Fund Profile

Disclaimer

Disclosure – Non-Independent Marketing Communication

This is a non-independent marketing communication commissioned by JPMorgan Emerging Markets. 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.

Overview
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Overview

JPMorgan Emerging Markets (JMG) aims to maximise total returns by investing in emerging market equities with a long-term, low turnover approach. The manager, Austin Forey, focuses on identifying companies with the potential to continue compounding their earnings faster than the market over the course of many years, and then aims to hold onto them through their cyclical ups and downs in valuation and share price performance.

The result has been excellent performance in recent years. The trust has been a consistent outperformer in rising and falling markets, beating its benchmark index in NAV total return terms in seven of the past ten years. Over the past five years the trust has comfortably outperformed the index and the peer group, with NAV total returns of 60.4% compared to 40.6% for the benchmark and 41.2% for the Morningstar IT Global Emerging Markets sector.

Austin has managed this trust since 1994 and so has vast experience in the region and has refined his approach over that time. His portfolio is concentrated in consumer names, financials and technology, selected on a bottom-up basis rather than for sector or country reasons. Recent purchases have increased the allocation to the growing Chinese domestic economy, which Austin believes have little exposure to the trade war between the US and China and should continue to grow despite that conflict.

Although focusing on capital growth, the trust has also generated steady dividend growth and aims to grow its dividend each year in line with earnings; the yield is 1.2%, and the trust has implemented an interim dividend this year for the first time.

The trust is trading on a discount of 7.2%. This represents a considerable narrowing since the start of the year and on the five-year average of 11.7%. Discounts on the sector have come in too, from a five-year average of 9.1% to 8.1%, according to Morningstar data. Nonetheless, the board has continued to support the share price with buybacks when the discount has been at or over 8%.

Kepler View

The performance of this trust in recent years has been highly impressive, with NAV beating the benchmark consistently in rising and falling markets. While past performance should not be treated as a prediction, we do think this illustrates the benefits of the low turnover, long-term approach taken by Austin and team. This approach has been linked to greater chances of outperformance by academic research. Austin’s multiple decades of experience and consistent investment style are also a great advantage as this is a region where it can be easy to be sucked in to trends and fashions. The conservatism that comes from seeing multiple crises in the region makes this an attractive option for those seeking exposure to emerging markets.

BULL
BEAR
A highly experienced manager with a strong long-term track record
The growth tilt can lead to underperformance in value driven markets
Exceptional resources and an on-the-ground analyst team
The reticence to use gearing could limit returns at times during the cycle
An attractive discount with the board active in trying to close it

Continue to Portfolio
2022 Kepler Growth Rated Fund

This trust has been awarded a rating by Kepler Trust Intelligence for growth... Find out more

Fund History

13 Jul 2022 Ready player one
We wonder where, if anywhere, should investors look for returns after a tumultuous first half of the year…
02 Mar 2022 Fund Analysis
JMG is aimed at investors who want to maximise their outperformance over the long term…
08 Dec 2021 We are the (ESG) champions
Investment trusts tend to be amongst the best-performing ESG strategies in the combined open- and closed-ended universe…
26 May 2021 Fund Analysis
JMG has delivered exceptional long-term returns with a patient, high conviction approach…
20 Jan 2021 Kepler's top-rated investment trusts for 2021
We update our annual quantitative ratings for investment trusts…
11 Nov 2020 Fund Analysis
JMG has had another outstanding year despite the pandemic…
11 May 2020 Fund Analysis
JMG’s patient, low-turnover approach has left it top of the performance tables…
29 Apr 2020 On solid ground
Our analysis of discounts highlights trusts which are likely to offer significantly less discount downside from the current level…
14 Aug 2019 Dangerous ground: the perils of timing the market
Our research shows that attempting to time the market is, more often than not, a mug's game...
10 Jul 2019 Fund Analysis
JPMorgan Emerging Markets uses deep resources to identify companies with the potential to continue compounding earnings faster than the market...
30 Jan 2019 The Growth Portfolio
Our ten investment trust picks for long-term capital growth...
21 Dec 2018 Fund Analysis
The trust has been a consistent outperformer investing in volatile emerging markets...
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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.