REG - JPMorgan Global E.M. - Annual Financial Report
07/11/2025 07:00
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RNS Number : 5747G JPMorgan Global Emerging Mkts I.T. 07 November 2025
LONDON STOCK EXCHANGE ANNOUNCEMENT
JPMORGAN GLOBAL EMERGING MARKETS INCOME TRUST PLC
FINAL RESULTS FOR THE YEAR ENDED 31ST JULY 2025
Legal Entity Identifier: 549300OPJXU72JMCYU09
Information disclosed in accordance with the DTR 4.1.3
JPMorgan Global Emerging Markets Income Trust plc ('JEMI' or the 'Company')
announces its financial results for the year ended 31st July 2025.
Highlights:
· NAV total return of +14.1% for the year ended 31st July 2025,
compared with +13.7% for the MSCI Emerging Markets Index with net dividends
reinvested (in Sterling terms) (the 'Benchmark'). Share price total return
of +16.8%.
· Three-year cumulative NAV total return: +32.4% compared with +24.1%
for the Benchmark. Share price total return of +38.6%.
· Five-year cumulative NAV total return: +57.2% compared with +29.0%
for the Benchmark. Share price total return of +60.5%.
· Ten-year cumulative NAV total return: +131.8% compared with +106.7%
for the Benchmark. Share price total return of +129.4%.
· Total dividend of 5.6p per ordinary share paid for the 2025
financial year, a 3.7% increase from the prior year (2024: 5.4p).
· Board intends to increase the FY2026 dividend compared to the FY2025,
targeting a growing dividend
· Board will continue to pay four interim dividends per year, but it
expects that these dividends will be more evenly distributed than has been the
case in the past. See further details in the Chair's Statement below.
· The Company bought back 20,042,322 ordinary shares into Treasury
during the financial year at a weighted average discount of 11.9%, adding
1.28p per share to the NAV.
Elisabeth Scott, Chair of the Board, commented: "I am pleased to report a year
of strong performance, with the Company's total return on net assets
outperforming the Benchmark's return. This out-performance is not limited to
the past financial year with the Company delivering cumulative returns ahead
of the Benchmark over 3, 5, and 10 years.'
'My fellow directors and I remain convinced of the investment case for
Emerging Markets. Their strong long-term growth prospects, favourable
demographics, generally improving fiscal positions and innovative,
entrepreneurial corporate cultures are all attractive features. The conviction
is further supported by the Investment Manager's long-term track record, which
has performed over the various and unusual challenges that have confronted
investors since the turn of the decade."
Omar Negyal, Portfolio Manager, commented: "There are a few different positive
drivers for Emerging Markets, all of which are to some extent now being
recognised by investors: the re-emergence of China as an attractive investment
destination, the importance of Emerging Markets companies in the technology
space and the potential for US dollar weakness.... this investment environment
is providing us with many interesting, varied and well-priced investment
opportunities. Our focus will remain on building a portfolio which gives
shareholders the opportunity to participate in Emerging Markets' exciting
growth story, while also providing them with an attractive yield."
CHAIR'S STATEMENT
Performance
The economic and market environment over the past 12 months has been
challenging for investors: geopolitical tensions have increased, almost all
asset classes have seen price volatility, and most recently, companies,
wherever they operate, have been affected by the uncertainty surrounding US
tariff policy.
Consequently, I am pleased to report that your Company has recorded a total
return on net assets of +14.1%, outperforming the Benchmark return of +13.7%.
The total return to shareholders (which includes both the share price return
and dividends) was +16.8%. This reflects a narrowing of the discount to net
asset value ('NAV') at which the Company's shares trade from 10.5% at the
previous financial year end to 8.8% at the end of the year.
The Investment Manager's Report, below, reviews the market environment and the
Company's performance over the reporting period in more detail. While Omar is
clear that his process is driven by stock selection, it is interesting to note
that this process has led the portfolio to be underweight India, where he
finds it difficult to find stocks that meet his dividend criteria, and
overweight Greece, where improving economic fundamentals have led to a
re-rating of some of the Greek banks where your Company has exposure. Overall,
it is pleasing to see that the Investment Manager's investment decisions have
created value for the Company.
