Investment trust insider on JPMorgan Global Emerging Markets Income – James Carthew: JPMorgan’s emerging markets income trust basks in the spotlight
Back in July 2010 JPMorgan launched its Global Emerging Markets Income (JEMI) trust. Its performance was good for a few years and it tended to trade at a premium to net asset value (NAV). However, over 2015 the NAV fell and the discount widened. I’d bought a few shares in 2014 and topped up my holding the following year.
Of course, in retrospect, the trust I should have been buying was JPMorgan Emerging Markets (JMG), which like JEMI has also been shortlisted for a Citwire performance award this year.
Under fund manger Austin Forey, JMG has topped the NAV total return league tables for global emerging markets trusts for some time. However, over the past year, JEMI’s returns have perked up.
JEMI generates its income in the traditional way by buying above-average yielding stocks. This gives its portfolio something of a ‘value’ tilt. As we know, until recently, growth has trumped value for well over a decade. However, in emerging markets, stocks with above average yields can still have decent growth potential. For example, banks are expanding as customers open bank accounts for the first time, and retail businesses can boom as disposable income rises.
Remarkably, JEMI also manages to have an overweight exposure to the technology sector. It has big positions in semiconductor stocks, which have been a big driver of recent returns. It also has exposure to stocks such as Tata Consultancy and Infosys in India and China’s NetEase.
What JEMI does not hold is the big Chinese stocks that dominate its performance benchmark, the MSCI Emerging Markets index. In fact, not holding Alibaba and Tencent were the two main reasons why the trust beat its benchmark over the 12 months to 31 July 2021…. read more here