Half-year Report

LONDON STOCK EXCHANGE ANNOUNCEMENT

JPMORGAN EUROPEAN INVESTMENT TRUST PLC

UNAUDITED HALF YEAR RESULTS FOR THE SIX MONTHS ENDED30TH SEPTEMBER 2016

chairman's statement

Performance

In the six months to 30th September 2016 the increases in the Company's Growth and Income share prices were 7.1% and 0% respectively. With net dividends re-invested, the total returns to the Company's Growth and Income shareholders were 9.3% and 1.9% respectively.

As can be seen in the Investment Managers' Report, over the same period, the percentage increase in the Company's Growth and Income NAVs was more than the increase in the share price. These lower increases in the price of the Company's Growth and Income shares compared with the Growth and Income NAVs can be explained by the uncertainty in the markets following the Brexit vote, and mirrors the widening of discounts experienced across the investment trust sector.

In their report on pages 6 and 7 of the Company's Half Year Report and Accounts, the Investment Managers comment on some of the factors underlying the performance of the two portfolios including performance against the benchmark over the six month period, as well as commenting on the economic and market background.

Revenue and Dividends

The Board's aim is that annual dividend payments on the Growth shares continue to be broadly in line with revenues received on the underlying portfolio.

Revenue return per share on the Growth portfolio for the six months to 30th September 2016 (calculated by reference to the average number of shares in issue over the period) amounted to 5.79 pence per share (2015: 4.16 pence). A first interim dividend of 4.85 pence per Growth share was paid on 7th October 2016 (2015: 4.85 pence).

Revenue return per share on the Income portfolio for the half year (again, calculated by reference to the average number of shares in issue over the period) amounted to 4.86 pence per share (2015: 3.86 pence). The first quarterly interim dividend of 1.10 pence per Income share (2015: 1.10 pence) was paid on 16th June 2016 and a second quarterly interim dividend also of 1.10 pence per Income share was paid on 7th October 2016 (2015: 1.10 pence). A third quarterly interim dividend of 1.10 pence per Income share (2015: 1.10 pence) was declared on 22nd November 2016 for payment on 13th January 2017. The Board's aim is to provide a regular stream of dividend income on a quarterly basis, subject to the availability of distributable reserves. The timing of the dividend declarations for the Growth second interim and Income fourth interim is expected to continue to be made ahead of the conversion opportunity in March each year.

Gearing

There has been no change in the Investment Manager's permitted gearing range, as previously set by the Board, of 10% net cash to 20% geared. At 30th September 2016 the Growth portfolio had 1.0% net cash and the Income portfolio was 1.6% geared. These relatively low levels of gearing reflect the uncertainty following the Brexit vote.

Conversions

The Company's next share conversion will be in March 2017 and details of the process will be posted on the Company's website in late January 2017.

Share Repurchases

The Board has a proactive approach to the use of its share repurchase powers. It remains of the view that it is important to seek to address imbalances in the supply of and demand for the Company's shares and to minimise thereby the volatility and absolute level of the discount to net asset value at which the Company's shares trade. The Board do not wish to see the discounts widen beyond 10% on an ongoing basis. The precise level and timing of repurchases pursuant to this policy depend upon prevailing market conditions. Over the six months under review the discount levels have averaged 10.2% for the Growth shares and 9.2% for Income Shares (at fair value). On three separate occasions during the six month period the Company repurchased a total of 181,271 Growth shares.

Investment Managers

Tom Buckingham, a Portfolio Manager in the J.P. Morgan Asset Management European Equity Team, is now identified as an Investment Manager in the Company's Report and Accounts. This is in order to reflect the importance of the role that Tom undertakes and illustrate the depth of support provided to the Company by the Manager.

The Board

As referred to in my Chairman's Statement included in the Company's Annual Report and Accounts, in order to reflect the additional burden placed upon the directors by new regulation and maintain the level of fees in line with the investment trust industry as a whole, the Company's directors' fees were increased effective from 1st April 2016. The previous increase was on 1st April 2014. Further details were provided on page 47 of the Company's 31st March 2016 Annual Report and Accounts.

Outlook

Your Board remain watchful to the current state of the markets and believe that the Manager continues to position the Growth and Income portfolios to best achieve the Company's objectives for its shareholders.

For and on behalf of the Board

Andrew Adcock

Chairman

24th November 2016

Investment managers' report

Since the end of our last financial year, the Growth portfolio has seen its NAV rise by 12.9% on a total return basis, against a benchmark (MSCI Europe ex UK Index) which rose by 13.2%. For the Income portfolio, the NAV rose by 13.0% on a total return basis, against a benchmark (MSCI Europe ex UK Index) return of +13.2%. Both portfolios have risen in absolute terms and outperformed the benchmark over three years and five years.

