LONDON - JPMorgan's range of investment trusts have announced their latest indicative gearing ratios, reflecting the trusts' levels of borrowing compared to their net asset values as of November 22, 2024. The gearing ratio is a measure of financial leverage, indicating the extent to which a company's operations are funded by lenders versus shareholders.
Among the trusts, JPMorgan Japanese Investment Trust PLC (the 'Company') reported one of the highest gearing ratios at 14.1%, while JPMorgan Global Growth & Income PLC showed a relatively low gearing level at 0.4%. The Mercantile Investment Trust (LON:MRCM) PLC also displayed a significant gearing ratio of 14.8%.
Conversely, some trusts have reported negative gearing ratios, which can occur when the cash and equivalent holdings of a trust exceed its debts. JPMorgan Asia Growth & Income PLC and JPMorgan Emerging Markets Investment Trust PLC announced negative gearing ratios of -0.2% and -0.8% respectively, suggesting a conservative approach to borrowing.
The announcement of these ratios provides investors with an insight into the financial structure and risk profile of each trust. Higher gearing ratios can indicate a more aggressive borrowing strategy which can amplify both gains and losses. Negative gearing, on the other hand, may be seen as a more cautious financial strategy.
The gearing ratios for other trusts in the announcement include JPMorgan American Investment Trust PLC at 2.7%, JPMorgan China Growth & Income PLC at 4.4%, JPMorgan Claverhouse Investment Trust PLC at 7.8%, JPMorgan European Growth & Income PLC at 5.3%, JPMorgan European Discovery (NASDAQ:WBD) Trust PLC at 4.9%, JPMorgan Global Emerging Markets Income Trust PLC at 6.6%, JPMorgan Indian Investment Trust PLC at -0.4%, JPMorgan UK Small Cap Growth & Income PLC at 10.4%, and JPMorgan US Smaller Companies Investment Trust PLC at 4.1%.
The information provided is based on a press release statement, which offers a snapshot of the trusts' financial leverage as a key indicator for investors. It is important for investors to consider gearing ratios in the context of each trust's investment strategy and market conditions. Gearing can affect the performance of investment trusts, particularly in volatile markets, and is one of many factors investors may consider when evaluating investment opportunities.
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