Half-Year Results

LONDON STOCK EXCHANGE ANNOUNCEMENT

JPMORGAN BRAZIL INVESTMENT TRUST PLC

UNAUDITED HALF YEAR RESULTS FOR THE SIX MONTHS ENDED31ST OCTOBER 2019

Legal Entity Identifier: 5493002T5BE3YCTKTE20

Information disclosed in accordance with DTR 4.2.2

CHAIRMAN'S STATEMENT

Introduction and Performance

While the global economic climate deteriorated further during the first six months of this financial year amid ongoing geopolitical and macro economic concerns, returns from global equity markets, and in particular Brazilian equities were strong. The Company recorded a total return on net assets for the reporting period of +12.0%, compared with the benchmark, the MSCI 10/40 Index (in sterling terms) which recorded a return of +11.8% for the same period. The share price return to Ordinary shareholders was +11.3%, reflecting the slight widening of the share price discount to net asset value. At 31st October 2019, the share price was trading at a discount of 18.3%, compared to 17.7% as at 30th April 2019.

The outperformance was mainly attributable to asset allocation, most significantly in the financials and healthcare sectors.

The Investment Managers' Report gives a more detailed commentary about the markets and conditions experienced during this period and the outlook for the remainder of the financial year.

Share repurchases

During the six months to 31st October 2019, the Company did not repurchase any shares. The Board will continue to monitor the absolute level of discount at which the share price trades relative to NAV and the volatility of the discount. Since 1st May 2019, the share price discount to NAV to date has ranged between 12.0% and 24.8%, averaging 18.4%.

Continuation vote

As reported in my statement in the last Annual Report and following the successful passing of the continuation resolution at the Annual General Meeting ('AGM') in September this year, the Board will voluntarily propose another continuation vote to shareholders no later than the next AGM in September 2020, at which point shareholders will have the opportunity to consider the future of the Company in the light of circumstances at that time.

Outlook

Following the successful votes in Congress in relation to pension reform, there are signs that the momentum exists to move on to other aspects of the reforms that are necessary if Brazil is to return to a healthier rate of economic growth. There remain significant risks - political, with President Bolsonaro's decision to set up a new political party and the influence that former President Lula may have following his release from prison pending his appeal against conviction on corruption charges; and economic, with the threat of trade wars, the weakness of the Brazilian currency and the threat to ratification of the EU-Mercosul agreement as a result of climate change issues. But the outlook for corporate earnings is good and the investment managers will continue to seek high quality, reasonably priced companies with good growth prospects for investment in the Company's portfolio.

Howard Myles

Chairman 11th December 2019

INVESTMENT MANAGERS' REPORT

Market background

Despite the negative news during the period, including on tariffs, global stock market returns exceeded expectations, with Brazilian equities outshining most other markets. A policy about-turn by central banks lies behind markets' progress. The US Federal Reserve and the world's other central banks had been expected to raise interest rates this year, thereby tightening liquidity and normalising monetary policy. However, taking note of the perilous global economic outlook, the Fed held fire and went on to cut rates three times in 2019, with other global policy makers following suit. In Brazil, the Banco Central's rate-setting committee reduced rates to an all-time low of 5%, with expectations that they could fall further to 4.5%. This, coupled with low inflation and a more stable political backdrop, set a cautiously optimistic tone for Latin America's largest economy.

Domestically, public support of the Brazilian government boosted markets. We are now nearly one year into the Jair Bolsonaro presidential era, following the Social Liberal Party's victory in the elections of October 2018. The emphatic election result set an optimistic tone that a Bolsonaro government would be able to deliver on its commitment towards fiscal and structural reform, so pivotal to Brazil's future economic growth trajectory. Although an initial market rally was short-lived, Brazilian markets have maintained their upward momentum during the Company's review period. Brazil's economic situation remains tepid, but market sentiment has been boosted by the passing of long-awaited pension reforms that had undergone a torturous journey of political deadlock and delay going back many years, together with signs of progress being made on social security and taxation reforms.

