JPMorgan Emerging MD - Half-year Financial Report

JPMorgan Emerging Markets Dividend Income

02/04/2026 07:00

RNS Number : 1488Z

JPMorgan Emerging Mkts Div Inc PLC

02 April 2026

 

LONDON STOCK EXCHANGE ANNOUNCEMENT

JPMORGAN EMERGING MARKETS DIVIDEND INCOME PLC

UNAUDITED HALF YEAR RESULTS FOR THE SIX MONTHS

ENDED 31ST JANUARY 2026

 

Legal Entity Identifier: 549300OPJXU72JMCYU09

Information disclosed in accordance with the DTR 4.2.2

 

JPMorgan Emerging Markets Dividend Income plc (the 'Company' or 'JEMI') announces its half year results for the six months period ended 31st January 2026. The full half year report and financial statements can be accessed via the Company's website at www.jpmorganemergingmarketsdividendincome.co.uk.

 

Highlights:

·      NAV total return for the six months ended 31st January 2026 was +20.2%, outperforming the MSCI Emerging Markets Index (the 'Benchmark'), which returned +19.3% in sterling terms (total return with net dividends reinvested). Share price total return for the period was +25.6%.

 

·      Five-year cumulative NAV total return to 31st January 2026 was +52.7%, compared with +29.8% for the Benchmark; five-year share price cumulative total return was +55.0%.

 

·      Ten-year cumulative NAV total return to 31st January 2026 was +220.0%, compared with +170.0% for the Benchmark; ten-year share price cumulative total return was +265.8%.

 

·      The Company continues to deliver strong long-term performance, with annualised returns in NAV terms of +13.4% (three years), +8.8% (five years), and +12.3% (ten years), all ahead of corresponding Benchmark returns.

 

·      Several stocks contributed positively to performance, notably holdings in Samsung Electronics (South Korea), ASE Technology (Taiwan), Axia Energia (Brazil), and portfolio overweights in sectors such as Financials, Consumer Discretionary, and Consumer Staples.

 

·      During the reporting period, the Company repurchased 6,770,981 shares into Treasury at a weighted average discount of 9.4% and at a total cost of £10.9 million, increasing the NAV per ordinary share by 0.2%. 

 

·      Dividends: For the last financial year ended 31st July 2025, the Board paid a total dividend of 5.6p per share. As set out in last year's Annual Report, the Board announced its intention to increase the absolute level of dividend and ensure a more even distribution throughout the year. To date, two interim dividends of 1.5p per share (total 3.0p in the period) have been declared for this financial year ending 31st July 2026. The Board intends that the third interim dividend for this financial year will also be 1.5p per share, with a fourth interim dividend expected to be at least the same amount. 

 

 

Elisabeth Scott, Chair, commented: 

 

"I am delighted to report an exceptionally strong period of performance for both Emerging Markets and your Company over the six months ended 31st January 2026…extending the Company's strong long-term track record."

 

"At the time of writing, the global outlook is uncertain and the Middle East conflict looks likely to last longer than initially expected. Oil and gas prices have shot up as shipping is held up in the Straits of Hormuz. Stock markets have been turbulent and are likely to remain volatile while the hostilities persist. Nonetheless, the outlook for Emerging Markets is relatively bright, benefitting from domestic infrastructure spending, improvements in corporate governance, along with demographic advantages. These structural benefits will not disappear as a consequence of geopolitical volatility and are the underpinning of the long-term positive story. In times of uncertainty, shareholders can take comfort from the Investment Manager's style of investing. Emerging Market companies which also pay dividends are inclined to be more prudent in their use of capital, a discipline which should ensure greater predictability of returns to shareholders."

Omar Negyal, Portfolio Manager, commented:

 

"We are optimistic about the outlook for emerging markets. Their strong outperformance in 2025 was built on support from a lower US dollar, attractive valuations and strong earnings, and these drivers are anticipated to hold as we look ahead to the coming year and beyond. We believe EM equities are therefore set for further robust performance, with further support coming from lower local interest rates, higher earnings growth, attractive valuations, ongoing improvements in corporate governance, and resilient global growth. On the downside, recent events in the Middle East raise uncertainties about the near-term prospects of economies across the region. Oil price volatility is also likely to increase significantly if the conflict is not short-lived. However, overall, the current investment environment is supportive for EM and it is providing us with many interesting, varied and well-priced opportunities across countries and sectors. Our focus will remain on building a portfolio which provides shareholders with exposure to emerging markets' exciting growth story, while also delivering an attractive yield and regular income."

 

CHAIR'S STATEMENT

Performance

I am delighted to report an exceptionally strong period of performance for both Emerging Markets and your Company over the six months ended 31st January 2026. For the six-month period, the Company recorded a total return on net assets of +20.2%, outperforming the Benchmark, the MSCI Emerging Markets Index with net dividends reinvested (in sterling terms) (the 'Benchmark'), which returned +19.3% . The total return to shareholders (which includes both the share price return and dividends) was an impressive +25.6%, reflecting a narrowing of the discount to net asset value ('NAV') at which the Company's shares trade.

This performance extends the Company's strong long-term track record. Over the three-, five- and ten-year periods ended 31st January 2026, the Company realised annualised returns of +13.4%, +8.8% and +12.3% respectively in NAV terms, well ahead of the corresponding annualised Benchmark returns. The table in the Investment Manager's Report provides a full breakdown of performance attribution.

The Investment Manager's Report, which can be found below, reviews the market environment and the Company's performance over the reporting period in more detail and comments on the investment strategy and outlook for Emerging Markets. There was something of a rotation away from Developed Markets, in particular the US, and into Emerging Markets. Omar describes some of the triggers for this rotation, which include a weaker US dollar, higher commodity prices and some important structural corporate governance reforms. A key contributor to performance was the Company's underweight position in India, which has underperformed other Emerging Markets and where dividend yields are low. The portfolio's gearing also made a positive contribution.

Revenue and Dividends

The Company's net revenue earnings for the six months to 31st January 2026 amounted to 2.20p per share (six months to 31st January 2025: 1.48p per share). Similar to prior years, the Company expects to earn the bulk of its dividend income during the second half of its financial year.

