High-yielding stocks and big ideas in our income portfolio

James Cook, portfolio manager on JPMorgan Global Growth & Income Ord (LSE:JGGI), explains what sets the investment trust apart from the competition, recent buys, the AI trade and US exposure, plus two ideas he’s excited about.

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Dave Baxter, senior fund content specialist at interactive investor: Hello and a very warm welcome back to our Insider Interviews series. I’m Dave Baxter here at ii, and today I’m joined by James Cook, portfolio manager on the JPMorgan Global Growth and Income Investment Trust. James, thanks for joining today. 

James Cook, portfolio manager on JPMorgan Global Growth and Income: Thank you very much for having us. 

Dave Baxter: So, let’s start with the fund. How does it differ from the competition and the underlying markets? 

James Cook: Yeah, so just to give an introduction to JGGI. We’re looking for the best 50 or so ideas across our research platform where we cover 2,500 companies. So, just putting that into context for a second, less than 3% of the companies we look at make the final portfolio. 

I would argue that this is one of the highest-conviction equity strategies within the market, for sure within JPMorgan walls. I’m not suggesting that it’s the most concentrated strategy. You do have the 20 to 30 stock portfolios out there, but in terms of that hurdle rate, in terms ofthe 3% number, that is an incredibly high hurdle rate.

Outside of that, the stock picking is built on the success of the analysts. We have 80 analysts worldwide. Each of those analysts typically has a junior analyst beneath them. They have an average industry experience of over 20 years and that is a real competitive advantage. 

And then, finally, maybe on the investment trust level, we have an enhanced dividend payout policy. So, we pay 4% of the net asset value in four equal quarterly instalments. So, think of that as 1% dividend yield per quarter. And again, super attractive to our underlying shareholders. 

Dave Baxter: What portfolio activity have we seen in the last year or so? 

James Cook: Yeah, over the past year, we’ve remained balanced. So, we’ve been balanced for the best course of a year between cyclicals, defensives, high growth and low growth, which is typically where value sits. 

It’s been much more about the stock picking than timing factors or any parts of the market per se. With that said, at the margin, we have lent a little bit into industrial cyclicals. So, we started to see the AI capex spill over into other sectors, predominantly into industrial cyclicals. So we saw that great PMI number earlier in 2026, and that’s when we decided to add to our Volvo AB Class B (OMX:VOLV B) position that we already held, and we built a new position in United Rentals Inc (NYSE:URI). So, this is the US’ largest construction equipment player. 

We saw that cyclical upside. We bought the stock around $800. That sort of thesis then unfolded. The stock went up to $1,100 and we exited the position, again, largely based on the valuation discipline of the process. 

Second to that, maybe again at the margin, we looked at corporate governance improvements across Japan. So, we built a position in Tokio Marine. We saw the dividends inflecting positively following earnings growth, and at the same time selling down their cross-share holdings into higher ROE [return on equity] accretive acquisitions, which again, we thought that’s a net positive. We bought the stock again earlier this year, and the stock’s been up around 35%. So, those two trades have really worked out for us. 

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Dave Baxter: And is there anything you’ve exited, lost conviction in in the last year? 

James Cook: That’s a great question. In terms of conviction, we lost a little bit in The Walt Disney Co (NYSE:DIS). We tried to be momentum aware. So, there are stocks that we really like on a long-term fundamental basis. But if we’re not seeing that thesis unfold, there’s plenty of other opportunities out there for us. 

Dave Baxter: So, your recently published annual report talks quite extensively about AI, about the AI trade broadening out somewhat beyond the Mag 7. How have you been playing the AI theme, and where have you maybe been stepping back a bit? 

James Cook: Yeah, good question. So, in terms of the AI opportunities, we’ve broken it down into two pieces. First, the picks and shovels phase. So, it’s the semiconductors, the industrial capex plays, the power plays, etc. And then we’ll talk about the AI enablers in a second.

Within the picks and shovels, we have a modest overweight here, but it’s really about stock selection. So, we prefer the long duration, high-quality businesses that we don’t think have been overearning. And we think they have a better duration of growth ahead of them. So, NVIDIA Corp (NASDAQ:NVDA), Taiwan Semiconductor Manufacturing Co Ltd ADR (NYSE:TSM), and ASML Holding NV (EURONEXT:ASML) as great examples of that. 

We think, actually, the valuation for the level of growth you’re getting is really attractive at this point. And to fund that, we have underweight positions in the AI bottlenecks. We think a lot of these commoditized parts have been overearning. You look at SanDisk Corp Ordinary Shares (NASDAQ:SNDK) that had a 12% EBIT margin in a good year previously, that’s now jumped all the way up above 60%. We think a lot of that will begin to mean revert when supply comes back. 

The second part as well, that underweight, is to the industrial capex players. So, once you build the data centres, we question what the earnings growth will look like thereafter. So, what service revenues will they be able to achieve? All that’s still relatively unknown relative to the AI semiconductors, where once you built the data centre, you put those AI chips into the stacks.