Portfolio review and spotlight on stocks

Despite the testing global and domestic economic backdrop, this has been a period of strong performance for the Company with its net asset value rising by 12.0% over the six months to 31st October 2019, ahead of the benchmark index, the MSCI Brazil 10/40 which rose by 11.8%. Our portfolio exposure remains tilted in favour of domestic themes and those stocks poised to benefit from strong domestic growth as and when this potential is realised. Even though we look beyond short-term results and our strategy is very much based on a long-term view, we are pleased that performance appears to have 'turned a corner' over the review period, delivering both absolute and relative returns.

By sector, Financials remains the Company's largest by some distance and our overweight position relative to the benchmark index contributed to performance overall, albeit with exceptions. Our investments in IRB Brasil RE (Latin America's largest reinsurance company) and in SulAmérica, (Brazil's second largest insurance company) were particularly positive.

Our longstanding underweight exposure to Materials benefitted relative performance whilst investments in Healthcare (primarily Hapvida) and Information Technology (primarily PagSeguro Digital) were helpful. In contrast, our investments in the Consumer Discretionary and Consumer Staples sectors detracted overall.

Hapvida is one of Brazil's largest health operators. In May 2019, it announced the acquisition of Grupo Sao Francisco (SF), marking the company's expansion into Brazil's South East and Central West regions. Hapvida announced strong quarterly results to the end of June, with net revenue, net income and plan participant numbers all up sharply. PagSeguro Digital (PSD) provides payment processing hardware, software and business services and delivered impressive sales and earnings results. Early in 2019 the company announced that it had secured a banking license, enabling it to offer a range of new financial services products to previously untapped segments of the population.

Raia Drogasil (RD) is one of the Company's long-standing investments. It is the largest and fastest growing pharmacy operator in Brazil, with more than 1,900 stores across 22 states. RD's share price performed strongly, as it demonstrated a productivity edge over its peers. B3 is one of the world's largest financial market infrastructure companies. It is our largest holding and one that we rate extremely highly from a strategic perspective. Our underweight position in Vale, the world's largest iron ore producer, was beneficial over the period. The stock was weakened by lower iron ore prices as global demand softened, not helped by the trade dispute between the US and China.

However, in what was a pleasing period overall for the Company, there were some performance detractors. One of these was our overweight position in BK Brasil, the master franchisee of Burger King. The stock's share price fell in the face of increasing competition from its main competitor - Arcos Dorado (and consequently falling prices) in its market segment.

Banco Bradesco also disappointed. Although results were broadly in-line with market expectations, the bank's costs were higher than expected and targets were missed.

In regard to key portfolio shifts, these were largely stocks that we chose to rotate following positive market performance or where our expectation for future returns shifted. Banco Bradesco fell into the latter category and we trimmed our exposure. We added marginally to our holding in reinsurance firm IRB by participating in its share offering, at a discount to the market price.

Moving to Consumer stocks, we added to Latin America's largest brewing company Ambev on the back of positive trends and an encouraging meeting with management.

We exited automobile components manufacturer Iochpe-Maxion, reinvesting the proceeds in Randon, a trailer and auto parts manufacturer.

We invested in Magazine Luíza, one of Brazil's largest retailers and fast becoming one of its leading e-commerce providers.

We invested in BTG Pactual, a financial services company with a dominant franchise across Latin America. We have also added to our holdings in the Real Estate sector in recent months with a position in EzTec, although our exposure remains underweight relative to the benchmark.

Outlook: positive signs but still room for caution

Although our future expectations have improved, business sentiment remains fragile and we think it will take some time for the dust to settle. The most important risks in the short term remain slowing global growth, trade tensions and a stubbornly strong US dollar. Investors will need to remain patient until the global economic tide turns.

For many months, all eyes had been fixed on Brazil's pension reform bill. Its recent passing is a significant victory for the Bolsonaro administration and testament to a government committed to transforming the Brazilian economy through both macro and micro-economic reforms. The social security reform was finally approved in Congress after eight months of discussion. Now, expectations are building on the delivery of a set of government-led measures to contain spending as well as budget planning, administrative reforms and privatisations. Tax reform is also on the agenda; however, we are not too optimistic of achieving a very comprehensive reform due to the complexity of the debate. We are likely to see layers of tax reform achieved, but not an overhaul of the system.