In the last financial year ended 31st July 2025, the Board paid a total dividend of 5.6p per share, a modest increase from 5.4p per share in the prior year. This dividend was fully covered by income. As set out in last year's Annual Report, the Board announced its intention to increase the absolute level of dividend and to ensure a more even distribution of dividends to shareholders throughout the year.

The Board has declared two interim dividends of 1.5p per share with respect to the current financial year ending 31st July 2026. This represents a 50% increase compared with the interim dividends declared for the equivalent period last year. The first interim dividend was paid on 23rd January 2026. The second interim dividend will be paid on 24th April 2026 to shareholders on the register as at the close of business on 6th March 2026. The ex-dividend date was 5th March 2026. Two further interim dividend payments for the current financial year are expected to be paid in July and October 2026. In the absence of unforeseen circumstances, the Board intends that the third interim dividend for this financial year will also be 1.5p per share. The fourth interim dividend, which will be determined in September 2026, is expected to be at least the same amount as each of the three interim dividends. It is the Board's intention to increase the absolute level of dividend for this financial year, compared to the prior year.

The Board reviews dividend receipts at each Board meeting, given their importance to the Company's strategy. The Board carefully considers the outlook for dividend receipts with the Portfolio Manager on a regular basis, including a sensitivity analysis of the impact of currency movements on revenue receipts. As shareholders are aware, the Company receives dividends in the currencies of developing countries and US dollars but pays dividends in sterling. It has not been the Company's policy to hedge currency risk as this is expensive and, for many currencies, impracticable. This policy inevitably means that the Company's asset values, and cash flows, may be damaged by adverse currency movements (if sterling strengthens) and flattered by favourable moves (if sterling weakens) relative to Emerging Market currencies and the US dollar.

Despite any such currency fluctuations, your Board and the Investment Manager are of the view that over the long term, Emerging Markets offer attractive income prospects alongside the prospects for strong earnings growth.

Gearing and Loan Facilities

The Board believes that gearing can be used to enhance long-term shareholder returns. Gearing levels are discussed with the Portfolio Manager at each Board meeting. The Company's gearing strategy is funded by its debt facilities. Presently, the Company has a US$40 million revolving credit facility, along with an additional US$20 million accordion, provided by Industrial and Commercial Bank of China Limited (London) Plc ('ICBC'), with two one-year extension options. The Investment Manager has also begun to make use of Contracts for Difference, which can be a more cost effective means of obtaining gearing.

While borrowing costs may be a concern to some shareholders, it is essential to recognise the strategic benefits that gearing can offer, particularly for an income-focused investment trust. By leveraging the Company's investment capacity through gearing, the Investment Manager is able to access a broader range of income-generating opportunities that have the potential to enhance the portfolio's overall yield. As at 31st January 2026, gearing stood at 4.8%, slightly lower than the 4.9% level at 31st July 2025.

Share Repurchases and Issuance

Over the six months to 31st January 2026, the Company's share price traded at an average discount to NAV of 8.8% (six months to 31st July 2025: 11.3%). The Board regularly considers the merits of buying back shares in order to manage the level and volatility of the discount. The Company will only buy back shares if doing so is considered to be in the best interests of shareholders.

During the reporting period, the Company repurchased 6,770,981 shares into Treasury at a weighted average discount of 9.4% and at a total cost of £10.9 million. It did not issue any shares. Such purchases underscore your Board's belief that there is attractive value in the investments held by the Company. As shares are only bought back at a discount to the prevailing NAV, share buybacks benefit shareholders as they increase the NAV per share of remaining outstanding shares. These purchases were value accretive for shareholders, increasing the NAV per ordinary share by 0.2%. All shares repurchased are held in Treasury rather than cancelled so that they may be reissued at a premium to NAV at a later date.

At the time of writing, the discount stands at 10.0%. The Board will continue to actively manage the Company's discount in support of its commitment to seek a stable discount or premium over the longer term, in recognition of the Company's long-term consistent and strong investment performance. In the period since the end of the half year and 1st April 2026, the Company has repurchased an additional 250,000 shares into Treasury.

Name Change

During the period, the Company changed its name from JPMorgan Global Emerging Markets Income Trust plc to JPMorgan Emerging Markets Dividend Income plc. The Board believes that the new name better reflects the Company's investment strategy and its focus on providing shareholders with exposure to dividend-paying companies across Emerging Markets.

Investment Team

Omar Negyal has managed the portfolio since 2012 and continues to manage the assets of the Company with the support of the Investment Manager's extensive team of research analysts across Emerging Markets.

Environmental, Social and Governance Factors

The Investment Manager incorporates Environmental, Social and Governance ('ESG') considerations into its investment process, as these factors may have a financially material impact on a company's ability to deliver shareholder value. Your Board shares the Investment Manager's belief in the importance of ESG factors for long-term investments and supports the Portfolio Manager's efforts to maintain continuous engagement with investee companies. The Investment Manager's latest Investment Stewardship Priorities can be found at: https://am.jpmorgan.com/gb/en/asset-management/adv/about-us/investment-stewardship/

Stay Informed

The Board would like to ensure that all shareholders are kept well-informed, and we encourage those who have not already done so to consider signing up for our email updates, which include news and views, as well as the latest performance. If you have not already signed up to receive these communications and you wish to do so, you can opt in via https://tinyurl.com/JEMI-Sign-Up or by scanning the QR code in the full Half Year Report.

Outlook

At the time of writing, the global outlook is uncertain and the Middle East conflict looks likely to last longer than initially expected. Oil and gas prices have shot up as shipping is held up in the Straits of Hormuz. Stock markets have been turbulent and are likely to remain volatile while the hostilities persist.

Nonetheless, the outlook for Emerging Markets is relatively bright, benefitting from domestic infrastructure spending, improvements in corporate governance, along with demographic advantages. These structural benefits will not disappear as a consequence of geopolitical volatility and are the underpinning of the long-term positive story.

In times of uncertainty, shareholders can take comfort from the Investment Manager's style of investing. Emerging Market companies which also pay dividends are inclined to be more prudent in their use of capital, a discipline which should ensure greater predictability of returns to shareholders.

