Welcome to the Morningstar series, "Why Should I Invest With You?" I'm Holly Black. With
me is Tim Woodhouse. He's Manager of the JPMorgan Global Growth & Income Trust (JPGI).
Hello. Hello. Thank you for having me.
Pleasure. Thanks for coming by. Can I ask a bit about what the Trust does?
Absolutely. So, the Global Growth & Income Trust is essentially exactly what it says.
We're looking for really great ideas from all around the world, which will generate
good growth, which will see capital appreciation, but the fund also has the ability to pay a
4% dividend yield to our holders every year. So, it's in a way a bit of having your cake
and eating it. We are not constrained to only stocks with high dividend yield; we're not
only paying the yield out of that; we pay it out of reserves. And what that really allows
us to do is just find those wonderful companies all around the world, of which there are there
are many, but not all of them pay a dividend. And so, by taking the breadth of our resources,
the wonderful analysts that we have at JPMorgan, the work they do with companies all over the
world, what we can do is we can find those best ideas. And that's what you really get
with this Trust is those best ideas and you also get an income, which we know especially
in a low yield world is ever more important. But obviously, navigating the entire global
market can't be easy, particularly at a time when there's so much uncertainty. You know,
we're talking about the recession word and wondering if stock markets have peaked. How
do you – where do you even start? It's a challenge. But we're lucky that we
do have wonderful resources and wonderful people to work with. And for us, what we – you're
absolutely right. There's so much noise out there, it's so easy to get caught up in what's
going on in the macro economy, what's the Fed going to do, what on earth is going on
with the trade war. And I think you have to really just push through that. You have to
find the companies that regardless of whether we have a recession in the next year or two,
the companies in five years' time are going to be worth significantly more than they are
today. Now, that doesn't mean we ignore the economic
outlook completely. I think it's very clear that the industrial economy is in a challenging
spot once again, just as it was back at the end of 2015, and into 2016. And trade wars
really aren't good for confidence. And so, when you're thinking about CEOs in industries
thinking about whether to invest, it's natural to expect some softness. But I think that's
quite well understood. The thing I'm much more focused on really is the consumer. The
consumer has become much more important to the wider economy versus 10 years ago. And
so, I'm watching jobs data carefully. I'm watching consumer confidence data carefully.
I don't see the leverage in the system, which leads us into another 2008-2009.
So, if we have a minor recession, which I still think is probably unlikely, but if we
did, I think we would get through that actually quite quickly and in quite good shape. So,
what that leads me to think is really the focus should be on the company fundamentals.
And we work with 50-plus analysts we have all over the world to find those best ideas
and look for those which are not dependent just on the next six months and the outlook
and what happens there, but those which have really great characteristics to really great
companies that will generate significant amounts of cash flow for us as shareholders in the
future. And what are a couple of those characteristics
that make a great company? I think it's always important to look for
some kind of organic growth. We've seen with a lot of industries over the years that if
your industry isn't growing, you face a multitude of problems, whether that's continually cutting
costs to try and get that margin profile up. Well, that can only go on for so long. Whether
it's doing unnecessary acquisitions just to try and pretend that there is still some kind
of growth going on or trying to buy yourself out of a hole. So, organic growth in an industry
is a very good starting point because it allows you to make mistakes. If your industry is
growing, everyone has execution missteps. And so, you have to accept that, but you have
to understand what your margin for error is. And growth really does give you that little
bit more of a margin for error. Super. Well, thank you so much for your time.
Thank you. And thanks for joining us.