Brazil's Central Bank has forecast economic growth of just 0.9% for 2019, adding that the outlook is subject to a 'high degree of uncertainty'. Nevertheless, at the operational level, Earnings Per Share (EPS) statistics have delivered growth this year and this should continue next year in double digits. Brazil has been one of the few emerging markets to deliver positive earnings figures and in the current environment where earnings are challenged, we will continue looking for stocks where we see the potential for earnings growth recovery.

There are positives: data on the Brazilian economy continues to show signs of recovery, albeit slowly. GDP growth in the third quarter of 2019 and Industrial Production figures in November have surpassed expectations. The economic slack in the economy and low inflation have allowed the Banco Central to cut interest rates and signal that more cuts will follow. Privatisations are planned for several state-owned entities and the Bolsonaro government's more pro-business stance should fuel growth. Unemployment has nudged downwards in recent months, having risen in the first quarter of 2019.

Our portfolio is positioned for a recovery in the domestic economy, with the positive momentum of the reformist agenda fueling confidence in both consumer demand and levels of investment. Although valuations have increased over the review period, the lower rate environment justifies a premium valuation for stocks that show stable growth, and we still believe that our investment process can uncover fundamentally sound businesses with good long-term prospects to deliver solid shareholder returns. We are pleased that our strategy has been successful over the current reporting period and we will continue to view sentiment shifts and market setbacks as opportunities to buy into new stocks or to add to existing high-conviction holdings. We will adhere to this approach whilst maintaining a balanced risk profile.

Luis Carrillo

Sophie Bosch De Hood

Investment Managers 11th December 2019

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 have not changed and fall into the following broad categories: investment and strategy; market; accounting, legal and regulatory; corporate governance and shareholder relations; operational and financial. Information on each of these areas is given in the Directors' Report within the Annual Report and Accounts for the year ended 30th April 2019.

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. More specifically, the Directors believe that there are no material uncertainties pertaining 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, subject to the outcome of the continuation vote to be proposed no later than September 2020. 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 31st October 2019, 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

Howard Myles

Chairman 11th December 2019

STATEMENT OF COMPREHENSIVE INCOME

FOR THE SIX MONTHS ENDED 31ST OCTOBER 2019

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 net return/(loss) on ordinary activities after taxation represents the profit/(loss) for the period/year and also total comprehensive income.

STATEMENT OF CHANGES IN EQUITY

FOR THE SIX MONTHS ENDED 31ST OCTOBER 2019

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

STATEMENT OF FINANCIAL POSITION AT 31ST OCTOBER 2019

STATEMENT OF CASH FLOWS

FOR THE SIX MONTHS ENDED 31ST OCTOBER 2019

NOTES TO THE FINANCIAL STATEMENTSFOR THE SIX MONTHS ENDED 31ST OCTOBER 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 30th April 2019 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 including 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 have been prepared in accordance with the Companies Act 2006, FRS 102 'The Financial Reporting Standard applicable in the UK and Republic of Ireland' of the United Kingdom Generally Accepted Accounting Practice ('UK GAAP') and with the Statement of Recommended Practice 'Financial Statements of Investment Trust Companies and Venture Capital Trusts' (the revised 'SORP') issued by the Association of Investment Companies in November 2014 and updated in October 2019.

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 31st October 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 30th April 2019.

3. Return/(loss) per share

4. Dividends paid

All dividends paid in the period/year have been funded from the Revenue Reserve

5. Net asset value per share

JPMORGAN FUNDS LIMITED

11th December 2019

For further information, please contact:

Divya Amin

For and on behalf of

JPMorgan Funds Limited, Secretary

020 7742 4000

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 (UK) LIMITED

ENDS

A copy of the half year will be 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.jpmbrazil.co.uk where up to date information on the Company, including daily NAV and share prices, factsheets and portfolio information can also be found.