On behalf of the Board, I would like to thank you for your ongoing support and commitment to the Company.

Elisabeth Scott

Chair                                                                                                                                               1st April 2026

 

INVESTMENT MANAGER'S REPORT

For the six-month period ended 31st January 2026, the Company's total return on net assets, including dividends, was +20.2%. This compares favourably with our Benchmark, with dividends reinvested, which returned +19.3%. The return to shareholders, including dividends, was +25.6%. This performance extends the Company's strong long-term performance track record: Over the three-, five- and ten-year periods ended 31st January 2026, the Company realised annualised returns of +13.4%, +8.8% and +12.3% respectively in NAV terms, well ahead of the corresponding annualised Benchmark returns of +12.6%, +5.4% and +10.4%.

Investment Environment

Despite a turbulent start, Emerging Market ('EM') assets performed strongly over the past year. Energised by a weakening dollar and positive earnings growth, 2025 saw EM equities deliver their best calendar-year performance in nearly a decade. Confidence in the US dollar's long-term purchasing power, and its status as a reserve currency, diminished due to record levels of US federal government debt and institutional concerns, including the future independence of the Federal Reserve. These issues fuelled widespread speculation that the era of US 'exceptionalism', which has underpinned the US dollar and the dramatic outperformance of US equities over recent years, is drawing to a close.

Whatever the drivers, a weaker US dollar typically acts as a powerful tailwind for EM, reducing the burden of dollar-denominated debt, lowering imported inflation for emerging economies and increasing policy flexibility. It is therefore not surprising that recent dollar depreciation, combined with high US equity valuations and the superior real yields on offer in developing economies, have encouraged an increasing rotation away from US capital markets in favour of EM. Indeed, in our assessment, there has been a marked shift in investors' attitudes towards emerging markets, which are now viewed as a strategic diversification tool with more compelling risk-reward profiles.

Performance across all major EM countries leaned towards the positive over the past year. South Korea emerged as a standout performer, driven by demand for advanced memory chips essential to the rapid spread of artificial intelligence (AI), and by corporate governance reforms, which are improving shareholder returns. Latin American ('LATAM') markets enjoyed a plethora of favourable influences, including a rotation into commodity stocks (discussed further below), progression through their respective monetary easing cycles and pro-market electoral developments. On the other hand, India stood out as a notable laggard during the year's EM rally. Investors became increasingly wary of the market's premium valuations, especially as earnings weakened in response to slower economic growth. This slowdown was the result of a decline in manufacturing output, elevated food price inflation, and more muted urban consumption. This valuation reset has compressed India's historical premium to broader emerging markets, although parts of the market remain relatively expensive.

Technology was a key sectoral driver for EM during the review period. The rapid uptake of AI continued to support AI-memory related names in South Korea, while Taiwanese participants in the semiconductor supply chain also performed well. Investors continue to respond positively to US technology companies' plans to increase capital expenditure to build out their AI capabilities, and this has pushed valuations to higher levels across the AI and broader technology supply chain.

Elsewhere, a rally in commodity prices accelerated towards year-end. Dollar depreciation and inflation fears drove institutional buyers and central banks towards precious metals such as gold and silver as stores of value. In addition, the AI revolution and the transition to green energy are expected to require large quantities of industrial metals such as copper and aluminium. The prices of these metals are also being supported by limited supply - the result of years of underinvestment in aging mines, regulatory limits on supply and operational setbacks in major mining regions which have left inventories at historic lows, exacerbating the imbalance between demand and supply.

Performance attribution

for the six months ended 31st January 2026

%
%
Benchmark total return
19.3
Asset allocation
2.5
Stock selection
(2.5)
Gearing/cash
1.3
Investment Manager contribution
1.3
Portfolio total return
20.6
Management fees and other expenses
(0.5)
Impact of provision for capital gains tax
0.2
Impact of finance costs
(0.3)
Share buy-backs
0.2
Other effects
(0.4)
Return on net assets1
20.2
Return to shareholders2
25.6

Source: JPMAM and Morningstar. All figures are on a total return basis.

Performance attribution analyses how the Company achieved its recorded performance relative to its Benchmark.

1     Based on the cum income net asset value per ordinary share (net of all fees and expenses), including dividends reinvested.

2     Based on share price, including dividends reinvested.

Performance Drivers

Country contributors

At the country level, our longstanding underweight in India was the most positive relative contributor to returns over the past six months, thanks to both good asset allocation decisions and strong stock selection. The Indian market performed well in the first few years of this decade, but we maintained our underweight position as valuations remained expensive, despite the country's strong long term growth prospects. It is also difficult to find Indian stocks offering an attractive yield, and we typically found better value opportunities in other markets. This underweight detracted from returns in previous years, but our caution on the Indian market has begun to pay off more recently as growth slowed and investors came to share our concerns about excessive valuations.

Our combined underweight to the United Arab Emirates (UAE) and Saudi Arabia also enhanced relative performance. The region's exposure to weak oil prices slowed growth and weighed on stock prices, most notably in Saudi Arabia, which acted as a drag on equity market sentiment across the Gulf. Additionally, the currencies of both the UAE and Saudi Arabia are fixed against the US dollar, and this meant that these economies did not see the same currency tailwind from dollar depreciation as other EM economies. Our overweight to Brazil was positive, various areas of the Brazilian market performed well as moderating inflation and the prospects for monetary policy easing attracted flows into the region from investors seeking opportunities beyond the US market.

By far the largest detractor from relative performance was our positioning in South Korea. This was mostly due to stock selection, as we did not own SK Hynix, one of the world's key memory chip manufacturers benefitting from significant increases in the prices of memory technology. We did have a large position in Samsung Electronics which also performed well over the period but this was not enough to offset the Hynix underweight. The difference in exposure is explained by the relative dividend yields of the stocks: Samsung offered a reasonable dividend yield whereas SK Hynix's lower payout meant a yield less than 1%, a level we found unattractive.

Lastly, poor stock selection in Mexico also detracted from returns. Our holdings in consumer related names came under pressure due to the weak consumer environment, while we were underweight Mexican metals & mining names which did well thanks to the recent rally in commodities.

