Under-pressure JPMorgan Emerging Markets (JMG) is proposing to more than double its dividend and change its name to attract more investors to shares trading 9.5% below their real value.
In annual results for the year to 30 June, the £1.2bn investment trust said it would ask shareholders to approve lifting payouts to 1% of NAV each quarter, giving an underlying 4% yield compared to the current 1.5%.
If shareholders agree at the annual general meeting in November, the trust, which was launched in 1991, will rename itself JPMorgan Emerging Markets Growth & Income (JMGI).
That looks likely to overshadow £418m stablemate JPMorgan Global Emerging Markets Income (JEMI), which yields 3.6% and stands on an 8.6% discount to net asset value (NAV). It launched in 2010.
In early trading JMG firmed 1%, or 1.2p, to 127.60, and JEMI eased 0.2% to 156.8p.
JMG chair Adam Lisser said there would be no change in the investment approach of fund managers Austin Forey and John Citron.
The results showed the trust generated a 9.8% total return for shareholders over the year as the shares responded to improved market sentiment after a rocky first quarter of 2025 dominated by fears over US tariffs.
Plans for a 25% tender offer in 2030 if the next five-year performance does not beat the MSCI Emerging Markets index, also helped to narrow the discount, or gap, between the share price and NAV.
However, the underlying investment return trailed the benchmark over the year at 4.9% versus 6.3%. Lisser said this was disappointing after the trust comfortably beat the index in the first half of its financial year.
The company pointed out that for the ten years to 30 June, the underlying NAV total return of 115.9% had underpinned a total 128% return for shareholders with both “significantly” ahead of the benchmark’s 83.7%.
“This combination of high-quality growth and income will further differentiate the company from other emerging market offerings,” it said of its proposed dividend increase.
Our view
James Carthew, head of investment company research at QuotedData, said: “JPMorgan Emerging Markets (JMG)’s decision to offer an enhanced dividend and rename itself JPMorgan Emerging Markets Growth & Income will put it in direct competition with JPMorgan Global Emerging Markets Income (JEMI) and cause confusion between the two. It seems likely, therefore, that there will be pressure to merge the two. As a happy JEMI shareholder, I would be unhappy with that. There is a vast difference now between the total returns on the two trusts, with JEMI having outperformed JMG by almost 38 percentage points over the past five years. The JMG dividend hike looks like a similar move to that made by Dunedin Income Growth (DIG) a couple of weeks ago, where an enhanced dividend might be hoped to distract from poor performance.”
