Investment trust subscription shares offer shareholders a different investment profile says J.P. Morgan Asset Management
London, 7 December 2009: J.P. Morgan Asset Management says investors can benefit from the future potential of an investment trust if they understand how subscription shares can be utilised.
The Group confirmed there have been a number of issues of subscription shares during 2009 and said that subscription shares, which have similar characteristics to warrants in that they offer shareholders the right to purchase shares at specified future dates and at predetermined prices, are proving popular with investors.
James Saunders Watson, Head of Sales and Marketing for Investment Trusts at J.P. Morgan Asset Management, said, “Understanding the fixed life and exercise price levels of a subscription share is key to ensuring investors benefit from the potential future gains that can be made from subscription shares.”
Saunders Watson went on to say, “Investors are not obliged to exercise their subscription shares and can still sell them in the market. However, many recent issues have stepped exercise prices that are triggered at different time periods which affects the price of the subscription share. Investors that are choosing to exercise their subscription share rights when the market price of an investment trust’s ordinary share exceeds the conversion price by more than the subscription share price are benefiting from potentially greater exposure to an investment trust's future growth.”
The JPMorgan Indian Investment Trust has issued subscription shares in the form of a bonus issue to existing shareholders. In a recent letter to shareholders, the investment trust’s board told investors that the conversion price of their subscription shares will increase from 227 pence to 247 pence on 3 January 2010. This means that, if an investor decides to convert their subscription shares before 3 January 2010, they will acquire one new JPMorgan Indian Investment Trust ordinary share for 227 pence per share for each subscription share converted. The current mid-market price of JPMorgan Indian Investment Trust’s ordinary shares is 369.20 pence per share (30.11.09). After 3 January 2010 investors retain the right to convert their subscription shares, but the cost rises to 247 pence per share. The conversion price increases again to 291 pence per share on 3 January 2012.
For further information please contact:
J.P.Morgan Asset Management
Jayne Fieldhouse
Telephone: 020 7742 8337
Email: jayne.e.fieldhouse@jpmorgan.com
Lansons Communications
Caroline Macleod-Smith
Telephone: 020 7566 9702
Email: carolinems@lansons.com
Notes to Editors
J.P. Morgan Asset Management is part of J.P. Morgan Chase & Co. and is a global asset management leader providing world-class investment solutions to clients. With US$1.3 trillion in assets under management (the Asset Management client funds of J.P. Morgan Chase & Co. as at Sept 30th 2009) and offices in 40 locations around the world, J.P. Morgan Asset Management offers global coverage with a strong local market presence, and leadership positions in most asset classes.
J.P. Morgan Asset Management is a trading name of J.P. Morgan Asset Management Marketing Limited which has issued this material in the United Kingdom and which is authorised and regulated by the Financial Services Authority. Registered in England No. 288553. Registered office: 125 London Wall, London EC2Y 5AJ.
Any past performance referred to in this material is not a guide to future performance and the value of investments, and any income from them, can fall as well as rise. Any tax concessions referred to are not guaranteed and their value will depend on the individual circumstances of investors. Stock market linked investments carry a number of inherent risks. These risks will increase where fluctuations in exchange rates impact on the value of any underlying investments or where the investment is exposed to smaller companies or emerging markets. Investments in fixed income securities that are not rated as investment grade represent a greater risk to an investor’s capital.