Stock contributors

Top five contributors
Top five detractors
1.
Samsung Electronics
1.
SK Hynix (not held)
2.
ASE Technology
2.
Realtek Semiconductor
3.
Xiaomi (not held)
3.
Quanta Computer
4.
Axia Energia
4.
Power Grid Corporation of India
5.
Meituan (not held)
5.
NetEase

At the stock level, aside from the significant return contribution from Samsung Electronics and the adverse impact of not owning SK Hynix - both companies which benefitted significantly from skyrocketing memory technology prices, Taiwan's ASE Technology had a favourable impact on returns given its position in the AI supply chain as a leading-edge supplier of advanced packaging and related services. An underweight to Xiaomi (not owned), a Chinese consumer electronics producer, proved beneficial as the company faced a severe input cost squeeze. Elsewhere in the consumer sector, an underweight to Chinese internet retailer Meituan (not owned) contributed positively, as the company reported an operating loss due to intense subsidy wars within the Chinese food delivery and instant retail spaces.

Amongst our energy holdings, Axia Energia, a Brazilian renewable energy producer, delivered strong returns through a successful post-privatisation turnaround strategy that focused on cost discipline, portfolio simplification, and capital returns. Additionally, power prices in Brazil have been holding up more strongly than expected, which has improved the company's earnings outlook.

On the negative side, several holdings suffered near-term setbacks, but all remain in the portfolio due to their favourable longer-term prospects. For example, our exposure to Realtek, a Taiwanese supplier of technology products and services, detracted from relative returns as the stock suffered from a cyclical downturn in demand for consumer electronics and inventory destocking that weighed on its core business. Our position in Quanta Computer, a Taiwanese computer hardware business, underperformed as its guidance for the last six months was less upbeat than its peers, thanks mainly to a transition to next generation servers, and changes to customers' investment plans. However, once demand for new servers gathers momentum, revenue is expected to re-accelerate.

Indian utility company Power Grid lagged as the company grappled with structural execution bottlenecks. But management expects regulatory challenges to be resolved, and sentiment has improved after recent upgrades to capex and execution guidance. In addition, the company is well-positioned to benefit from favourable longer-term tailwinds as India transitions to renewable energy. The final notable detractor was NetEase, a Chinese gaming and multimedia company. A delay in revenue recognition and higher spending on sales and marketing led to disappointing results. Yet NetEase's underlying operations still appear to be on track, and the releases of two highly anticipated games are expected to be positive catalysts over the coming year.

Portfolio positioning and changes

We build the portfolio on a bottom-up basis, selecting stocks based on their sound fundamental qualities, strong balance sheets and capacity to pay dividends over the long term. Naturally, some areas within emerging markets offer more investment opportunities than others, and this results in tilts within the portfolio towards some sectors and countries. From a sectoral viewpoint, the portfolio's three key sector overweights are Financials, Consumer Discretionary, and Consumer Staples, while historically, the portfolio is usually underweight in Materials, Industrials, and Healthcare. A noteworthy change in sector tilt over the past year has been in Technology. This has been an area where we have had a successful and remunerative multi-year overweight, but we are now modestly underweight. We still believe there are many positives emanating from the AI revolution, but valuations in aggregate have risen dramatically (and dividend yields have fallen), so we believe this justifies a more cautious approach.

At the country level, significant portfolio overweights include Brazil, Indonesia, and Mexico. As with our sector allocations, these country weightings are driven by the many individual stock opportunities which we view as attractive from an income investor's perspective. In contrast, India is our largest country underweight. India's long-term growth prospects are very positive and investor interest in this market remains high. However, even after the underperformance of the past year, some valuations remain extreme, making it difficult for us to find attractive income paying stocks.

As ever, the portfolio changes we implemented over the past six months were mainly motivated by individual stock considerations. We opened new positions in DB Insurance, a South Korean insurer, and Axia Energia, a Brazilian renewable energy company. Both acquisitions were motivated by anticipated improvements in corporate governance and capital allocation. In the case of DB Insurance, these improvements are being driven by the Korean government's 'Value-Up' program, which aims to lift shareholder returns across the market. Axia Energia has also announced a significant upgrade to its shareholder remuneration policy.

In the technology space, we started a position in MediaTek, a Taiwanese semiconductor manufacturer, as we are positive on the risk-reward profile of its potential projects in the AI supply-chain, in particular its work with Google on the development of Application-Specific Integrated Circuit (ASIC) chips. These chips are faster, more efficient and less energy hungry than general-purpose accelerators for specific AI tasks. Lastly, to reduce our underweight to materials, we purchased South African gold miner Gold Fields, and Vale, a Brazilian supplier of iron ore, nickel, copper and precious metals. We are positive on the outlook for gold, due to ongoing uncertainties about the US dollar's role as a reserve currency, and we are bullish on iron ore due to a resilient pricing environment, which is being supported by high-quality ore premiums and a steepening global cost curve.

We undertook a repositioning in Chinese consumer names during the review period. We sold positions in Mengniu Dairy Company, liquor and wine producer Wuliangye, and Supor, a supplier of consumer appliances, in response to stock specific risks: Demand for dairy products has weakened; competitive pressures are building in the Chinese liquor market; and a government subsidy aimed at boosting consumption via appliance upgrades expires at the end of 2026. We pivoted towards several leading brands with pricing power within their respective segments. Purchases included distiller and winemaker Moutai, hotelier H World, and Anta Sports, which owns popular clothing brands. We also added to several existing positions, including Tencent, China's internet content behemoth, to increase our active weight in this name - a reflection of our positive view on the stock. Additionally, we added to our holding in Samsung Electronics, to take advantage of its still attractive valuation and an improvement in its earnings outlook. This top-up paid off as the stock rallied into year-end.

Conversely, we trimmed a few profitable positions where we thought valuations were beginning to look relatively stretched. For example, we reduced our holdings in Chinese internet retailer Alibaba, and in two Indian names - Shriram, which specialises in commercial vehicle finance, and auto manufacturer Maruti Suzuki. We continue to view these businesses as attractive investments, however, as they became more expensive, we believed it was prudent to manage position sizes.

