Half-year Report

LONDON STOCK EXCHANGE ANNOUNCEMENT

JPMORGAN ELECT PLC

UNAUDITED HALF YEAR RESULTS FOR THE SIX MONTHS

ENDED 28th FEBRUARY 2019

Legal Entity Identifier: 549300FIUYKKL39ILD07

Information disclosed in accordance with DTR 4.2.2

Chairman's Statement

Dear Shareholders,

I am pleased to report on the results for the half-year ended 28th February 2019. Although it was a challenging time for global markets, it was still disappointing that both the Managed Growth and Managed Income share classes underperformed their respective benchmarks.

In February this year, you voted on two proposals, the first being a change in the investment objective and policy of the Managed Cash share class. You will recall that this was required to take the assets attributable to the Managed Cash shares outside the scope of the new European Money Market Funds Regulation, which allowed you to continue to have access to a lower risk share class. In line with the new investment objective, the Managed Cash share class pool is now invested in the JPMorgan Funds - Sterling Managed Reserves Fund.

At the same time, we obtained your consent and approval for the issue of new shares on a non-pre-emptive basis (the 'New JPM Elect Shares') in connection with the proposed scheme of reconstruction of El Oro Ltd ('El Oro') (the 'Scheme'). It is anticipated that a circular to El Oro shareholders in connection with the Scheme (the 'Circular') will be published in May, with the necessary approvals from El Oro shareholders sought at a general meeting in June 2019, having allowed sufficient time for the majority of El Oro's assets to be realised. It remains the Company's intention to publish a prospectus in connection with the issuance of the new JPM Elect Shares pursuant to the Scheme around the date of publication of the Circular.

Managed Growth

The objective of the Managed Growth share class is long-term capital growth. In the period, the portfolio has delivered a total return on net assets of -7.5%, compared with the portfolio's benchmark which returned -4.6%. The share price total return was -7.9%. The long-term performance of the Managed Growth share class continues to be strong, with outperformance against the benchmark index over 10 years of 1.4% per annum. An analysis of performance is set out in the Investment Managers' Report on pages 14 to 19 of the Half Year Report.

For the half year ended 28th February 2019 the Board declared dividends of 7.56p per Managed Growth share compared to 5.70p for the half year ended 28th February 2018. Since this share class is a growth vehicle any income generated during the period is generally distributed in that period and investment decisions are not made with the objective of maintaining or growing income.

Managed Income

The Managed Income portfolio has delivered a total return on net assets of -5.0%, below the portfolio's benchmark which returned -3.7%. The share price total return was -5.2%. An analysis of performance is set out in the Investment Managers' Report on pages 20 to 26.

The objective of the portfolio is to deliver a growing income return with the potential for long-term capital growth. In the absence of unforeseen circumstances, the Board intends to declare the first three interim dividends for the year ending 31st August 2019 at 1.10p per share compared to 1.05p for the half year ended 28th February 2018. The level of the fourth interim dividend will be determined by the Board towards the end of the Company's 2018/19 financial year and will depend on the level of dividends received and anticipated by the Company. It is the Board's aim to pay not less than the dividend paid for the year ending 31st August 2018 (4.50p) and increase the total dividends each year by at least inflation.

As expected, for the half year ended 28th February 2019 the Board declared dividends of 2.20p per Managed Income share compared to 2.10p for the half year ended 28th February 2018.

The Board is pleased that the Managed Income share class has continued to deliver growing dividends, providing a yield consistently in excess of 4%. The Introduction of gearing and change to the benchmark index have brought the share class into line with the majority of investment trusts in the AIC UK Equity Income Sector. However continued underperformance in relation to its benchmark remains a cause for concern.

Managed Cash

The Managed Cash portfolio delivered a total return on net assets of +0.5%. The share price was unchanged.

As mentioned above, the investment objective and policy for Managed Cash changed in February 2019. The portfolio's objective and policy is now to achieve a return in excess of sterling money markets by investing primarily in GBP denominated short-term debt securities through investment in JPMorgan Funds - Sterling Managed Reserves Fund (JSMRF). The investment policy of JSMRF is to invest primarily in GBP denominated short-term debt securities.

