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JPMorgan Russian to expand remit

JPMorgan Russian has published its results for the year ended 31 October 2015. The MSCI 10/40, the benchmark, fell by a further -13.4% (2014: -21.0%). Both JPMorgan Russian’s return to shareholders and the net asset value total return slightly underperformed the benchmark index, with falls of -13.5% and -14.2% respectively. The dividend is being maintained at 13p.

The Board has been increasingly concerned that the investment universe in Russia in which the Company can invest is becoming limited as there are a reduced number of investable stocks listed on the Russian market. They have therefore decided that in order to provide greater investment flexibility they should propose to change the Company’s investment objective and policies to permit up to 10% of the Company’s gross assets to be invested in companies that operate or are located in former Soviet Union Republics. It is the intention that this will allow the investment management team to use their knowledge of companies with links in Russia.

Therefore, a resolution to amend the Company’s investment objective and policies to permit investments will be proposed at the forthcoming AGM and the Board recommends shareholders vote in favour of this resolution. The change in the Company’s investment objective and policies is detailed in an appendix to the Company’s Annual Report and Accounts. Subject to approval of the resolution by shareholders, the intention is that the proposed change in the Company’s investment objective and policies to permit such investments will take effect following the AGM on 3rd March 2016.

The manager says the stocks that were detractors relative to the benchmark index comprised mainly of companies not held as they “do not fundamentally believe them to be quality investments”, but which however performed strongly in the surprise recovery in early 2015 (VTB bank, Transneft). Domestic consumer exposed companies that struggled with the fall in consumption (Dixy, Sollers, Qiwi) and commodity or related companies (Rusal, Volga gas, Novoliptsk steel, TMK) were also detractors.

JRS : JPMorgan Russian to expand remit

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