The six month period under review could best be characterised as a battle between the tailwinds of improving economic momentum in Europe, and the headwinds of politics. The most obviously turbulent political event was the outcome of the UK's advisory referendum on UK membership, which returned a decision by 51.9% to 48.1% to leave the European Union. This brought a change of government in the UK and a change in government policy, both of which are outside the scope of this report, but it also sparked a sharp fall in Sterling against all currencies. This had a dramatically positive effect on the company's returns in both portfolios, given that we invest in Euro-denominated assets. Indeed in local currency terms our benchmark was more or less flat over all periods, whereas in Sterling it rose in double-digit terms. In NAV terms both portfolios made new all-time highs in both absolute terms, and relative to their benchmark.

It is too early to know where Sterling will settle, since it will depend on an enormous number of variables about trade which we cannot know yet. On a purchasing power basis Sterling looks moderately undervalued, but this supposes that inflation will remain roughly in line with the Bank of England's target, and the longer that the current weakness continues the higher inflation is likely to be.

Within Europe the referendum result gave a lot of succour to extremist parties like the Freedom party in the Netherlands and the National Front in France. We are also seeing a challenge to the incumbent Italian government from the populist 5 Star Movement, but in point of fact in other countries the populist pendulum swung the other way: in Spain, the left-wing Podemos lost ground in the second general election, and in Greece the incumbent Syriza government now trails the right-wing New Democracy party by 15-20% in opinion polls, having been in the lead by around 7% at the end of 2015.

Within the markets we saw the continuation of Europe's slow recovery, and we are also starting to see a pick-up in inflation, which means that nominal GDP is accelerating - and this should mean better news for corporate revenues. Cost control in companies remains very good, which means that in a slow growth environment they are defending their margins very adroitly.

The apparent lack of movement at an index level masked a significant rotation in sector terms. At the start of the year there were grave concerns about Chinese growth, and commodities prices had fallen sharply. In February these turned around, and we saw a reversal in the commodities and energy space which meant that these sectors, which had been serial underperformers, recovered sharply. Equally, at the start of the year a large proportion of the Eurozone bond market was trading with a negative yield, and in July, in the aftermath of the UK result, with bonds viewed as a defensive asset, yields hit fresh lows. This proved, though, to be a turning point, and yields subsequently rose across the country spectrum. In stock market terms this meant that bond proxies in sectors such as Pharmaceuticals and Consumer Staples, started to underperform, whereas more cyclical areas, including Financials, which are deemed to benefit from the recovery in growth and inflation implied in bond yields rising, did rather better.

Income investing continued to outperform as a style, which helped the Income share class. In the Growth share class we became a great deal less defensive, and we also benefited from our holdings in higher quality banks.

Outlook

From a European point of view the political headwinds include the forthcoming constitutional referendum in Italy, and general elections in the Netherlands (April), France (May) and Germany (September). It would be easy to draw a straight line through what looked like populist victories in the UK referendum and in the US Presidential election and decide that anti-Euro parties will win the day. The fact is, though, that the Italian referendum is very tight, with a high proportion of undecided voters, the Dutch election is neck and neck, but even if the Freedom party win they are very unlikely to attract enough support to form a government. The French election will take place in two rounds, and the pattern in recent polls has been that even if the National Front win through to the second round they are then defeated by a coalition of centrists.

All the time the recovery remains on track. The ECB is likely to wind down its programme of QE only gradually, since it does not wish to cause a dislocation in markets. If nominal GDP continues to improve we should see operating leverage kicking in at companies to boost profits. Equity valuation is undemanding, especially relative to cash, fixed income, and after adjusting for the cycle. European market shares in exports to the emerging countries remain excellent, and emerging markets now seem to be turning the corner after the economic problems they have faced in the wake of commodity price collapses. If politics does not upset the apple cart we see further gains in prospect for both share classes.

Stephen Macklow-Smith

Alexander Fitzalan Howard

Michael Barakos

Tom Buckingham

Investment Managers

24th November 2016

Interim Management Report

The Company is required to make the following disclosures in its half year report:

Principal Risks and Uncertainties

The principal risks and uncertainties faced by the Company fall into the following broad categories: investment and strategy; accounting, legal and regulatory; corporate governance and shareholder relations; operational; and financial. Information on each of these areas is given in the Business Review within the Annual Report and Accounts for the year ended 31st March 2016.

Related Parties Transactions

During the first six months of the current financial year, no transactions with related parties have taken place which have materially affected the financial position or the performance of the Company.