The Board considers this class to be an asset allocation tool which continues to benefit shareholders of the Company's other share classes, offering the opportunity to switch into a lower risk share class in times of market volatility.

Board Appointment

We said goodbye to Roger Yates at the AGM in December 2018 following nine years on the Board. We thank Roger for his significant contribution to the Company and wish him well. At the same AGM, we welcomed Rupert Dickinson to the Board. Rupert is new to Investment Trust boards, having recently retired from his executive role at Barclays. He has extensive experience of financial services and in the development of the UK investment platform industry and I have no doubt that he will be an excellent addition to the Board.

Outlook

Equity markets fell during the half-year period although the very sharp declines at the end of last year were partly offset by a strong start to 2019. Returns from cash and bonds also remained low, against the backdrop of slower than expected rate rises. Our Managers expect to see continuing volatility but believe that equities are still relatively attractive compared with cash and bonds and will provide a good source of income.

Alan Hodson

Chairman

30th April 2019

INVESTMENT MANAGERS' REPORT - MANAGED GROWTH

Performance Review

The Managed Growth portfolio underperformed its benchmark over the period, returning -7.5% versus the benchmark return of -4.6%. The return to shareholders was -7.9%.

During the six month period the portfolio underperformed its benchmark in what was a challenging period for markets with investor concerns including trade tensions, concerns over global growth and uncertainty around the direction of interest rates in the US. Within the portfolio, the UK was the worst performing region, followed closely by the US. Most of the damage occurred during the last quarter of 2018, with equity markets suffering their worst quarterly performance since the euro area crisis in 2011. This performance was tracked by the Company's holdings, with the majority underperforming relative to their respective benchmark.

Performance has picked up in 2019 as investor sentiment has been buoyed by the resolution of the US government shutdown, conciliatory rhetoric on trade tariffs and the continued reluctance of global central banks to raise interest rates.

We made no meaningful change to the asset allocation over the first half of the financial year, with the portfolio underweight to the UK and Europe for the entire period. During the period, we went further underweight with respect to these regions, most noticeably in November, due to a combination of unfavourable earnings revisions, political uncertainty and negative market sentiment. We reduced our underweight position in the UK more recently as our overall view improved; however, we still see significant headwinds from both political uncertainty and the resultant impact on Sterling and therefore remain underweight. Elsewhere, we have had an overweight position to North America for the entire period and it remains our preferred region.

At the end of February the investment trust sector-average discount had tightened to 3.9%, compared with 4.5% at the end of August last year (excluding private equity, hedge funds and direct property funds) (Source: Winterflood). Looking at the Managed Growth portfolio we estimate that discount narrowing contributed approximately 0.7% to the portfolio return.

Outlook

From a macroeconomic perspective, we believe that the probability of a recession in the next 12 months remains low. The recent change in policy from the US Federal Reserve, indicating that it would pause its rate rises for the foreseeable future, should be a boost to global growth and likely extends the eventual length of the business cycle by a couple of quarters. However, recent measures of economic activity and global business surveys have moderated, which warrants caution. Whilst the outlook for equities has improved compared to the last quarter of 2018, any extended move higher from this point would need to rely largely on earnings exceeding market expectations.

INVESTMENT MANAGERS' REPORT - managed income

Dividend Review

During 2018 the UK stock market registered dividend growth of 5.1%, down on the 10.5% growth delivered in 2017. The dividends in 2017 had been significantly enhanced by the fall in sterling compared to 2016 levels whereas the effect of the exchange rate on dividends in 2018 was modestly negative. We forecast growth of 5.3% for 2019. The mining sector saw the biggest growth in dividends in 2018 whilst the resumption of dividends by RBS and Standard Chartered meant banks were also meaningful contributors. By way of contrast, dividend pay-outs from retailers and utilities were lower.

Several of the largest dividend payments in the FTSE All Share Index (the 'Index') are reported in dollars with the result that movements in the sterling/US dollar exchange rate can have a significant impact on the income received by the Company. We take the exchange rate volatility seen since the 2016 referendum into account when assessing investment opportunities, to seek to ensure that the Company's dividend is resilient to these movements. A rise in the value of sterling would reduce the value of dollar based dividends, and vice versa.