It is satisfying to note that the Company's NAV total return over the three-
and five-year periods to 31st July 2025 and over longer periods has been
significantly ahead of the Benchmark. Against its peers, the Company's
performance over the long-term remains ahead of the peer group average.
Revenue and Dividends
The Company's gross revenue for the year amounted to £20.2 million (2024:
£21.2 million) with net revenue of £16.0 million (2024: £16.6 million). Net
revenue return per ordinary share for the year, calculated on the average
number of shares in issue, was 5.69p (2024: 5.64p).
During the financial year, the Board paid three interim dividends of 1.0p per
ordinary share, and on 3rd September 2025 it announced the payment of a
fourth interim dividend of 2.6p per ordinary share, which was paid on 17th
October 2025. This brings the total dividend for the financial year to 5.6p
per ordinary share, a 3.7% increase from the prior year (2024: 5.4p per
ordinary share). This dividend was fully covered by revenue generated during
the financial year and the Company was able to add a nominal sum to its
revenue reserves carried forward again this financial year. Revenue reserves
stood at £13.8 million after payment of the fourth quarterly interim
dividend, (2024: £13.2 million), which equates to approximately 90% of the
current annual dividend. These reserves provide the Company with the capacity
to support and smooth future dividend streams, should portfolio revenues in
any given year be insufficient to fund that year's dividend payments.
The Board reviews dividend receipts at each of our Board meetings, given their
importance to the Company. The Board carefully considers the outlook for
dividends with the Portfolio Managers, including a sensitivity analysis of the
impact of currency movements on revenue. 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 that 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 US dollars. Your Board and the Investment
Manager are of the view that such currency effects cancel themselves out over
time and that over the long term, Emerging Markets offer attractive income
prospects, alongside the prospects for strong earnings growth.
The Board pays four interim dividends, reflecting the support we have received
from shareholders for a regular and timely income stream.
The Board is aware of the importance of regular and attractive dividends to
our shareholders and is cognisant of the increased availability to investors
of other sources of income, particularly in the light of higher risk-free
rates, and the impact this is having on dividend policies of many investment
companies. Accordingly, it is the Board's intention to increase the absolute
level of dividend that it will pay in the current financial year, as compared
with FY2025, and thereafter to target a growing dividend, paid primarily out
of revenue earned in each financial year but topped-up using revenue reserves
or capital profits if required. The Board will continue to pay four interim
dividends per year, but it expects that these dividends will be more evenly
distributed than has been the case in the past, thus ensuring a more even
spread of dividends to shareholders throughout the year. The Board intends to
provide a further update when it declares the first interim dividend for the
current year, which is expected to be announced in late November 2025.
As stated above, the Board will continue to pay four interim dividends and is
therefore seeking shareholder authority to maintain this dividend payment
policy at the forthcoming Annual General Meeting.
Loan Facility and Gearing
Gearing is another distinguishing feature of investment trusts, which the
Board believes can be used to enhance long-term shareholder returns. Gearing
levels are discussed with the Portfolio Manager at each Board meeting.
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') for two years, with two
one-year extension options, subject to ICBC consent.
Gearing contributed 1.2% to your Company's total return over the financial
year.
As at 31st July 2025, portfolio gearing stood at 5.0% (2024: 6.1%).
Share Repurchases and Issuance
During the financial year to 31st July 2025, the Company's ordinary share
price traded at an average discount to net asset value of 12.1%. The Board
regularly considers the merits of buying back ordinary shares to manage the
level and volatility of the discount and will buy back ordinary shares if it
is considered to be in the best interests of shareholders to do so. As
ordinary shares are only bought back at a discount to the prevailing NAV,
share buybacks benefit shareholders as they increase the NAV per ordinary
share of remaining outstanding ordinary shares.
During the financial year, the Company bought back 20,042,322 ordinary shares
into Treasury for a total cost of £27,505,000 at a weighted average discount
of 11.9%. It did not issue any ordinary shares. These purchases were value
accretive for shareholders, increasing the NAV per ordinary share by 1.28p,
underscoring your Board's belief that there is attractive value in the
investments held by the Company.