Notable outright sales over the last six months included two Indian IT services companies, Infosys and HCL Tech. These disposals were motivated by worries about the impact of AI on these businesses. Some industry pundits argue that AI will actually improve the long-term prospects of companies focused on outsourcing business processes and software development. However we believe it is judicious to limit our exposure to these companies until there is more tangible evidence to support this hypothesis. We also closed our position in OPAP, a Greek lottery operator. This stock has done well for the portfolio over several years, but we felt the planned merger with another business materially changed the company's investment thesis, so we rotated into other more attractive opportunities.

Outlook

We are optimistic about the outlook for emerging markets. Their strong outperformance in 2025 was built on support from a lower US dollar, attractive valuations and strong earnings, and these drivers are anticipated to hold as we look ahead to the coming year and beyond. We believe EM equities are therefore set for further robust performance, with further support coming from lower local interest rates, higher earnings growth, attractive valuations, ongoing improvements in corporate governance, and resilient global growth. China could see further green shoots emerging after a multi-year consumption slowdown, while South Korea remains supported by the government's corporate reforms and by AI. Taiwan is also likely to be an ongoing beneficiary of the AI boom. Elsewhere, LATAM could experience strong upside thanks to outsized monetary policy stimulus and key political shifts.

On the downside, recent events in the Middle East raise uncertainties about the near-term prospects of economies across the region. Oil price volatility is also likely to increase significantly if the conflict is not short-lived.

US dollar weakness may continue to be a notable theme. Dollar depreciation, should it persist, could prove supportive for EM over 2026 and potentially beyond. The greenback's appeal as a reserve currency may be gradually diminishing and a rotation out of US capital markets could continue if US valuations remain elevated and real yields in developing markets maintain their advantage over those in the US. To the extent that the dollar weakens, the debt burden for emerging economies - much of it denominated in US dollars - could ease, potentially creating room for fiscal stimulus and bolstering economic resilience.

Commodity price strength is likely to be another important theme. Central bank purchases of gold as an alternative to US dollars should provide continued support for precious metals. Their role as a general hedge against inflation and geopolitical risks may also grow in significance given recent events in the Middle East. EM miners should benefit accordingly.

There are several other reasons to expect EM commodity producers to continue to do well. The global trend towards electrification is gathering momentum and will drive structural demand for a range of industrial metals. Prices for these commodities are also being boosted by acute supply disruptions at major mines, and tariff-related stockpiling. China's voracious appetite for bulk metals and materials has weakened in recent years due to the slump in the Chinese property market, but this adverse impact on commodity markets is being increasingly offset by rising demand from new economy drivers such as AI data centre infrastructure, electric vehicle (EV) adoption, and global energy grid modernisation.

Corporate governance reforms are another structural trend that will provide ongoing impetus to EM in the year ahead and well beyond. A key frustration of the past decade has been the weak translation of EM GDP growth into corporate earnings growth. This can be attributed to weaker corporate governance, poor capital allocation, and deficient shareholder protections. However, there has been a marked shift in markets such as South Korea, where the authorities have taken notice of the low relative valuations of their markets and have initiated large scale reforms to change this. The strong performance of these markets in the last year shows the powerful upwards re-valuation effects which occur when companies set their mind to improving their capital allocation.

The AI revolution will remain a driver of EM gains for the foreseeable future. EM technology companies, especially in South Korea and Taiwan are underwriting the global AI revolution. The EM technology sector encompasses world-leading companies in semiconductors, electronics, hardware, software, outsourcing and cloud technology. There seems little risk that their supremacy in many areas will be challenged in the near term, and with the AI revolution only just beginning, these companies will continue to prosper. However, while our structural view of this sector is positive, we will remain cautious in our positioning as sentiment looks a little too buoyant.

Additionally, we are mindful of risks related to perceived 'AI Losers'. We have already seen some companies in industries such as IT services and software experiencing significant pressure on their stock prices on the view that they are vulnerable to declining demand as AI renders their businesses models obsolete. It will be important for us to exercise caution in sectors that might fall in this camp. But at the same time, we will be ready to take advantage of opportunities created by what we believe to be overly negative sentiment.

Other potential risks include a possible slowdown in the US interest rate cutting cycle if inflation re-accelerates - a possibility that becomes more likely if oil prices rise in any sustained way. This may drive the dollar higher, tightening financial conditions and reducing policy flexibility in EM and globally. Finally, the long-term structural consequences of increased US tariffs may lead to delays in major investment spending and force a permanent recalibration of global trade routes, to the detriment of growth in emerging economies and elsewhere.

However, overall, the current investment environment is supportive for EM and it is providing us with many interesting, varied and well-priced opportunities across countries and sectors. Our focus will remain on building a portfolio which provides shareholders with exposure to emerging markets' exciting growth story, while also delivering an attractive yield and regular income. We look forward to reporting on the portfolio's further progress.

 

For and on behalf of

J.P.Morgan Asset Management

Investment Manager

Omar Negyal

Portfolio Manager                                                                                                                           1st April 2026

 

 

INTERIM MANAGEMENT REPORT

The Company is required to make the following disclosures in its interim report.

Principal Risks and Uncertainties

The principal risk and uncertainties, and emerging risks faced by the Company have not changed from those reported in the Annual Report and Financial Statements for the year ended 31st July 2025 and fall into the following broad categories: investment; strategy; financial; operational and cybercrime; accounting, legal and regulatory; political and economic; and environmental, social and governance.

Related Parties Transactions

During the first six months of the current financial year, no transactions with related parties have taken place which have materially affected the financial position or the performance of the Company during the period. Details of related party transactions are contained within the 2025 Annual Report and Financial Statements.

Going Concern

The Directors believe, having considered the Company's investment objective, risk management policies, capital management policies and procedures, nature of the portfolio, including an analysis of the portfolio's liquidity, and expenditure projections, that the Company has adequate resources, an appropriate financial structure and suitable management arrangements in place to continue in operational existence for the foreseeable future and, more specifically, that there are no material uncertainties pertaining to the Company that would prevent its ability to continue in such operational existence for at least 12 months from the date of the approval of this half yearly financial report.

