271,661 — 353,167 Net return on ordinary activities — — — — 20,664 5,151 25,815 Dividends paid in the year (note 4) — — — — (9,525) (5,151) (14,676)

At 30th September 2018 23,762 31,646 977 25,121 282,800 — 364,306

1 These reserves form the distributable reserves of the Company and may be used to fund distributions to investors via dividend payments.



S T A T E M E N T O F F I N A N C I A L P O S I T I O N

AT 31ST MARCH 2019

(Unaudited) (Unaudited) (Audited)31st March 2019 31st March 2018 30th September 2018

£’000 £’000 £’000

Fixed assets Investments held at fair value through profit or loss 371,869 364,531 363,154

Current assets Derivative financial assets 1 1 —Debtors 3,516 4,524 787Cash and cash equivalents 1,207 2,927 1,337

4,724 7,452 2,124

Creditors: amounts falling due within one year (1,757) (4,234) (972)Derivative financial liabilities (1) (2) —

Net current assets 2,966 3,216 1,152

Total assets less current liabilities 374,835 367,747 364,306

Net assets 374,835 367,747 364,306

Capital and reserves Called up share capital 23,762 23,762 23,762Share premium 31,646 31,646 31,646 Exercised warrant reserve 977 977 977Capital redemption reserve 25,121 25,121 25,121Capital reserves 293,329 286,241 282,800

Total shareholders’ funds 374,835 367,747 364,306

Net asset value per share (note 5) 398.4p 390.9p 387.2p


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£’000 £’000 £’000

Net cash outflow from operations before dividends and interest (note 6) (1,405) (1,850) (2,778)

Dividends received 845 734 7,522 Interest received 18 14 33 Interest paid (23) (128) (187)

Net cash (outflow)/inflow from operating activities (565) (1,230) 4,590

Purchases of investments (71,700) (120,004) (244,896)Sales of investments 79,247 126,834 251,805 Settlement of forward currency contracts 33 (22) (179)

Net cash inflow from investing activities 7,580 6,808 6,730

Dividends paid (7,150) (7,338) (14,676)

Net cash outflow from financing activities (7,150) (7,338) (14,676)

Decrease in cash and cash equivalents (135) (1,760) (3,356)

Cash and cash equivalents at start of period/year 1,337 4,687 4,687 Exchange movements 5 — 6 Cash and cash equivalents at end of period/year 1,207 2,927 1,337

Decrease in cash and cash equivalents (135) (1,760) (3,356)

Cash and cash equivalents consist of:Cash and short term deposits 1,207 2,927 1,337

Total 1,207 2,927 1,337



N O T E S T O T H E F I N A N C I A L S T A T E M E N T S


1. Financial statements

The information contained within the financial statements in this half year report has not been audited or reviewed by theCompany’s auditors.

The figures and financial information for the year ended 30th September 2018 are extracted from the latest published financialstatements of the Company and do not constitute statutory accounts for that year. Those financial statements have beendelivered to the Registrar of Companies and include the report of the auditors which was unqualified and did not containa statement under either section 498(2) or 498(3) of the Companies Act 2006.

2. Accounting policies

Basis of accounting

The financial statements have been prepared in accordance with the Companies Act 2006, FRS 102 ‘The Financial ReportingStandard applicable in the UK and Republic of Ireland’ of the United Kingdom Generally Accepted Accounting Practice(‘UK GAAP’) and with the Statement of Recommended Practice ‘Financial Statements of Investment Trust Companies andVenture Capital Trusts’ (the ‘SORP’) issued by the Association of Investment Companies in November 2014 and updated inFebruary 2018.

FRS 104, ‘Interim Financial Reporting’, issued by the FRC in March 2015 has been applied in preparing this condensed set offinancial statements for the six months ended 31st March 2019.

All of the Company’s operations are of a continuing nature.

The accounting policies applied to this condensed set of financial statements are consistent with those applied in the financialstatements for the year ended 30th September 2018.

