In focus
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This five FE Crown-rated fund is tapping into a market where dividends
grew 15.9 per cent last year
FE TRUSTNET
“The income and quality focus
means that the fund should protect
capital in a downturn but will struggle
to keep up in strong upward markets.”
JPM Emerging Markets Income has
made 59.02 per cent since launch in
July 2012, below its MSCI Emerging
Markets benchmark but above the IA
Global Emerging Markets sector.
FACT BOX
MANAGERS: Omar Negyal, Amit Mehta & Jeffrey Roskell / LAUNCHED: 24/07/2012 / FUND
SIZE: £371.1m / OCF: 0.90%
FE CROWN RATING
PERFORMANCE OF FUND VS SECTOR AND INDEX SINCE LAUNCH
IA Global Emerging MSCI Emerging JPM Emerging
Markets (52.19%) Markets (59.07%) Markets (59.02%)
70%
60%
50%
40%
30%
20%
10%
0%
-10%
b1
4
-20%
begun to focus on the sector. One
highly rated example is JPM Emerging
Markets Income, run by Omar Negyal,
Amit Mehta and Jeffrey Roskell.
The £371.7m fund has a total return
approach to emerging markets,
looking to balance income and capital
appreciation. It aims to deliver a
payout above 130 per cent of the MSCI
Emerging Markets index, but takes a
flexible approach to income stocks,
with the only criteria being that each
holding has to pay a dividend.
JPM Emerging Markets Income
holds between 60 and 70 companies,
with about 60 per cent of its portfolio
consisting of stocks with a 3 to 6 per
cent dividend yield; the remaining 40
per cent is split equally into dividend
growth and high dividend-yielding
businesses.
The managers’ approach leads to a
preference for high-quality companies
trading at a discount.
E
merging market equities are
often overlooked by income-
seekers who tend to prefer the
more established hunting grounds
in the developed world. However,
the asset class is becoming more
popular among investors who want
to diversify away from the UK and tap
into future growth potential.
According to the Janus Henderson
Global Dividend Index, emerging
market companies paid dividends of
$120.9bn in 2018 – an increase of 15.9
per cent on the previous year. This
compares with a $99.5bn total payout
from the UK, $509.9bn from the US,
$256.1bn from Europe and $79.1bn
from Japan.
With emerging markets now home to
some of the world’s biggest dividend
payers – names such as China
Construction Bank, China Mobile
and Samsung Electronics – a growing
number of equity income funds have
FE Invest, which recently added
the fund to its Approved List, said:
“Unlike traditional income funds, this
fund takes a more flexible approach
in that capital appreciation is equally
important as the income generator. It
has also consistently delivered a yield
of 130 per cent of the benchmark since
inception.
JPM Emerging
Markets Income
Source: FE Analytics
trustnet.com