JPMorgan Indian

JII is the largest and cheapest trust offering exposure to the growth opportunities in India…

Add to watchlist Request a meeting Download View key data

Disclosure – Non-Independent Marketing Communication

This is a non-independent marketing communication commissioned by JPMorgan Indian. The report has not been prepared in accordance with legal requirements designed to promote the independence of investment research and is not subject to any prohibition on the dealing ahead of the dissemination of investment research.

JPMorgan Indian

JPMorgan Indian (JII) is the largest and longest-standing investment trust specialising in Indian equities. Its portfolio consists of the best ideas of JPM’s Emerging Markets and Asia Pacific (EMAP) equities team in India, chosen via their pan-regional process which seeks to identify high-quality growth companies.

JII has been managed by Rajendra Nair since 2003. He was joined by Ayaz Ebrahim, Co-head of the Asia Pacific Regional Team, in July 2020, following the retirement of Rukhshad Shroff. Following a difficult period of performance, Ayaz has been asked by the board to take a greater role in risk management and portfolio construction. Without changes to the process, the managers have closed some key stock underweights over the past year (see portfolio) and increased exposure to the digital economy.

Analysts on the team aim to identify those companies which can grow their earnings consistently faster than the market. Typically, they are willing to pay an above-market valuation if they believe the company can outperform over the long run. ESG issues figure highly within the risk assessments carried out for each stock, which influences the assessment of value applied.

JII has underperformed over the past five years. Chiefly this has been due to some major stock calls going wrong. The pandemic, in which banks have underperformed, has impaired performance given it is one of the team’s preferred sectors. However, the managers remain focused on identifying the best long-term opportunities rather than chasing short-term performance. Another factor to consider is that the Indian market is highly concentrated, making single stock calls more meaningful to performance.

JII trades on a discount of 12.5%, in line with its five-year average.

Kepler View

India is an exciting place to be investing for the long run. Its young population provides a strong tailwind for economic growth and a large and growing market to sell into. The reform programme, continuing to be undertaken by Prime Minister Modi, also seems to be bearing fruit. Improving the ease of doing business in India will potentially be very significant in encouraging enterprise and foreign investment, while bringing the majority of the population into the formal economy should have all sorts of benefits and provide opportunities for companies to offer them services. We think it is significant that the broader Asia funds run by the EMAP team have been increasing their positions in India in recent months, reflecting their view of valuations and the long-term potential.

JII has had a disappointing few years of performance. However, we note that the performance of JPM’s broader Asian portfolios has been very good over this period. India is a very concentrated market, and a few bad stock calls have had a significant impact on JII’s returns. Hopefully, Ayaz’s arrival will bring greater integration with the EMAP team and better results for shareholders. In the short term, we note the reduction in stock-specific risk should lead to less divergence from the index. JII offers access to the potential in the Indian market on a wide discount and a large and liquid trust with a relatively low OCF.

bull bear
Long-term growth potential in India, boosted by recent business-friendly reforms
Stock-picking has hindered relative returns in recent years
Shares trading on wide discount
Change in management team creates some uncertainty
JII is the cheapest India trust on an OCF basis, and the largest and most liquid
Single country funds bring extra volatility and country-specific political and economic risks
Thomas McMahon
Thomas is a senior investment trust analyst and joined Kepler in April 2018. Previously he was senior analyst at FE Invest, where he was responsible for fund selection for a range of model portfolios. He covered all asset classes over time, but has particular experience with emerging markets and fixed income as well as UK smaller companies funds. He has a degree in Philosophy from Warwick University and is a CFA charterholder.

Fund History

Disclaimer

This report has been issued by Kepler Partners LLP.  The analyst who has prepared this report is aware that Kepler Partners LLP has a relationship with the company covered in this report and/or a conflict of interest which may impair the objectivity of the research.

Past performance is not a reliable indicator of future results. The value of investments can fall as well as rise and you may get back less than you invested when you decide to sell your investments. It is strongly recommended that if you are a private investor independent financial advice should be taken before making any investment or financial decision.

Kepler Partners is not authorised to make recommendations to retail clients. This report has been issued by Kepler Partners LLP, is based on factual information only, is solely for information purposes only and any views contained in it must not be construed as investment or tax advice or a recommendation to buy, sell or take any action in relation to any investment.

The information provided on this website is not intended for distribution to, or use by, any person or entity in any jurisdiction or country where such distribution or use would be contrary to law or regulation or which would subject Kepler Partners LLP to any registration requirement within such jurisdiction or country. In particular, this website is exclusively for non-US Persons. Persons who access this information are required to inform themselves and to comply with any such restrictions.