At the forthcoming Annual General Meeting, the Board will seek a renewal of
shareholder authority to issue up to 10% of the Company's issued share capital
and to buy back up to 14.99% of its own ordinary shares. It is the Board's
intention to use the repurchase and allotment authorities to manage imbalances
between the supply and demand of the Company's ordinary shares, thus reducing
the volatility of the discount or premium, in normal market conditions, and
meet demand for the Company's ordinary shares as and when they trade at an
appropriate premium to NAV.
The Board will continue to actively manage the Company's discount in 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, and with the aim of enhancing NAV for shareholders. Between the
end of the financial year and 6th November 2025, the Company has bought back
an additional 4,584,528 ordinary shares into Treasury. At the time of writing,
the discount stands at 9.4%.
Introduction of Conditional Tender Mechanism
In the Company's Half Year Report, the Board announced the introduction of a
five-year performance-based conditional tender offer with effect from 1st
August 2025 (the 'Tender Offer'). Should the tender be triggered, it would
provide shareholders with the opportunity to redeem a portion of their
ordinary shares at a price close to the NAV.
The Tender Offer would be made to shareholders for up to 25% of the Company's
issued share capital (excluding ordinary shares held in Treasury) at the time,
at a price equal to a 2% discount to the prevailing NAV (less the associated
costs), in the event that the Company's audited NAV total return does not
exceed the total return of the Company's Benchmark on a cumulative basis over
the five years from 1st August 2025. The Company is required to pay capital
gains tax ('CGT') on disposals of Indian securities, whereas the Benchmark
does not incur such tax liabilities. As a result, including CGT on Indian
stocks would create an inconsistency between the Company's actual performance
and the Benchmark's returns. The Tender Offer will therefore be based on the
Company's outperformance of the Benchmark, with the calculation adjusted to
exclude CGT paid on Indian stocks, thus ensuring a fair and accurate
comparison of relative performance.
The Tender Offer is contingent on the Company having the required shareholder
approval at the relevant time, and also on the passing of the Company's
existing three-year continuation vote at its Annual General Meetings in both
2027 and 2030. It should be noted that the Company successfully passed its
last continuation vote at the 2024 Annual General Meeting, with 99.5% of votes
cast in favour.
It should be further noted that the Company has outperformed the Benchmark
over the longer-term, as referenced in the full annual report. The
introduction of the Tender Offer will not change the Board's current approach
to discount management, nor will it affect the investment process, strategy,
and management of the portfolio.
Corporate Governance
The Board recognises the importance of diversity in the Boardroom and is
pleased to confirm that the Company meets the targets set out in the UK
Listing Rules for diversity and inclusion.
The Board supports the annual reappointment for all Directors, as recommended
by the Association of Investment Companies Code of Corporate Governance.
Therefore, all Directors will stand for reappointment at the forthcoming
Annual General Meeting.
Portfolio Managers
Omar Negyal has managed the portfolio since 2012 and manages the assets of the
Company with the support of the Investment Manager's extensive team of
research analysts across Global Emerging Markets. Recruitment efforts to
replace former Portfolio Manager Isaac Thong, who left JPMorgan earlier this
year, continue. An update will be provided in due course.
Manager
Through the Management Engagement Committee, the Board has evaluated the
Manager's performance, including that of the Investment Manager, and its fee
arrangements with the Company. In view of the Company's long-term performance
record and the quality of the additional services that the Manager provides to
the Company, the Board is confident that JPMF should continue as the Company's
Manager, with its ongoing appointment considered to be in the best interests
of the shareholders.
Annual General Meeting
The Company's Annual General Meeting ('AGM') will be held at 60 Victoria
Embankment, London, EC4Y 0JP on Thursday, 18th December 2025 at 2.00 p.m.
Full details of the format and explanations of the business proposed at the
AGM can be found in the Notice of Annual General Meeting in the full Annual
Report. Portfolio Manager Omar Negyal will give a presentation to shareholders
on recent performance and his view on the outlook for Emerging Markets. The
meeting will be followed by afternoon tea, which will provide shareholders
with an opportunity to meet Omar, as well as my fellow Board members and I.