3. Return per share


£’000 £’000 £’000

Return per share is based on the following:Revenue return 153 331 5,151Capital return 17,526 21,587 20,664

Total return 17,679 21,918 25,815

Weighted average number of shares in issue 94,081,493 94,081,493 94,081,493

Revenue return per share 0.16p 0.35p 5.48pCapital return per share 18.63p 22.95p 21.96p

Total return per share 18.79p 23.30p 27.44p


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4. Dividends


£’000 £’000 £’000

Dividends paid2018 fourth quarterly dividend of 3.9p (2017: 3.8p) 3,669 3,575 3,5752019 first quarterly dividend of 3.7p (2018: 4.0p) 3,481 3,763 3,7632018 second quarterly dividend of 3.9p — — 3,6692018 third quarterly dividend of 3.9p — — 3,669

Total dividends paid in the period/year 7,150 7,338 14,676

A second interim dividend of 4.0p has been declared for payment on 9th May 2019 for the financial year ending 30th September2019.

Dividend payments in excess of the revenue amount will be paid out of the Company’s distributable capital reserve.

5. Net asset value per share

(Unaudited) (Audited) (Audited)Six months ended Six months ended Year ended31st March 2019 31st March 2018 30th September 2018

Net assets (£’000) 374,835 367,747 364,306Number of shares in issue 94,081,493 94,081,493 94,081,493

Net asset value per share 398.4p 390.9p 387.2p

6. Reconciliation of net return on ordinary activities before finance costs and taxation to net cashoutflow from operations before dividends and interest


£’000 £’000 £’000

Net return on ordinary activities before finance costsand taxation 17,924 22,251 26,874

Less capital return on ordinary activities before financecosts and taxation (17,659) (21,797) (20,874)

Increase in accrued income and other debtors (500) (894) (261)Decrease in accrued expenses (65) (107) (55)Overseas withholding tax (221) (251) (921)Dividends received (845) (734) (7,522)Interest received (18) (14) (33)Realised losses on foreign currency transactions (28) (166) (82)Exchange gains/(loss) on liquidity fund 7 (138) 96

Net cash outflow from operating activities (1,405) (1,850) (2,778)




7. Fair valuation of instruments

The fair value hierarchy disclosures required by FRS 102 are given below:


Assets Liabilities Assets Liabilities Assets Liabilities£’000 £’000 £’000 £’000 £’000 £’000

Level 1 364,652 — 357,770 — 352,128 —Level 21 7,218 (1) 6,762 (2) 11,026 —

Total 371,870 (1) 364,532 (2) 363,154 —

1 Includes investment in JPMorgan Vietnam Opportunities Fund, an Open Ended Investment Company (OEIC) and forward foreign currency contracts.


I

Interim Management Report

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I N T E R I M M A N A G E M E N T R E P O R T | 2 3

I N T E R I M M A N A G E M E N T R E P O R T

The Company is required to make the following disclosures in its half year report:

Principal Risks and Uncertainties

The principal risks and uncertainties faced by the Company have not changed since the Company’s year end and fall into the followingbroad categories: investment and strategy; market; accounting, legal and regulatory; corporate governance and shareholder relations;operational; and financial. Information on each of these areas is given in the Business Review within the Annual Report and Accountsfor the year ended 30th September 2018.

Related Parties Transactions

During the first six months of the current financial year, no transactions with related parties have taken place which have materiallyaffected the financial position or the performance of the Company during the period.

Going Concern

The Directors believe, having considered the Company’s investment objectives, risk management policies, capital management policiesand procedures, liquid nature of the portfolio and expenditure projections, that the Company has adequate resources, an appropriatefinancial structure and suitable management arrangements in place to continue in operational existence for the foreseeable future and,more specifically, that there are no material uncertainties pertaining to the Company that would prevent its ability to continue in suchoperational existence for at least twelve months from the date of the approval of this half yearly financial report. For these reasons,they consider there is reasonable evidence to continue to adopt the going concern basis in preparing the accounts.

