Fund Profile

Disclaimer

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.

Overview
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Overview

JPMorgan Indian (JII) aims to generate long-term capital growth by investing in high-quality companies benefitting from exciting secular growth trends in Asia such as the growing young demographic, urbanisation and digitalisation.

Managers Rukhshad Shroff and Rajendra Nair have worked together on the portfolio since 2003, giving them extensive experience in Indian equities. They have access to the vast Emerging Markets and Asia Pacific (EMAP) equity team at JPMorgan, made up of sector specialists who can place Indian companies in the context of their international peers.

The managers have a highly active and stable stock-picking approach intended to look through short-term noise and identify those companies with superior growth prospects over at least five years. Over the long term their approach has led to steady outperformance of the MSCI India benchmark, although in recent years performance has been hit by their decision not to hold one stock which is a major part of the index and has outperformed (as discussed in the Performance section).

Thanks to this underperformance, a tender offer was triggered at the end of September 2019 and 25% of the share capital was repurchased by the trust. However, it will remain the largest India specialist investment trust. Discounts have been volatile in Asia in 2020 thanks to the coronavirus scare. JII’s discount did come in since the tender offer, but has since widened out to 13%.

Analyst's View

In our view, JII offers an attractive way to invest in the exciting secular growth trends in India. Although the country’s economy has stumbled over the short term, in the managers’ view this is largely thanks to the effects of reforms which will be extremely positive in the long run, reducing the size of the black economy and bringing more people into the banking system. We think India may be further down the same path as China, with penetration of financial services, digitalisation and consumer growth trends likely to provide huge opportunities to companies and investors over the coming years.

We think the managers’ focus on finding quality companies and taking a long-term view is likely to benefit from these trends. The extensive resources they can bring to bear on carrying out fundamental research are therefore likely to create a major advantage.

It is also worth noting that India is a major overweight in the JPMorgan Emerging Markets Investment Trust and a minor overweight in the JPMorgan Asian Investment Trust, indicating the conviction the EMAP team have in the country’s best companies.

However, in our view investors in India need to take a long-term approach, given the potential volatility in regional markets and the importance of global macroeconomic factors to India (such as the price of oil). There is also potential political volatility in the country. In this light a discount of over 10% could be an interesting entry point.

bull bear
India has an exciting potential growth trajectory as it rapidly develops Highly active approach can lead to periods of underperformance
Highly experienced managers are well resourced with a regional analyst team Portfolio is expensive on a P/E basis, so earnings growth targets must be met
ESG issues integrated into stock-selection process There is no dividend
Continue to Portfolio

Fund History

09 Feb 2024 Fund Analysis
JII has delivered improved performance under a new management team…
10 Jan 2024 Definitely maybe
Fund flows and discounts may shed some light on a once-in-a-generation opportunity…
13 Jul 2023 Fund Analysis
JII invests in one of the most exciting growth stories in markets…
26 Oct 2022 Fund Analysis
JII offers access to India’s long-term potential at a significant discount…
15 Sep 2022 Same same but different
We discuss the case for emerging markets at different stages of development…
21 Dec 2021 Fund Analysis
JII offers access to the long-term growth story in India on a significant discount…
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…
14 Apr 2021 Fund Analysis
JII is the largest and cheapest trust offering exposure to the growth opportunities in India…
31 Mar 2021 East End boys and West End girls
Our analysts debate whether the US or Asian stock markets will deliver the best returns over the next decade…
20 Oct 2020 Fund Analysis
JII is trading on an extremely wide discount relative to its history…
07 Oct 2020 Five ways to play Indian equities
India is struggling economically – but could there be a value opportunity in the stock market?
13 Mar 2020 Fund Analysis
JII owns a portfolio of high-quality companies benefitting from India’s dramatic secular development…
05 Aug 2019 Fund Analysis
JPMorgan Indian (JII) owns a portfolio of Indian equities, with a bias to quality, invested over the long term...
30 Nov 2017 Race ready?
We analyse the outlook for emerging markets and, in particular, the genuine active funds that focus on them…
08 Nov 2017 Straight talking...
Bronwyn Curtis OBE, chairman of JPMorgan Asian, tells us why making the tough decisions and addressing the elephant in the room are her forte...
27 Sep 2017 Fund Analysis
A growth-orientated Indian equity trust with a track record of long-term outperformance run by a highly-experienced management team...
View all

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