We are delighted to invite shareholders to join us in person for the Company's
AGM. However, those Shareholders wishing to follow the AGM proceedings without
attending in person will be able to view them live and ask questions (but not
vote) through conferencing software. Details on how to register, together with
access details, will be available shortly on the Company's website at
www.jpmglobalemergingmarketsincome.co.uk or by contacting the Company
Secretary at jpmam.investment.trusts@jpmorgan.com.
As is best practice, all voting on the resolutions will be conducted via a
poll. Shareholders who are unable to attend the AGM in person are strongly
encouraged to submit their proxy votes in advance of the meeting, so that they
are registered and recorded at the AGM. Proxy votes can be lodged in advance
of the AGM either by post or electronically: detailed instructions are
included in the notes to the Notice of Meeting.
Shareholders are encouraged to send any questions ahead of the AGM to the
Board via the Company Secretary at the email address above. We will endeavour
to answer relevant questions at the meeting or via the Company's website. My
fellow Board members, representatives of the Manager, and I, look forward to
the opportunity to meet and speak with shareholders after the formalities of
the meeting have been concluded. We would also welcome comments and questions
from shareholders throughout the year - please use the same contact details as
above.
If there are any changes to the above AGM arrangements, the Company will
update shareholders through an announcement to the London Stock Exchange and
on the Company's website.
Stay Informed
The Board would like to ensure that all shareholders are kept well-informed,
and to this end 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 on the contents
page in the full Annual Report.
Outlook
My fellow directors and I remain convinced of the investment case for Emerging
Markets. Their strong long-term growth prospects, favourable demographics,
generally improving fiscal positions and innovative, entrepreneurial corporate
cultures are all attractive features. At a time of escalating global trade
tensions, it is reassuring to remind ourselves that the domestic focus of many
Emerging Markets companies means they are less vulnerable to the detrimental
effects of tariffs than companies reliant on exports. The potential gains from
Emerging Markets remain significant, especially for those investors willing to
take a long-term view and tolerate some volatility along the way.
Such gains will be enhanced by the roll-out of the AI revolution, which holds
huge potential to support tech and AI-related stocks across, including those
in Emerging Markets, over the foreseeable future. Tech companies in Taiwan,
South Korea and China, are integral to global AI supply chains and can look
forward to rapid growth accordingly. Many other sectors are likely to benefit
from the productivity gains AI promises to deliver over the longer term.
At the country level, it is encouraging to see the recovery in the Chinese
market gathering momentum, thanks in part to buying by domestic insurers and
retail investors rotating out of domestic bonds. With valuations in this
market still relatively low and shareholder returns improving, there is scope
for further recovery in Chinese stocks, especially if domestic spending
strengthens. Elsewhere, India, one of the largest and most vibrant, but
notoriously expensive, Emerging Markets, is now looking more attractive after
its recent pull back, while Greece's recent sovereign rating upgrade serves as
a reminder of the rewards for years of painful restructuring.
My fellow directors and I are reassured by the Investment Manager's long-term
track record, which amply demonstrates the team's capacity to navigate the
various and unusual challenges that have confronted investors since the turn
of the decade. The Company's investment process is clearly robust and
resilient, and benefits from the Investment Manager's deep and extensive
Emerging Markets research resources. The Board therefore remains confident in
your Company's ability to continue providing shareholders with exposure to the
exciting opportunities offered by Emerging Markets and we welcome the
Portfolio Managers' efforts to take advantage of market dips to grasp these
opportunities at attractive prices. Stock by stock, they continue to build on
the Company's track record of delivering attractive long-term returns and
dividend income 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
6th November 2025
INVESTMENT MANAGER'S REPORT
For the year ended 31st July 2025, the Company's total return on net assets,
including dividends, was +14.1%. This compares favourably with our Benchmark,
with dividends reinvested, which returned +13.7%. The return to shareholders,
including dividends, was +16.8%. Over the three-, five-, and ten-year periods
ended 31st July 2025, the Company made annualised returns of +9.8%, +9.5% and
+8.8% respectively in NAV terms, comfortably ahead of corresponding Benchmark
annualised returns of +7.5%, +5.2% and +7.5%.