The information contained in this website is not intended to constitute, and should not be construed as, investment advice. No representation or warranty, express or implied, is given by any person as to the accuracy or completeness of the information and no responsibility or liability is accepted for the accuracy or sufficiency of any of the information, for any errors, omissions or misstatements, negligent or otherwise. Any views and opinions, whilst given in good faith, are subject to change without notice.

This is not an official confirmation of terms and is not a recommendation, offer or solicitation to buy or sell or take any action in relation to any investment mentioned herein. Any prices or quotations contained herein are indicative only.  

Kepler Partners LLP (including its partners, employees and representatives) or a connected person may have positions in or options on the securities detailed in this report, and may buy, sell or offer to purchase or sell such securities from time to time, but will at all times be subject to restrictions imposed by the firm’s internal rules. A copy of the firm’s Conflict of Interest policy is available on request.

PLEASE SEE ALSO OUR TERMS AND CONDITIONS

Kepler Partners LLP is authorised and regulated by the Financial Conduct Authority (FRN 480590), registered in England and Wales at 9/10 Savile Row, London W1S 3PF with registered number OC334771.



Welcome to Kepler Trust Intelligence

Kepler Trust Intelligence is authorised in the UK by the Financial Conduct Authority.
Please enter a valid email address
{{item.msg}}
Please enter a valid password
{{item.msg}}
Please enter a valid email address
{{item.msg}}
Please check your email. If an account exists you'll be sent instructions on how to reset your password.
Kepler Trust Intelligence is authorised in the UK by the Financial Conduct Authority. To ensure that we are able to provide content which is appropriate for you, please tell us a little about yourself.
Please choose an option
{{item.msg}}
Please enter a company name
{{item.msg}}
Please enter a location name
{{item.msg}}
Please choose an option
{{item.msg}}
Please enter a platform
{{item.msg}}
Please choose an option
{{item.msg}}
Please enter a trust
{{item.msg}}
?
The information contained herein is not for distribution and does not constitute an offer to sell or the solicitation of any offer to buy any securities in the United States to or for the benefit of any United States person (being residents of the United States or partnerships or corporations organised under the laws thereof). The investment funds referred to herein have not been registered in the United States under the Investment Company Act of 1940 and units or shares of such funds are not registered in the United States under the Securities Act of 1933.
Please confirm
{{item.msg}}
Please select an option
{{item.msg}}
See benefits
A free Kepler Trust Intelligence account allows you to access premium content including the ‘Kepler View’ – our verdict on the trusts we cover – and historical research so you can see how our view has changed over time. An account also unlocks useful facilities like the ‘follow’ button which lets you keep track of the trusts you’re interested in and as a logged in user you can also download PDFs of our research, and choose the layout of the page you’re reading to suit your preference. We will not share your details unless you give us permission to do so, and we won’t bombard you with emails – we only send one a week.
Please select an option
{{item.msg}}
Please enter your first name
{{item.msg}}
Please enter your last name
{{item.msg}}
Please enter a valid email address
An account already exists with this email - have you forgotten your password?
{{item.msg}}
Please enter a valid password
{{item.msg}}
Please enter a valid password
{{item.msg}}
How will this information be used? Your answers help us to tailor our content to relevant investment trusts, and to ensure that the asset allocation and portfolio strategy research we produce is appropriate to our userbase.
Our Website uses Cookies Cookies are small text files held on your computer. They allow us to give you the best browsing experience possible and mean we can understand how you use our site. Some cookies have already been set. You can delete and block cookies, but parts of our site won’t work without them. By using our website you accept our use of cookies. For further information please refer to the Kepler Privacy Notice.
Need help?

One more thing...

Did you know, you can 'follow' individual trusts on Kepler Trust Intelligence? Use the functions below to set up alerts and we'll send you research and updates on your chosen trusts.

Suggested trusts to follow

Browse all funds
Need help?
Current Site Kepler Trust Intelligence is produced by the investment companies team at Kepler Partners and is the UK’s premier source of detailed qualitative research on investment trusts. Absolute Hedge is a market leading UCITS research database providing proprietary research on funds, themes and strategies in the UCITS space. Kepler Liquid Strategies is a Dublin domiciled UCITS fund platform featuring a number of best-of-breed fund managers. Kepler Partners is a corporate advisory and asset raising boutique specialising in the regulated funds market in Europe and investment trusts in the UK.