Directors’ Responsibilities

The Board of Directors confirms that, to the best of its knowledge:

(i) the condensed set of financial statements contained within the half yearly financial report has been prepared in accordance withFRS 104 ‘Interim Financial Reporting’ and gives a true and fair view of the state of affairs of the Company and of the assets,liabilities, financial position and net return of the Company, as at 31st March 2019, as required by the UK Listing AuthorityDisclosure and Transparency Rules 4.2.4R; and

(ii) the interim management report includes a fair review of the information required by 4.2.7R and 4.2.8R of the UK ListingAuthority Disclosure and Transparency Rules.

In order to provide these confirmations, and in preparing these financial statements, the Directors are required to:

• select suitable accounting policies and then apply them consistently;

• make judgements and accounting estimates that are reasonable and prudent;

• state whether applicable UK Accounting Standards have been followed, subject to any material departures disclosed and explainedin the financial statements; and

• prepare the financial statements on the going concern basis unless it is inappropriate to presume that the Company will continuein business;

and the Directors confirm that they have done so.

For and on behalf of the Board

Bronwyn Curtis OBEChairman 29th May 2019


Shareholder Information

S


GLOSSARY OF TERMS AND ALTERNATIVE PERFORMANCE MEASURES ( ‘APMs’ )

S H A R E H O L D E R I N F O R M A T I O N | 2 5

Return to Shareholders (APM)

Total return to shareholders, on a last traded price to last traded price basis, assuming that all dividends received were reinvested,without transaction costs, into the shares of the Company at the time the shares were quoted ex-dividend.

Six months endedTotal return calculation Page 31st March 2019

Opening share price (p) 4 340.5 (a)Closing share price (p) 4 356.0 (b)Total dividend adjustment factor1 1.024272 (c)Adjusted closing share price (p) (d = b x c) 364.6 (d)

Total return to shareholders (e = d / a – 1) 7.1% (e)

1 The dividend adjustment factor is calculated on the assumption that the dividends paid out by the Company are reinvested into the shares of the Company at the last tradedprice quoted at the ex-dividend date.

Return on Net Assets (APM)

Total return on net asset value (‘NAV’) per share, on a bid value to bid value basis, assuming that all dividends paid out by the Companywere reinvested, without transaction costs, into the shares of the Company at the NAV per share at the time the shares were quotedex-dividend.

Six months endedTotal return calculation Page 31st March 2019

Opening cum-income NAV per share (p) 4 387.2 (a)Closing cum-income NAV per share (p) 4 398.4 (b)Total dividend adjustment factor2 1.021625 (c)Adjusted closing cum-income NAV per share (p) (d = b x c) 407.0 (d)

Total return on net assets (e = d / a – 1) 5.1% (e)

2 The dividend adjustment factor is calculated on the assumption that the dividends paid out by the Company are reinvested into the shares of the Company at the cum-incomeNAV at the ex-dividend date.

In accordance with industry practice, dividends payable which have been declared but which are unpaid at the balance sheet date arededucted from the NAV per share when calculating the total return on net assets.

Benchmark return

Total return on the benchmark, on a closing-market value to closing-market value basis, assuming that all dividends received werereinvested, without transaction costs, in the shares of the underlying companies at the time the shares were quoted ex-dividend(see page 3).

The benchmark is a recognised index of stocks which should not be taken as wholly representative of the Company’s investmentuniverse. The Company’s investment strategy does not follow or ‘track’ this index and consequently, there may be some divergencebetween the Company’s performance and that of the benchmark.

Gearing/Net Cash (APM)

Gearing represents the excess amount above shareholders’ funds of total investments, expressed as a percentage of the shareholders’funds. If the amount calculated is negative, this is shown as a ‘net cash’ position.

31st March 30th September 2019 2018Gearing calculation Page £’000 £’000

Investments held at fair value through profit or loss 17 371,869 363,154 (a)Net assets 17 374,835 364,306 (b)

Gearing/(net cash) (c = a / b – 1) (0.8)% (0.3)% (c)


S


GLOSSARY OF TERMS AND ALTERNATIVE PERFORMANCE MEASURES ( ‘APMs’ )

Ongoing Charges (APM)

The ongoing charges represent the Company’s management fee and all other operating expenses excluding finance costs payable andexcluding/including performance fee payable, expressed as a percentage of the average of the daily cum-income net assets during theyear and is calculated in accordance with guidance issued by the Association of Investment Companies.