In reaching that view, the Board was mindful of the economic outlook and geopolitical landscape, and the longer term impact this may have on the global economy, including Emerging Markets and the sectors in which the Company operates. The Directors have also reviewed the Company's compliance with its debt covenants. For these reasons, they consider it reasonable to continue to adopt the going concern basis in preparing the condensed set of financial statements.

Directors' Responsibilities

The Board of Directors confirms that, to the best of its knowledge:

(i)    the condensed set of financial statements contained within the half yearly financial report has been prepared in accordance with FRS 104 'Interim Financial Reports' and gives a true and fair view of the state of the affairs of the Company and of the assets, liabilities, financial position and net return of the Company, as at 31st January 2026, as required by the Disclosure Guidance and Transparency Rules ('DTR') 4.2.4R; and

(ii)   the interim management report includes a fair review of the information required by DTR 4.2.7R and DTR 4.2.8R of the Disclosure Guidance and Transparency Rules.

In order to provide these confirmations, and in preparing these condensed set of financial statements, the Directors are required to:

•      select suitable accounting policies and then apply them consistently;

•      make judgements and accounting estimates that are reasonable and prudent;

•      state whether applicable UK Accounting Standards have been followed, subject to any material departures disclosed and explained in the condensed set of financial statements;

•      prepare the condensed set of financial statements on the going concern basis unless it is inappropriate to presume that the Company will continue in business;

and the Directors confirm that they have done so.

 

For and on behalf of the Board

Elisabeth Scott

Chair                                                                                                                                               1st April 2026

 

 

CONDENSED STATEMENT OF COMPREHENSIVE INCOME

(Unaudited)
Six months ended
31st January 2026
(Unaudited)
Six months ended
31st January 2025
(Audited)
Year ended
31st July 2025
Revenue
Capital
Total
Revenue
Capital
Total
Revenue
Capital
Total
£'000
£'000
£'000
£'000
£'000
£'000
£'000
£'000
£'000
Net gains on investments held
at fair value through profit
or loss
-
83,176
83,176
-
21,559
21,559
-
40,075
40,075
Net gains on derivative financial
instruments1
-
97
97
-
-
-
-
-
-
Foreign currency exchange
gains/(losses)
-
806
806
-
(902)
(902)
-
899
899
Income from investments
7,452
-
7,452
5,893
104
5,997
19,987
236
20,223
Interest receivable and similar
income
169
-
169
132
-
132
240
-
240
Gross return
7,621
84,079
91,700
6,025
20,761
26,786
20,227
41,210
61,437
Management fee
(526)
(1,228)
(1,754)
(493)
(1,151)
(1,644)
(973)
(2,270)
(3,243)
Other administrative expenses
(429)
-
(429)
(525)
-
(525)
(919)
-
(919)
Net return before finance
costs and taxation
6,666
82,851
89,517
5,007
19,610
24,617
18,335
38,940
57,275
Finance costs
(256)
(597)
(853)
(332)
(768)
(1,100)
(613)
(1,431)
(2,044)
Net return before taxation
6,410
82,254
88,664
4,675
18,842
23,517
17,722
37,509
55,231
Taxation
(573)
(1,289)
(1,862)
(430)
234
(196)
(1,749)
219
(1,530)
Net return after taxation
5,837
80,965
86,802
4,245
19,076
23,321
15,973
37,728
53,701
Return per ordinary share(note 3)
2.20p
30.50p
32.70p
1.48p
6.65p
8.13p
5.69p
13.43p
19.12p

1     These relate to CFDs.

 

CONDENSED STATEMENT OF CHANGES IN EQUITY

Called up
Share
Capital
share
premium
redemption
Other
Capital
Revenue
capital
account
reserve
reserve1
reserve1
reserve1
Total
£'000
£'000
£'000
£'000
£'000
£'000
£'000
Six months ended 31st January 2026 (Unaudited)
At 31st July 2025
2,973
222,582
13
63,106
140,057
20,791
449,522
Repurchase of ordinary shares into Treasury
-
-
-
(10,910)
-
-
(10,910)
Net return after taxation
-
-
-
-
80,965
5,837
86,802
Dividends paid in the period (note 4)
-
-
-
-
-
(10,911)
(10,911)
At 31st January 2026
2,973
222,582
13
52,196
221,022
15,717
514,503
Six months ended 31st January 2025 (Unaudited)
At 31st July 2024
2,973
222,582
13
90,611
102,329
20,116
438,624
Repurchase of ordinary shares into Treasury
-
-
-
(12,689)
-
-
(12,689)
Net return after taxation
-
-
-
-
19,076
4,245
23,321
Dividends paid in the period (note 4)
-
-
-
-
-
(9,789)
(9,789)
At 31st January 2025
2,973
222,582
13
77,922
121,405
14,572
439,467
Year ended 31st July 2025 (Audited)
At 31st July 2024
2,973
222,582
13
90,611
102,329
20,116
438,624
Repurchase of ordinary shares into Treasury
-
-
-
(27,505)
-
-
(27,505)
Net return after taxation
-
-
-
-
37,728
15,973
53,701
Dividends paid in the year (note 4)
-
-
-
-
-
(15,298)
(15,298)
At 31st July 2025
2,973
222,582
13
63,106
140,057
20,791
449,522

1     These reserves form the distributable reserve of the Company and may be used to fund distributions to investors.

 

