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| Share Name | Share Symbol | Market | Stock Type |
|---|---|---|---|
| JPMor. I&G | JIGI | London | Ordinary Share |
| Price Change | Price Change % | Share Price | Last Trade
|
|
|---|---|---|---|---|
| 0.00 | 0.00% | 102.50 | 01:00:00 |
| Open Price | Low Price | High Price | Close Price | Previous Close |
|---|---|---|---|---|
| 102.50 | 102.50 |
| Top Posts |
|---|
Posted at 07/7/2014 09:15 by skyship Here is how I see it as of 4th Jul'14. I'm still not certain about the allocation of the 1.72p Revenue Reserve mentioned by Tiltonboy; a little piece of hidden upside perhaps. I'll post further on that when I have clarification from the Company.INTRODUCTION: Finding value stocks with a yield is proving more and more difficult; so I'm pleased to have come across JPMorgan Income & Growth Trust plc (JIGI). From their website: "JIGI is a Split Capital trust which invests in a portfolio of approximately 60% UK equities and 40% global equities and bonds, with the aim of providing leveraged long-term capital growth for holders of capital shares, or an attractive income for holders of income shares." The Company's investment objectives are to meet the final capital entitlement of the Income Shareholders (103.6p on 30th Nov'16) and to provide them with a regular quarterly income (1.10p/Qtr; 4.40p/year); as well as to provide capital growth for Capital Shareholders. THE VALUE: The reason for buying the Income shares at the offer price of 94p is that as at 3rd July the Trust holds a portfolio valued at a net £70.3m. To pay out the full entitlement of 103.6p to the Income shareholders the Trust needs £63.8. The excess capital accrues to the benefit of the Capital shareholders; but also effectively provides a cushion against Market falls for the Income shareholders. That cushion of currently £6.5m means that the 103.6p entitlement is currently protected from a 9.2% Market fall before being chipped away by any further falls. In effect the Income shareholder return is protected from falls in the FTSE100 back to c6230. The 4.4p dividend provides a current yield of 4.68%. Add the redemption yield to maturity of 4.04% and the Gross Redemption Yield = a very acceptable 8.72%. THE LIMITATIONS: 1. Assuming the Trust hits the Nov'16 requirement of £63.8m to pay out the Full Entitlement, then the GRY will have been 8.72%; with perhaps some small upside or downside due to a dividend variation. HOWEVER, to all intents and purposes that 8.72% will not be exceeded; so for many investors the return may not be high enough. 2. As with any equity investment there is of course an element of RISK. I've explained the mitigating factor of the Reserve built up for the benefit of the Capital shareholders. This Reserve needs to be monitored should Markets decline. SUMMARY: JIGI offers a prospective return which is extremely attractive versus, say, the ever-reducing GRY returns from Zero Dividend Preference shares, where 4%pa is now hard to achieve. That 9% "Cushion" protecting the 8.7% return suggests to me that JIGI merits a corner of a SIPP. In my case not the Maximum 10% allocation; but I'm certainly comfortable with a 6.5% allocation. |
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