Investment Environment
Emerging Market ('EM') assets faced a volatile backdrop over the past 12
months, characterised by episodes of weakness driven by US policy uncertainty.
However, this volatility did not prevent some markets from realising
significant gains over the year, buoyed by selective fiscal and monetary
easing, an improving inflation profile in several regions, and signs of
a technology-led recovery in China.
Over the past year, investors were most focused on geopolitical developments.
US tariff negotiations and fears of a global trade war had the most marked
adverse impact on global markets, although a sharp drop in April was reversed
when the US delayed threatened tariff hikes pending further negotiations. The
associated easing in investors' anxieties was manifested most clearly in
renewed strength in US technology stocks perceived to be the biggest
beneficiaries of artificial intelligence ('AI'). Investors responded
positively to US technology companies' plans to increase capital expenditure
to build out their AI capabilities.
However, ongoing concerns that US tariffs would place upward pressure on US
inflation and possibly trigger recession, allied with other developments,
including the President's attempts to pressure the US Federal Reserve to cut
interest rates and influence monthly jobs data, undermined investor confidence
in US assets, including the US dollar, which weakened over the review period.
A lower dollar eases debt servicing burdens for EM economies with significant
dollar-denominated debt and gives EM central banks more policy flexibility - a
welcome development given the disinflationary pressures in many EM countries.
Asian and other Emerging Markets have been the beneficiaries of significant
capital inflows, as investors rotate out of US assets.
Developments across the major EM countries were mixed. In China, market
sentiment improved in the fourth quarter of 2024 after Beijing unveiled
incremental fiscal measures and targeted stimulus, which triggered a sharp
rally and attracted global investors toward still-cheap valuations. In
addition, the launch of China's Deep Seek AI platform, and the subsequent
increase in investment in cloud subscriptions and semiconductors, has sparked
widespread interest in China's role in the development of AI. This interest,
along with the US tech hyperscalers' (e.g. Amazon, Google, Microsoft) plans to
develop their AI capabilities, supported the share price of Taiwanese and
Korean companies playing a major role in the global AI supply-chain.
Conversely, Indian stocks experienced downward pressure. Investors rotated
away from this market for several reasons including premium valuations and
softer earnings. Growth has also slowed slightly due to weaker manufacturing
output, elevated food inflation, and more muted urban consumption.
Performance attribution
for the year ended 31st July 2025 % %
Contributions to total returns
Benchmark total return 13.7
Asset allocation(1) 2.7
Stock selection(1) (3.0)
Gearing/cash 1.2
Investment Manager contribution 0.9
Portfolio total return 14.6
Management fees and other expenses (1.0)
Impact of provision for capital gains tax 0.1
Impact of finance costs (0.5)
Share buy-backs 0.9
Other effects (0.5)
Return on net assets(2) 14.1
Return to shareholders(3) 16.8
Source: J.P,Morgan/Morningstar. All figures are on a total return basis.
1 Based on Country allocation.
2 Based on the cum income net asset value per ordinary share (net of
all fees and expenses), including dividends reinvested.
3 Based on share price, including dividends reinvested.
Performance attribution analyses how the Company achieved its recorded
performance relative to its Benchmark.
A glossary of terms and APMs is provided in the full Annual Report.
Performance Drivers
Country contributors:
Top six contributors Top six detractors
1. India 1. China
2. Greece 2. Indonesia
3. Taiwan 3. South Korea
4. Thailand 4. United Arab Emirates
5. Saudi Arabia 5. South Africa
6. Turkey 6. Peru
At the country level, our longstanding underweight in India was the most
positive relative contributor over the year to 31st July 2025, thanks to both
good asset allocation decisions and strong stock selection. The Indian market
performed well in the first four years of this decade, but we maintained our
underweight position as we perceived valuations to be expensive despite the
country's strong growth outlook. It is also difficult to find Indian stocks
offering an attractive yield, and we typically found better value
opportunities elsewhere. This underweight detracted from returns in recent
years, but our caution about the Indian market began to pay off over the past
year as growth slowed and investors came to share our concerns about
valuations.