CONDENSED STATEMENT OF FINANCIAL POSITION

(Unaudited)
At
31st January
2026
£'000
(Unaudited)
At
31st January
20251
£'000
(Audited)
At
31st July
20251
£'000
Fixed assets
Investments held at fair value through profit or loss
512,373
467,207
466,501
Investments on loan held at fair value through profit or loss1
22,692
3,837
5,553
Total investments held at fair value through profit or loss
535,065
471,044
472,054
Current assets
Derivative financial instrument assets2
179
-
-
Debtors
3,229
553
1,296
Current asset investments
9,114
879
6,267
Cash at bank
268
343
1,723
12,790
1,775
9,286
Current Liabilities
Creditors: amounts falling due within one year
(32,041)
(32,461)
(31,423)
Derivative financial instrument liabilities2
(16)
-
-
Net current liabilities
(19,267)
(30,686)
(22,137)
Total assets less current liabilities
515,798
440,358
449,917
Creditors:amounts falling due after more than one year
-
(322)
-
Provision for liabilities- Indian capital gains tax
(1,295)
(569)
(395)
Net assets
514,503
439,467
449,522
Capital and reserves
Called up share capital
2,973
2,973
2,973
Share premium account
222,582
222,582
222,582
Capital redemption reserve
13
13
13
Other reserve
52,196
77,922
63,106
Capital reserve
221,022
121,405
140,057
Revenue reserve
15,717
14,572
20,791
Total shareholders' funds
514,503
439,467
449,522
Net asset value per ordinary share (note 5)
195.7p
156.8p
166.7p

1     Investments held at fair value through profit or loss are separately disclosed to those investments on loan via securities lending arrangements with no impact on the value of the investments.

2     These relate to CFDs.

CONDENSED STATEMENT OF CASH FLOWS

(Unaudited)
Six months ended
31st January
2026
£'000
(Unaudited)
Six months ended
31st January
2025
£'000
(Audited)
Year ended
31st July
2025
£'000
Cash flows from operating activities
Net return before finance costs and taxation
89,517
24,617
57,275
Adjustment for:
Net gains on investments held at fair value through profit or loss
(83,176)
(21,559)
(40,075)
Net gains on derivative financial instruments1
(97)
-
-
Foreign currency exchange (gains)/losses
(806)
902
(899)
Dividend income
(7,452)
(5,997)
(20,223)
Interest and stock lending income
(169)
(86)
(167)
Realised (losses)/gains on foreign currency exchange
transactions
(177)
87
60
Realised foreign currency exchange gains/(losses) on the
JPMorgan USD Liquidity Fund
139
124
(81)
Increase in other debtors
(1)
(28)
(11)
Decrease in accrued expenses
(14)
(19)
(4)
Net cash outflow from operating activities before dividends,
interest and taxation
(2,236)
(1,959)
(4,125)
Dividends received
7,025
7,382
19,567
Interest and stock lending income received
169
86
167
Overseas withholding tax recovered
-
55
55
Indian capital gains tax paid
(389)
(219)
(409)
Net cash inflow from operating activities
4,569
5,345
15,255
Purchases of investments
(72,931)
(56,417)
(115,590)
Sales of investments
93,385
72,700
149,340
Realised (losses) on settlement of derivative financial instruments1
(245)
-
-
Realised gains on settlement of derivative financial instruments1
179
-
-
Settlement of forward currency contracts
-
1
-
Net cash inflow from investing activities
20,388
16,284
33,750
Dividends paid
(10,911)
(9,789)
(15,298)
Repurchase of ordinary shares into Treasury
(11,524)
(12,687)
(26,892)
Repayment of loan
-
(31,935)
(31,935)
Drawdown of loan
-
31,870
31,870
Interest paid on loan
(892)
(1,027)
(1,989)
Interest paid on derivative financial instruments1
(5)
-
-
Net cash outflow from financing activities
(23,332)
(23,568)
(44,244)
Increase/(decrease) in cash and cash equivalents2
1,625
(1,939)
4,761
Cash and cash equivalents at start of period/year2
7,990
3,160
3,160
Foreign currency exchange movements
(233)
1
69
Cash and cash equivalents at end of period/year2
9,382
1,222
7,990
Cash and cash equivalents consist of2:
Cash at bank
268
343
1,723
Current asset investment in JPMorgan USD Liquidity Fund
9,114
879
6,267
Total
9,382
1,222
7,990

1     These relate to CFDs.

2     The term 'cash and cash equivalents' is used for the purposes of the Condensed Statement of Cash Flows.

NOTES TO THE CONDENSED FINANCIAL STATEMENTS

For the six months ended 31st January 2026.

1.  Condensed financial statements

The information contained within the condensed financial statements in this half year report has not been audited or reviewed by the Company's auditor and does not amount to full statutory accounts within the meaning of section 435 of the Companies Act 2006.                                                                                                          

The figures and financial information for the year ended 31st July 2025 are extracted from the latest published financial statements of the Company and do not constitute statutory accounts for that year. Those financial statements have been delivered to the Registrar of Companies and included the report of the auditor, which was unqualified and did not contain a statement under either section 498(2) or 498(3) of the Companies Act 2006.

2.  Accounting policies

The Company is a listed public limited company incorporated in England and Wales. The registered office is detailed in the full Half Year Report.

FRS 104, 'Interim Financial Reporting', issued by the Financial Reporting Council ('FRC'), has been applied in preparing this condensed set of financial statements for the six months ended 31st January 2026.

The condensed financial statements are under the historical cost convention, modified to include fixed asset investments at fair value, and in accordance with the Companies Act 2006, United Kingdom Generally Accepted Accounting Practice ('UK GAAP'), including FRS 102 'The Financial Reporting Standard applicable in the UK and Republic of Ireland' and with the Statement of Recommended Practice 'Financial Statements of Investment Trust Companies and Venture Capital Trusts' (the 'SORP') issued by the Association of Investment Companies in July 2022.

All of the Company's operations are of a continuing nature.

The Directors have a reasonable expectation that the Company has adequate resources to continue in operational existence for at least 12 months from the date of approval of these condensed financial statements. Accordingly, the Directors consider it appropriate to adopt the going concern basis of accounting in preparing these condensed financial statements. This conclusion takes into account the Director's assessment of the risks faced by the Company as detailed in the Interim Management Report in the full Half Year Report.

During the period ended 31st January 2026, the Company used Contracts for Difference (CFDs) as part of its derivative transactions. Under FRS 102, these derivatives are measured at fair value both initially and subsequently. The fair value of CFDs is determined by the difference between the initial contract price of the CFD and the value of the underlying shares which is based on the bid price, as per the investments accounting policy. Open CFD positions at the period end are shown at fair value in the Statement of Financial Position under current assets or liabilities. Gains and losses from CFDs are recognised in the capital column of the Statement of Comprehensive Income and shown under investing activities in the Condensed Statement of Cash Flows.