The figure as at 31st March 2019 is an estimated annualised figure based on the numbers for the six months ended 31st March 2019.

31st March 30th September 2019 2018Ongoing charges calculation Page £’000 £’000

Management Fee 15 1,824 1,972 Other administrative expenses 15 800 820

Total management fee and other administrative expenses 2,624 2,792 (a)

Average daily cum-income net assets 350,402 372,775 (b)

Ongoing charges (c = a / b) 0.75% 0.75% (c)

Share Price Discount/Premium to Net Asset Value (‘NAV’) per Share (APM)

If the share price of an investment trust is lower than the NAV per share, the shares are said to be trading at a discount. The discount isshown as a percentage of the NAV per share.

The opposite of a discount is a premium. It is more common for an investment trust’s shares to trade at a discount than at a premium(page 4).

Performance Attribution Definitions:

Stock selection

Measures the effect of investing in securities to a greater or lesser extent than their weighting in the benchmark, or of investingin securities which are not included in the benchmark.

Dividends/Residual

Represents timing differences in respect of cash flows and dividends.

Management fee/Other expenses

The payment of fees and expenses reduces the level of total assets, and therefore has a negative effect on relative performance.


S H A R E H O L D E R I N F O R M A T I O N | 2 7

W H E R E T O B U Y J . P . M O R G A N I N V E S T M E N T T R U S T S

J.P. Morgan investment trusts are eligible investments withina stocks & shares individual savings account (ISA) and Junior ISA.

For the 2019/20 tax year, from 6th April 2019 and ending5th April 2020, the annual ISA allowance is £20,000 andJunior ISA allowance is £4,368.

You can invest in a J.P. Morgan investment trust through thefollowing:

1. Via a third party provider

Third party providers include:

Please note this list is not exhaustive and the availability ofindividual trusts may vary depending on the provider. Thesewebsites are third party sites and J.P. Morgan Asset Managementdoes not endorse or recommend any. Please observe each site’sprivacy and cookie policies as well as their platform chargesstructure.

2. Through a professional adviser

Professional advisers are usually able to access the products of allthe companies in the market and can help you find an investmentthat suits your individual circumstances. An adviser will let youknow the fee for their service before you go ahead. You can findan adviser at unbiased.co.uk

You may also buy investment trusts through stockbrokers, wealthmanagers and banks.

To familiarise yourself with the Financial Conduct Authority (FCA)adviser charging and commission rules, visit fca.org.uk

Information for J.P. Morgan investment accountand stocks & shares ISA account holders

On 8th April 2019, J.P. Morgan Asset Management informedholders of J.P. Morgan investment accounts and stocks & sharesISA savings products that it had decided to cease managing theseaccounts. Investors are able to remain invested in J.P. Morganmanaged investment trusts by transferring to another serviceprovider.

Information regarding the transfer arrangements has beenprovided, detailing the options to; transfer to an alternative thirdparty provider, re-register the investment into certificated formor sell the investment. Where no alternative instruction isreceived the account will be transferred later in the year, in linewith the correspondence sent by J.P. Morgan on 8th April 2019.

For full details of all the options available to investors, pleaserefer to correspondence sent by J.P. Morgan on 8th April 2019,contact your financial adviser or contact J.P. Morgan’s ClientAdministration Centre on 0800 20 40 20/+44 (0) 1268 44 44 70.

AJ BellAlliance Trust SavingsBarclays Smart InvestorCharles Stanley DirectFundsNetwork

Hargreaves LansdownInteractive InvestorSelftradeThe Share Centre



S H A R E H O L D E R I N F O R M A T I O N

Avoid investment fraud1 Reject cold calls

If you’ve received unsolicited contact about an investment opportunity, chances are it’s a high risk investment or a scam. You should treat the call with extreme caution. The safest thing to do is to hang up.

2 Check the FCA Warning List The FCA Warning List is a list of �rms and individuals we know are operating without our authorisation.

3 Get impartial advice Think about getting impartial �nancial advice before you hand over any money. Seek advice from someone unconnected to the �rm that has approached you.