Our overweight to Greece was the second largest contributor to returns at the
country level. Greece's outperformance was fuelled by robust macroeconomic
fundamentals, thanks to resilient private consumption, a record primary fiscal
surplus, and a decline in public debt to GDP. The decision by the three major
credit rating agencies to upgrade Greece's sovereign debt rating to investment
grade was a clear signal of confidence in Greece's longer-term structural
transformation. A more modest overweight to Taiwan also contributed to
performance, thanks to positive sentiment about AI, which boosted our
investments in Taiwanese tech companies such as Taiwan Semiconductor
Manufacturing Company ('TSMC'), Wiwynn and Quanta Computer.
By far the most significant detractor from performance over the review period
was our stock selection in China. In contrast to recent previous years, lower
yielding stocks led the market as investor sentiment improved towards more
growth-oriented companies. This was less about overall economic growth but
rather a narrower focus on technology and AI companies, an area in China to
which we generally have little exposure due to high valuations and lack of
dividends. Our purchases in 2024 of new stocks such as Tencent and Alibaba was
somewhat helpful in this regard. These companies improved their shareholder
return and dividend policies which was a positive signal for us; the stocks
subsequently performed well as they rerated on the back of better
tech/AI-driven earnings. In hindsight our mistake here was not to buy bigger
positions, something we can attribute to these being new stocks for the
portfolio but still an opportunity cost over the last year.
Our overweight to Indonesia detracted, due to unfavourable macroeconomic
crosscurrents fuelled by high real interest rates, rupiah instability, and
policy uncertainty. Stock-specific earnings disappointments from Indonesia's
major banks, consumer names and selected infrastructure plays also hurt
relative returns in this market. Stock selection in South Korea had a more
modest adverse impact, due in part to our underweight to a number of popular
AI-exposed stocks which offer low yields and thus fall outside our investment
universe. Furthermore, the increased global focus on defence spending saw a
re-rating of many Korean names within defence supply chains and our
underweight to these stocks also detracted.
Stock contributors:
Top five contributors Top five detractors
1. National Bank of Greece 1. Xiaomi
2. China Merchants Bank 2. Bank Rakyat
3. Reliance Industries (not owned) 3. Bank Mandiri
4. NetEase 4. Tencent
5. OPAP 5. Walmart de Mexico
At the stock level, the biggest contributor was National Bank of Greece
('NBG'), a recent acquisition which performed well, fulfilling our
expectations about its turnaround efforts. After more than a decade of
painful restructuring to overcome the impact of Greece's sovereign debt
crisis, Greek banks have repaired their operations. NBG is one of the highest
quality Greek banks, boasting a large deposit base and best in class capital
ratios that provide ample room for higher dividend payments in the future.
Following the upgrade of Greece's sovereign debt rating, discussed above, NBG
regained its investment-grade status from all three credit rating agencies and
resumed dividends after a 16-year hiatus. The positive performance of the
Greek market also provided tailwinds for OPAP, a lottery and gaming company
operating in Greece and Cyprus. The company has performed well thanks to its
successful digital upgrades, which complement its retail product revamps,
fuelling both volume and engagement. We also like the company's attractive
dividend policy and history of returning a large proportion of its earnings to
shareholders in dividends and buybacks.
China Merchants Bank ('CMB'), a Chinese regional bank, also had a favourable
impact on returns. In an environment of very low Chinese bond yields,
investors have started to view Chinese banks as a stable dividend paying
asset and mainland bank stocks re-rated thanks to a surge in investor
interest. CMB was a large beneficiary of these flows, thanks to its position
as one of the highest quality players in the sector. It continued to outgrow
peers on core metrics, while its non-performing loan ('NPL') ratio remained
among the lowest in the sector.
Our decision not to own Reliance Industries also enhanced performance. This
Indian-based conglomerate has multiple business lines including oil and
energy, retail, telecommunications, and media. Its share price lagged due to
faltering earnings momentum following a sharp downturn in its legacy
Oil-to-Chemicals ('O2C') business, which outweighed solid growth in other
segments. At the same time, sustained heavy capital expenditure limited the
company's free-cash-flow. We have avoided this company as it does not pay
sufficient dividends to satisfy our investment criteria.
