REG - JPMorgan Emerging MD - Half-year Financial Report
Today 07:00
For best results when printing this announcement, please click on link below:
https://newsfile.refinitiv.com/getnewsfile/v1/story?guid=urn:newsml:reuters.com:20260402:nRSB1488Za&default-theme=true
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
(http://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 assets(1) 20.2
Return to shareholders(2) 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) (Unaudited) (Audited)
Six months ended Six months ended Year ended
31st January 2026 31st January 2025 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
instruments(1) - 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 reserve(1) reserve(1) reserve(1) 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) (Unaudited) (Audited)
At At At
31st January 31st January 31st July
2026 2025(1) 2025(1)
£'000 £'000 £'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 loss(1) 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 assets(2) 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 liabilities(2) (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) (Unaudited) (Audited)
Six months ended Six months ended Year ended
31st January 31st January 31st July
2026 2025 2025
£'000 £'000 £'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 instruments(1) (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 instruments(1) (245) - -
Realised gains on settlement of derivative financial instruments(1) 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 instruments(1) (5) - -
Net cash outflow from financing activities (23,332) (23,568) (44,244)
Increase/(decrease) in cash and cash equivalents(2) 1,625 (1,939) 4,761
Cash and cash equivalents at start of period/year(2) 7,990 3,160 3,160
Foreign currency exchange movements (233) 1 69
Cash and cash equivalents at end of period/year(2) 9,382 1,222 7,990
Cash and cash equivalents consist of(2):
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) (Unaudited) (Audited)
Six months ended Six months ended Year ended
31st January 2026 31st January 2025 31st July 2025
£'000 £'000 £'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) (Unaudited) (Audited)
Six months ended Six months ended Year ended
31st January 2026 31st January 2025 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) (Unaudited) (Audited)
Six months ended Six months ended Year ended
31st January 2026 31st January 2025 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 (Unaudited) Six months ended 31st January 20251 (Audited) Year ended 31st July 2025
Assets Liabilities Assets Liabilities Assets Liabilities
£'000 £'000 £'000 £'000 £'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) Year ended
31st January 2026 31st January 2025 31st July 2025
Equity Equity Equity
Investments Total Investments Total Investments Total
£'000 £'000 £'000 £'000 £'000 £'000
Level 31
Opening
balance
- - 26 26 26 26
Change in fair value of investment
during the (26) (26) (26) (26)
year
- -
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 Foreign currency As at 31st January
2025 exchange movements 2026
£'000 Cash flows £'000 £'000
£'000
Cash at bank and current asset investments
Cash at bank 1,723 (1,414) (41) 268
Current asset investments1 6,267 3,039 (192) 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 (tel:+441268444470)
E-mail: jpmam.investment.trusts@jpmorgan.com
(mailto: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
(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
(http://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.
This information is provided by RNS, the news service of the London Stock Exchange. RNS is approved by the Financial Conduct Authority to act as a Primary Information Provider in the United Kingdom. Terms and conditions relating to the use and distribution of this information may apply. For further information, please contact
rns@lseg.com (mailto:rns@lseg.com)
or visit
www.rns.com (http://www.rns.com/)
.
RNS may use your IP address to confirm compliance with the terms and conditions, to analyse how you engage with the information contained in this communication, and to share such analysis on an anonymised basis with others as part of our commercial services. For further information about how RNS and the London Stock Exchange use the personal data you provide us, please see our
Privacy Policy (https://www.lseg.com/privacy-and-cookie-policy)
. END IR BRGDSUGGDGLB
Copyright 2019 Regulatory News Service, all rights reservedRecent news on JPMorgan Emerging Markets Dividend Income
See all newsREG - JPMorgan Inv. Trusts - Net Asset Value(s)
AnnouncementREG - JPMorgan Emerging MD - Net Asset Value(s)
AnnouncementREG - JPMorgan Emerging MD - Half-year Financial Report
AnnouncementREG - JPMorgan Emerging MD - Transaction in Own Shares
AnnouncementREG - JPMorgan Emerging MD - Net Asset Value(s)
Announcement