Report a ScamIf you suspect that you have been approached by fraudsters please tell the FCA using the reporting form at www.fca.org.uk/consumers/report-scam-unauthorised-�rm. You can also call the FCA Consumer Helpline on 0800 111 6768

If you have lost money to investment fraud, you should report it to Action Fraud on 0300 123 2040 or online at www.actionfraud.police.uk

Find out more at www.fca.org.uk/scamsmart

Investment scams are designed to look like genuine investmentsSpot the warning signs

Have you been:

• contacted out of the blue• promised tempting returns

and told the investment is safe• called repeatedly, or• told the offer is only available

for a limited time?

If so, you might have been contacted by fraudsters. Remember: if it sounds too good to be true,

it probably is!

Be ScamSmart


I N F O R M AT I O N A B O U T T H E C O M PA N Y

HistoryThe Company was launched in September 1997 as a rollover vehicle forshareholders in The Fleming Far Eastern Investment Trust plc. The Companyadopted its present name following approval from shareholders at the AnnualGeneral Meeting in February 2006.

DirectorsBronwyn Curtis OBE (Chairman) June AitkenDean BuckleyPeter MoonSir Richard Stagg

Company NumbersCompany registration number: 3374850LEI: 5493006R74BNJSJKCB17

Ordinary SharesLondon Stock Exchange Sedol number: 0132077ISIN: GB0001320778Bloomberg ticker: JAI LN

Market InformationThe Company’s Ordinary shares are listed on the London Stock Exchange. Themarket price of the Ordinary shares is shown daily in the Financial Times, TheTimes, The Daily Telegraph and The Scotsman. The Share price of the Ordinaryshares is on the JPMorgan internet site at www.jpmasian.co.uk where the pricesare updated every fifteen minutes during trading hours.

Websitewww.jpmasian.co.uk

Share TransactionsThe Company’s shares may be dealt in directly through a stockbroker orprofessional adviser acting on an investor’s behalf.

Manager and Company SecretaryPMorgan Funds LimitedCompany’s Registered Office60 Victoria EmbankmentLondon EC4Y 0JPTelephone number: 020 7742 4000

For company secretarial and administrative matters, please contact AlisonVincent.

DepositaryThe Bank of New York Mellon (International) Limited1 Canada SquareLondon E14 5AL

The Depositary has appointed JPMorgan Chase Bank N.A. as the Company’scustodian.

RegistrarsEquiniti LimitedReference 1357Aspect HouseSpencer RoadLancingWest Sussex BN99 6DATelephone number: 0371 384 2373

Lines open 8.30 a.m. to 5.30 p.m. Monday to Friday. Calls to the helpline will costno more than a national rate call to a 01 or 02 number. Callers from overseasshould dial +44 121 415 0225.

Notifications of changes of address and enquiries regarding share certificates ordividend cheques should be made in writing to the Registrar quotingreference 1357.

Independent AuditorPricewaterhouseCoopers LLPChartered Accountants and Statutory Auditors 7 More London Riverside London SE1 2RT

BrokersCenkos Securities plc 6, 7, 8 Tokenhouse Yard London EC2R 7AS

Savings Product AdministratorsFor queries on the J.P. Morgan Investment Account and J.P. Morgan ISA, seecontact details on the back cover of this report.

AwardsAwarded best Asia Pacific Equities Investment Trust at the 20th Investment WeekInvestment Company Awards 2018.

Awarded best Asia Pacific Investment Trust at the Money Observer InvestmentTrust Awards 2019.

FINANCIAL CALENDAR

Financial year end 30th September

Final results announced December

Half year end 31st March

Half year results announced May

Dividend on ordinary shares paid February/May/August/November

Annual General Meeting February

A member of the AIC

S H A R E H O L D E R I N F O R M AT I O N | 2 9

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Telephone calls may be recorded and monitored for security and training purposes.

GB I102 | 05/19

J.P. MORGAN HELPLINE

Freephone 0800 20 40 20 or +44 (0) 1268 444470.Telephone lines are open Monday to Friday, 9am to 5.30pm.

www.jpmasian.co.uk

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