JGGI trails benchmark by 11 points as managers admit mistakes

JGGI grew its net asset value 16.7% in the year to the 30th of June, well short of the 27.7% returned by its MSCI ACWI benchmark.

The share price returned 15.1% over the same year, according to the final results published today at 7am.

That leaves a gap of 11.0 points on net asset value. The managers did not dodge it: “We acknowledge that we made several stock selection and portfolio construction mistakes.” The shares were quoted at 615p, up 0.3%, as of 09:09 UK time.

Attribution shows where it went wrong. Stock selection subtracted 9.5 points and asset allocation 1.9. The managers said they underestimated the scale of the AI boom, ran underweight to momentum stocks, and were hurt by consumer holdings including Lowe’s, McDonald’s and Yum! China.

In their words, “In these market conditions, resilience was simply not enough.” The longer record is the defence.

JGGI is ahead over five and ten years, and has beaten the benchmark in eight of the last ten years. The managers say they are diversifying AI exposure, tightening factor risk and adding new momentum lenses. The Board says it is encouraging that performance improved towards the end of the period.

Chairman James MacPherson said the Board “remains confident in the Company’s investment strategy”. The managers call the outlook an entry point that is “especially compelling”.

Shareholders are paid in the meantime. The company paid 23.00p for the year just ended and intends to pay 24.8p for the new year, up 7.8% and the eleventh consecutive annual increase. The first 6.2p payment is due today, to holders on the register at the close on the 28th of August.

The company also spent £198.3m buying back 34,486,162 shares, 5.95% of those in issue, at a weighted-average discount of 3.25%. The average discount over the year was 2.7% and 2.2% at the year-end. The discount currently stands at 3.5%. The AGM is at 3pm on the 15th of December.