It’s quite clear to us that you need to continue to upgrade because the efficiency of the latest models continues to get better and better. And so the hyperscalers will need the next generation of chips. So, we see much better duration of growth.

With the hyperscalers as well, we like Microsoft Corp (NASDAQ:MSFT) and we like Amazon.com Inc (NASDAQ:AMZN). The view there is, while the market’s hung up around the capital intensity, we think that that capital intensity is at peak pain point. So, we free cash flow beginning to inflect positively.

The second part is the market’s questioning what the return on that capital looks like. And all the analysis that we do when we look at incremental revenue versus incremental capex suggests that those returns are pretty healthy, and they’re starting to look better as we saw with Microsoft pricing up those AI features in the latest quarterly results. 

So, we actually think that’s a really attractive place to be right now. 

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Dave Baxter: Yeah, well, that is an interesting question mark, isn’t it, about the hyperscalers. You’ve already mentioned them, but what are the key metrics you are monitoring to see whether all that capex is actually going to pay off? 

James Cook: I think there’s short term and there’s long term, and this is where the two questions come up, and this is why we try to be cognisant of those theses unfolding in the short term. 

But on a long-term basis, it always comes down to industry structure. So, how competitive that industry will be depends on how many players there are, how differentiated the products are. And, for us, you have real differentiation and you have an oligopolistic structure behind it as well. That has historically always resulted in good levels of profitability.

So, long term, we’re confident that they will be able to monetize their offering. And short term we’re beginning to see it, as we talked about with regards to Microsoft beginning to price some of their AI features.

Dave Baxter: If we’re trying to look beyond AI, what are the big themes in the portfolio? 

James Cook: Great question. So, we spend so much time talking about AI that we forget there’s a whole world of other great opportunities out there. There’s a lot of high-quality attractively valued businesses. And while we’re not really theme-based at all, it’s much more about the underlying stocks, of two of the new ideas that we added to in 2026, one was Ferrari NV (MTA:RACE).

This stock gives you exposure to the most resilient and fastest-growing consumer, the ultra-high net worth individuals. Now in late 2025, it was trading around 50 times earnings, which we just thought was too expensive for the level of growth that it offered. In early 2026, concerns around the electric vehicle came out, the Luce, and our view was that it was not that significant in terms of units, and Ferrari is one of the best at brand control.

So, we thought that there was a massive overreaction by the market when it started to trade towards 30 times. So, we built a position. Next thing is the Luce ended up selling out. It sold out at a price point above the average selling price of Ferrari’s cars. So, you knew that was margin-accretive, and the stock’s been up around 25%.

The second name that’s always worth mentioning is Ventas Inc (NYSE:VTR). One of the big structural growth drivers outside AI is Baby Boomers hitting 80 years old. Now, that’s when they typically go to assisted living, or what we call in the UK, nursing homes. So, we see demand inflecting positively for assisted living in the US, and at the same time supply remains unbelievably constrained because of the higher construction costs, the tariffs, but also the access to labour has just become more difficult.

So, we see very limited supply growth for the next three years as demand is inflected, and that should be really good for pricing power. 

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Dave Baxter: The fund, like many a global fund, is actually very US-focused. What would it take to change that? 

James Cook: So, we can go anywhere in the world and we will go to any parts of the regions where we find the best stock opportunities. With that said, you’re right, around 70% of the market cap of global equity sits in the United States and some of the best-quality companies you tend to find out there. So, there’s a natural leaning towards the US and our current weight is around 70%, as well. We might fluctuate 5% higher, 5% lower, but typically that’s where we’ve been. 

As of today, we don’t see a substantial valuation opportunity outside of that, that warrants moving a lot of capital into other parts of the world. 

Dave Baxter: You mentioned your enhanced dividend policy. One pro of that is it means you don’t really have to chase yield, but what high-yielding stocks are there in the fund? 

James Cook: Yeah, it’s a really good question because we don’t really classify the world into income versus growth stocks. We really look at them more in the sense of: what’s the total expected return of that stock? And that extra flexibility is what we think is a competitive advantage, because we don’t have to go and chase high yield from certain parts of the market that are typically lower growth and lower quality, we can actually package that yield at an aggregate level by paying out a capital growth. 

In terms of the stocks that do have high yields, obviously that’s normally Europe, because the US is more inclined to give buybacks. So, it’s really coming out of Europe where the high yields will come from. In terms of the names, we’ve got Volvo, where we see that cyclical upside that we’ve already talked about in terms of trucks. But also offering you a 6% pretty stable dividend yield. So, that’s a really attractive entry point into Volvo. 

In other parts of the world, we’ve got Munich Re giving you around a 5% dividend yield. It’s a very stable business, rock-solid balance sheets, the largest reinsurance company in the world. And if interest rates remain elevated, they should benefit from that with higher interest income. 

Dave Baxter: James, thanks for joining today. 

James Cook: Thank you very much. 

Dave Baxter: And thank you for watching as always. I hope you found it useful and enjoyable. As always, do let us know what you think in the comments and if you’re enjoying the series, hit the like button and please hit the subscribe button. Thanks and take care.