The Company holds long CFDs on equities, therefore it is entitled to receive a notional dividend on the underlying securities linked to the CFD. The notional dividends on CFDs are recognised as Income from derivative financial instruments and credited to the revenue column of the Statement of Comprehensive Income and shown under investing activities in the Condensed Statement of Cash Flows.

Interest paid on CFDs is recognised as a finance cost, in accordance with the allocation policy of the Company.

Except for the addition of accounting policies in respect of CFDs, applied to this condensed set of financial statements are consistent with those applied in the financial statements for the year ended 31st July 2025.

3.  Return per ordinary share

(Unaudited)
Six months ended
31st January 2026
£'000
(Unaudited)
Six months ended
31st January 2025
£'000
(Audited)
Year ended
31st July 2025
£'000
Return per ordinary share is based on the following:
Revenue return
5,837
4,245
15,973
Capital return
80,965
19,076
37,728
Total return
86,802
23,321
53,701
Weighted average number of ordinary shares in issue
during the year
265,472,380
286,897,860
280,885,971
Revenue return per ordinary share
2.20p
1.48p
5.69p
Capital return per ordinary share
30.50p
6.65p
13.43p
Total return per ordinary share
32.70p
8.13p
19.12p

 

4.  Dividends paid and declared

(Unaudited)
Six months ended
31st January 2026
(Unaudited)
Six months ended
31st January 2025
(Audited)
Year ended
31st July 2025
Pence
Pence
Pence
per share
£'000
per share
£'000
per share
£'000
Dividends paid
Fourth interim dividend in respect of prior year
2.60
6,968
2.40
6,930
2.40
6,930
First interim dividend
1.50
3,943
1.00
2,859
1.00
2,859
Second interim dividend
-
-
-
-
1.00
2,790
Third interim dividend
-
-
-
-
1.00
2,719
Total dividends paid in the period/year
4.10
10,911
3.40
9,789
5.40
15,298

All dividends paid and declared in the six months period to 31st January 2026 have been funded from the revenue reserve. All dividends paid for the previous periods ended 31st January 2025 and 31st July 2025 were funded from the revenue reserve.

A second interim dividend of 1.50p per share, amounting to £3,943,000 has been declared and will be paid on 24th April 2026 to shareholders on the register on the record date of 6th March 2026 in respect of the year ending 31st July 2026.

 

5. Net asset value per ordinary share

(Unaudited)
Six months ended
31st January 2026
(Unaudited)
Six months ended
31st January 2025
(Audited)
Year ended
31st July 2025
Net assets (£'000)
514,503
439,467
449,522
Number of ordinary shares in issue, excluding
shares held in Treasury
262,869,285
280,314,088
269,640,266
Net asset value per ordinary share
195.7p
156.8p
166.7p

 

6.  Fair valuation of investments

The fair value hierarchy disclosures required by FRS 102 are given below:

 

(Unaudited)Six months ended 31st January 2026
AssetsLiabilities
£'000£'000
(Unaudited)Six months ended 31st January 20251
AssetsLiabilities
£'000£'000
(Audited)Year ended 31st July 2025
AssetsLiabilities
£'000£'000
Level 1
535,065
-
471,044
-
472,054
-
Level 2 - JPMorgan USD Liquidity Fund
9,114
-
879
-
6,267
-
- Derivative financial instruments (long CFDs)
179
(16)
-
-
-
-
Total value of investments
544,358
(16)
471,923
-
478,321
-

1  The figures for 31st January 2025 have been restated to include the current asset investment in the JPMorgan USD Liquidity Fund as Level 2.

 

(Unaudited)Six months ended
(Unaudited)Six months ended
(Audited)Yearended
31st January 2026
31st January 2025
31st July 2025
Equity
Equity
Equity
InvestmentsTotal
InvestmentsTotal
Investments
Total
£'000£'000
£'000£'000
£'000
£'000
Level 31
Opening balance--
2626
26
26
Change in fair value of investment
during the year--
(26)(26)
(26)
(26)
Closing balance--
--
-
-

1  The Level 3 investment relates to the Company's holdings in the Russian stocks, listed on in the full Half Year Report.

As at 31st January 2026, the Company's holdings in the Russian stocks have been written down to nil due to the prolonged conflict with Ukraine and the sanctions imposed on Russia since 25th February 2022.

 

7.  Analysis of changes in net debt

As at 31st July
2025
£'000
Cash flows
£'000
Foreigncurrency
exchangemovements
£'000
As at 31st January
2026
£'000
Cash at bank and current asset investments
Cash at bank
Current asset investments1
1,723
6,267
(1,414)
3,039
(41)
(192)
268
9,114
7,990
1,625
(233)
9,382
Borrowings:
Debt due within one year
US$40 million revolving rate loan with ICBC - maturing November 2026
(30,226)
-
1,077
(29,149)
(30,226)
-
1,077
(29,149)
Net debt
(22,236)
1,625
844
(19,767)

1 JPMorgan USD Liquidity Fund, a AAA rated money market fund which seeks to achieve a return in line with prevailing money market rates whilst aiming to preserve capital consistent with such rates and to maintain a high degree of liquidity.

 

JPMORGAN FUNDS LIMITED

2nd April 2026

For further information, please contact:

Joel Clopon

For and on behalf of

JPMorgan Funds Limited

Telephone: 0800 20 40 20 or +44 1268 44 44 70

E-mail: jpmam.investment.trusts@jpmorgan.com

 

Neither the contents of the Company's website nor the contents of any website accessible from hyperlinks on the Company's website (or any other website) is incorporated into, or forms part of, this announcement.

ENDS 

A copy of the half year will be submitted to the National Storage Mechanism and will shortly be available for inspection at https://data.fca.org.uk/#/nsm/nationalstoragemechanism

The Half Year Report will also shortly be available on the Company's website at www.jpmorganemergingmarketsdividendincome.co.uk  where up to date information on the Company, including daily NAV and share prices, factsheets and portfolio information can also be found.

 

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