Eve Maddock-Jones, Investment Week, 27 October 2022:
The proposal by the JPMorgan Russian Securities trust to expand its investment universe outside of Russia “makes sense” according to various experts, but whether or not shareholders will get on side with the idea is uncertain.
Just over eight months since Russia invaded Ukraine and global economic sanctions effectively froze all Russian assets, the JPMorgan Russian Securities board is attempting to outmanoeuvre the restrictions by amending the investment objective.
This will see the trust, which at this point is 100% invested in Russian domiciled companies, access stocks in central, eastern and southern Europe (including Russia), the Middle East and Africa, including those markets that are considered as emerging markets according to the S&P Emerging Europe, Middle East and Africa index.
This proposal was hinted at back in July when its interim results were published.
The portfolio has been suspended since March along with many other Russian focused funds, after sanctions were put in place as a consequence of Russia’s attack, prohibiting the trading of Russian assets.
The suspension is being reviewed on an “ongoing basis”, according to JPMAM. In the trust’s frequently asked questions page it says: “JPMAM continues to monitor and assess the impact of sanctions in relation to a broad variety of risks: investment, convertibility, liquidity, custody, counterparty and settlement risk.”
The impact of this on the trust has been substantial. Over the past year, the trust’s share price total return has fallen 90.8%, according to the Association of Investment Companies, while its assets under management now stands at just £19m…
Halberstadt said that this could even be an opportunity for it to carve out a new niche, with very few investment trusts having direct investment into Africa for example.
James Carthew, head of investment companies QuotedData, was not as optimistic on this, adding: “We do not have a problem with the idea of a JPMorgan-managed competitor to Baring Emerging EMEA Opportunities, but this fund will be too small.”
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