We continue to find the dividend yields of UK residential housebuilders such as Taylor Wimpey and Persimmon attractive. The pay outs from these companies are backed by strong balance sheets and high cash flow generation. In addition, we expect our holdings in mining companies to enhance income generation for the portfolio; these companies are benefiting from a rally in the prices of certain commodities, most notably iron ore, and have a renewed focus on returning excess cash to shareholders. The prospect for special dividends from both sectors looks promising thanks to growing profits.

Performance Review

During the half year ended 28th February 2019, the Managed Income portfolio delivered a total return of -5.0%, in comparison to the benchmark's return of -3.7%.

Rio Tinto was one of the best performing stocks in the portfolio in the first half of the financial year. It has benefited from the increase in iron ore prices following the fall in iron ore supply as a result of the tragic accident at Brumadinho dam in Brazil.

Despite fears that uncertainty about the outcome of 'Brexit' negotiations would dampen demand for new homes Taylor Wimpey, the UK residential housing developer, continues to trade strongly and the prospect for continued dividend returns is sound.

Home furnishings retailer, Dunelm Group, performed very strongly. The company reported an increase in sales and profits benefited from greater focus on key product categories, with Christmas sales beating expectations.

However, performance relative to the benchmark was negatively affected by Electrocomponents, Mondi and ITV. We sold Electrocomponents and ITV as we believe that the near term prospects for those companies respectively are declining. On the other hand we have retained Mondi as the company's balance sheet strength gives us confidence the dividend will grow.

Portfolio Review

During the period under review we continued to make use of the Company's borrowing facility. As at 28th February 2019, the equity exposure of the Managed Income portfolio was 104% with the level of gearing primarily influenced by individual stock opportunities.

We assess individual investment opportunities on whether earnings estimates are being revised up, whether the valuation is attractive and whether the balance sheet and forecast cash flows allow for dividend growth. As such, portfolio construction is determined by bottom up stock selection with a focus on potential and sustainable dividend growth.

The largest sector exposure in the portfolio is Financials. Our holdings in life assurance and general insurance companies account for much of this. These companies have the capital strength to offer some of the most attractive dividend yields in the market. For instance Direct Line announced a higher than expected special dividend with its full year results taking its total yield to more than 8%. The Consumer Goods sector includes the portfolio's holdings in house builders such as Persimmon and Taylor Wimpey. They offer dividend yields of 10% and 9% respectively. Yields as high as this usually signal that the market believes a dividend cut is likely. However, these companies generate large amounts of cash and have significant amounts of cash on their balance sheets. Commodities is also a large sector position and has increased in the period under review. For example, we bought BHP Group as rising earnings and cash flows support an 8% dividend yield.

During the six month period, new positions included BT Group, Charter Court Financial Services and Greene King.

We bought telecoms operator, BT Group, as the company's financial results over the course of the year showed a marked improvement. In addition, the UK government set out greater regulatory clarity with regard to future telecom infrastructure policy. At the time of purchase the dividend yield was 6%.

Charter Court Financial Services is a challenger bank specialising in professional buy to let mortgages. We bought the stock following a strong trading update in which it was reported that lending volumes were ahead of prior company forecasts. The stock had an attractive dividend yield of 4.7% and the dividend is forecast to grow by 14% in 2020.

We bought Greene King, the pubs and brewing company, as sales in its pubs improved over Christmas following several years of decline, leading to higher forecasts for future profitability. The company generates high levels of cash flow which supports a dividend yield of 5%.

The purchases made during the period were funded by the sale of the JPMorgan Global High Yield Bond Fund and JPMorgan European Investment and our holdings in Centrica, Pearson and ITV. Despite earlier expectations we became less optimistic over the prospect for better financial performance at Centrica. Weather patterns and customer losses were unhelpful for its residential gas supply business which raised concerns about their ability to maintain the dividend. We sold Pearson when it reported a slowdown in growth in its US educational materials business.