Going Concern

The Directors believe, having considered the Company's investment objectives, risk management policies, capital management policies and procedures, nature of the portfolio and expenditure projections, that the Company has adequate resources, an appropriate financial structure and suitable management arrangements in place to continue in operational existence for the foreseeable future and, more specifically, that there are no material uncertainties relating to the Company that would prevent its ability to continue in such operation existence for at least twelve months from the date of the approval of this half yearly financial report. For these reasons, they consider there is reasonable evidence to continue to adopt the going concern basis in preparing the accounts.

Directors' Responsibilities

The Board of Directors confirms that, to the best of its knowledge:

(i) the condensed set of financial statements contained within the half yearly financial report has been prepared in accordance with FRS 104 'Interim Financial Reporting' and gives a true and fair view of the state of affairs of the Company and of the assets, liabilities, financial position and net return of the Company, as at 30th September 2016, as required by the UK Listing Authority Disclosure and Transparency Rules 4.2.4R; and

(ii) the interim management report includes a fair review of the information required by 4.2.7R and 4.2.8R of the UK Listing Authority Disclosure and Transparency Rules.

In order to provide these confirmations, and in preparing these financial statements, the Directors are required to:

• select suitable accounting policies and then apply them consistently;

• make judgements and accounting estimates that are reasonable and prudent;

• state whether applicable UK Accounting Standards have been followed, subject to any material departures disclosed and explained in the financial statements; and

• prepare the financial statements on the going concern basis unless it is inappropriate to presume that the Company will continue in business;

and the Directors confirm that they have done so.

For and on behalf of the Board

Andrew Adcock

Chairman

24th November 2016

statement of comprehensive income

For the six months ended 30th September 2016

All revenue and capital items in the above statement derive from continuing operations. No operations were acquired or discontinued in the period.

The 'Total' column of this statement is the profit and loss account of the Company and the 'Revenue' and 'Capital' columns represent supplementary information prepared under guidance issued by the Association of Investment Companies.

The return per share represents the profit/(loss) per share for the period and also the total comprehensive income per share.

Statement of ChangeS in Equity

For the six months ended 30th September 2016

1 These reserves form the distributable reserves of the Company and may be used to fund distribution of profits to investors via dividend payments.

Statement of Financial Position

At 30th September 2016

1 This line item combines the two lines of 'Cash equivalents (including liquidity funds) at fair value through profit or loss' and 'Cash and short term deposits' in the financial statements for the period ended 30th September 2015 into one. Under FRS 102, liquidity funds are considered cash equivalents as they are held for cash management purposes.

Company registration number: 237958

Statement of Cash flows

For the six months ended 30th September 2016

Notes to the financial statements 

For the six months ended 30th September 2016

1. Financial statements

The information contained within the financial statements in this half year report has not been audited or reviewed by the Company's auditors.

The figures and financial information for the year ended 31st March 2016 are extracted from the latest published financial statements of the Company and do not constitute statutory accounts for that year. Those financial statements have been delivered to the Registrar of Companies and included the report of the auditors which was unqualified and did not contain a statement under either section 498(2) or 498(3) of the Companies Act 2006.

2. Accounting policies

The financial statements are prepared in accordance with the Companies Act 2006, United Kingdom Generally Accepted Accounting Practice ('UK GAAP'), including FRS 102 'The Financial Reporting Standard applicable in the UK and Republic of Ireland' and the Statement of Recommended Practice 'Financial Statements of Investment Trust Companies and Venture Capital Trusts' (the 'SORP') issued by the Association of Investment Companies in November 2014.

FRS 104, 'Interim Financial Reporting', issued by the Financial Reporting Council ('FRC') in March 2015 has been applied in preparing this condensed set of financial statements for the six months ended 30th September 2016.

All of the Company's operations are of a continuing nature.

The accounting policies applied to this condensed set of financial statements are consistent with those applied in the financial statements for the year ended 31st March 2016.

3. Dividends1

1 All dividends paid and declared in the period have been funded from the Revenue Reserve.

4. Return/(loss) per share

5. Net asset value per share

Neither the contents of the Company's website nor the contents of any website accessible from hyperlinks on the Company's website (or any other website) is incorporated into, or forms part of, this announcement.

24 November 2016

For further information, please contact:

Paul Winship

For and on behalf of

JPMorgan Funds Limited, Secretary

020 7742 4000

JPMORGAN FUNDS LIMITED

ENDS

A copy of the half year has been submitted to the National Storage Mechanism and will shortly be available for inspection at www.morningstar.co.uk/uk/NSM

The half year will also shortly be available on the Company's website at www.jpmeuropean.co.uk where up to date information on the Company, including daily NAV and share prices, factsheets and portfolio information can also be found.