Outlook

More recently there are signs that growth is stabilizing in China and the US and growth in the UK is holding up with jobs and incomes data confounding expectations of weakness due to the uncertainty of the outcome of the 'Brexit' negotiations. With many outstanding macro and geopolitical issues markets are likely to be volatile in the short-term but on a medium-term view we believe that the risk/reward in UK equities for investors is attractive.

We will continue to add those stocks where earnings, valuations and dividend yields are attractive. Gearing remains at relatively low levels which will allow us to selectively take advantage of market-related falls in our favoured companies and new investment opportunities.

We have confidence that the companies that we have invested in will be able to sustain and mostly grow their dividends even if we enter a renewed period of slower economic growth. Furthermore we believe that the Trust's revenue reserves provide shareholders with an adequate income cushion even in a recessionary environment.

John BakerKaten Patel

Investment Managers

30th April 2019

INVESTMENT MANAGERS' REPORT - Managed cash

During the first half of the financial year, the Bank of England's (BoE) Monetary Policy Committee kept interest rates at 0.75%. On the Bank's latest forecasts for growth, real GDP growth for 2019 and 2020 were downgraded to 1.2% year on year and 1.5% year on year, respectively. Governor Mark Carney cited slower estimates for global growth, and an assumption of a longer period of Brexit-related uncertainty than it had previously anticipated, as the primary drivers of the changes.

The Managed Cash portfolio returned 0.5% on net assets for the period. For much of the period the Company retained its broad diversification across a range of the UK's leading AAA-rated sterling liquidity funds. During February, the portfolio's assets were reinvested into the JPMorgan Funds - Sterling Managed Reserves Fund following shareholder approval of the change in investment policy to take the Company outside the scope of the new European Money Market Funds Regulation. The investment objective of the Managed Cash portfolio is now to achieve a return in excess of sterling money markets by investing primarily in GBP denominated short-term debt securities.

For now, Brexit uncertainty continues to constrain the BoE from significantly altering its direction of monetary policy. We suspect that if Brexit uncertainty is at least partially resolved, and a risk of no-deal is taken off the table, then the Bank would like to see rates higher than their current low levels. This point is reiterated by the BoE's latest forecast, which still sees inflation above its 2% target in the medium term.

Katy Thorneycroft

Investment Manager

30th April 2019

Interim Management Report

The Company is required to make the following disclosures in its half-yearly financial report.

Principal Risks and Uncertainties

The principal risks and uncertainties faced by the Company fall into the following broad categories: investment strategy; market; accounting, legal and regulatory; corporate governance and shareholder relations; operational, cybercrime and financial. Information on each of these areas is given in the Business Review within the 2018 Annual Report and Accounts.

Related Party Transactions

During the half year to 28th February 2019, no new agreements were entered into with related parties 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 pertaining to the Company that would prevent its ability to continue in such operational existence for at least 12 months from the date of the approval of this half-yearly financial report. For these reasons, they consider there is reasonable evidence to adopt the going concern basis in preparing the financial statements.

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 28th February 2019, as required by the UK Listing Authority Disclosure Guidance and Transparency Rules 4.2.4R; and

(ii) the interim Management report includes a fair review of the information required by 4.2.7R (important events that have occurred since inception, their impact on these financial statements and a description of the principal risks facing the Company) and 4.2.8R (related party transactions since inception that have materially affected the financial position or performance of the Company) of the UK Listing Authority Disclosure Guidance 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 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

Alan HodsonChairman

30th April 2019

statement of comprehensive income

for the six months ended 28th February 2019

statement of changes in equity

for the six months ended 28th February 2019

1 This reserve forms the distributable reserve of the Company and may be used to fund distributions to investors via dividend payments.

statement of financial position

at 28th February 2019

statement of cash flows

for the six months ended 28th February 2019

Notes to the financial statements

for the six months ended 28th February 2019

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 August 2018 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 includes 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 and updated in February 2018.

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 28th February 2019.

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 August 2018.

3. Return/(loss) per share

4. Dividends

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

2 In accordance with the accounting policy of the Company, these dividends will be reflected in the financial statements of the following period.

5. Net asset value per share

The net asset values per share are calculated as follows:

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

JPMORGAN FUNDS LIMITED

ENDS

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

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