Chinese electronic gaming and multi-media company NetEase was another good
performer. Its sustained pipeline of successful game launches and robust
legacy titles saw earnings exceed expectations. Solid guidance for growth and
sector-leading net margins have boosted investor confidence in the company. We
are also optimistic about the company's prospects based on its solid R&D
capabilities, global intellectual property collaboration and superior content
updates, all of which should ensure it continues to perform well domestically,
while gaining market share abroad.
On the downside, our underweight to two Chinese names detracted. Xiaomi, a
consumer electronics producer, which executed well in both its core
smart-phone business and its disruptive electric vehicle ('EV') segment.
However, this stock falls outside our investment universe due to its failure
to pay dividends. Our average underweight in Tencent, an internet content and
information platform, also detracted. As discussed above, our decision to buy
a position in the stock was well timed and positive but we have been slow to
build our position in this and other names in the Chinese internet space, as
it is a relatively new area for the Company. The company performed well over
the past year, delivering consistent earnings surprises across multiple
quarters, driven by better-than-expected gaming revenue, AI-powered
advertising, and a broad-based recovery in its cloud business.
Our positions in two Indonesian banks were also negative for performance. Bank
Rakyat came under persistent earnings pressure due to elevated credit costs
and a deterioration in the quality of its micro loan book, which led to a
spike in NPLs. In response, the bank scaled back its expansion plans in this
segment and revamped its underwriting policies, but it will take time for
these measures to take effect. In the meantime, we expect the bank to maintain
an acceptable profitability profile and distribute excess capital to
shareholders. We also like the business's resilience, demonstrated by its
ability to achieve a mid- to high-teens return on equity even during its
recent difficulties. Concerns about asset quality also dogged Bank Mandiri. It
has been aggressively growing loans in the last few years, making it
vulnerable to the deterioration in Indonesia's macro environment. To compound
its challenges, operational performance has been constrained by both higher
funding costs and softening lending rates. We still like the Indonesian
banking sector though need to think carefully about how best to position
within it, considering some of these stock-specific challenges.
The other notable detractor from returns was Walmart de Mexico ('Walmex'), a
food, clothing, and general merchandise retailer, which underperformed due to
domestic macroeconomic headwinds and competitive pressures. Strategic
investments in infrastructure and increasing staff wages also increased
operating expenses, compressing margins despite modest sales growth.
Nonetheless, we continue to like this company as we expect growth rates to
recover once the economy improves, and the investments Walmex is currently
making in its product range, customer experience and value for money begin to
pay off. We added to our position on share price weakness.
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 Staples, and Consumer Discretionary, while historically, the
portfolio is usually underweight in Basic Materials, Industrials, and
Healthcare. A noteworthy change in sector tilt has been in Information
Technology. This has been an area where we have had a successful multi-year
overweight but are now modestly underweight. Certainly, we think there are
many positives from AI trends, but we also recognise that valuations in
aggregate have risen, hence a more cautious stance currently.
At the country level, significant portfolio overweights include Indonesia,
Greece, 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, our largest
country underweight is India. India's long-term growth prospects are very
positive and investor interest in this market is high. However, this is
reflected in sometime extreme valuations, which makes it difficult for us to
find attractive income paying stocks.
The portfolio changes we implemented over the past year were mainly motivated
by individual stock considerations. In addition to our purchase of NBG,
discussed above, we saw the emergence of several opportunities which led to
new positions, including in Alibaba, a leading Chinese internet company which
paid an inaugural dividend in late 2023 and became much more attractive to us
on this basis. It has operations in cloud computing and software, which have
attracted significant recent interest following the release of Alibaba's own
AI model, which it claims surpasses the capabilities of the much-lauded
DeepSeek. Investor enthusiasm regarding Alibaba's cloud business expanded
valuations, so we subsequently trimmed slightly into this strength.
We also opened positions in Indian commercial real estate REITs. These offer
attractive yields and market fundamentals are improving thanks to a key
structural trend. India's highly educated and cost-efficient workforce is
encouraging multi-national corporations to open office space within the
country, raising occupancy rates and lifting leasing rates to record levels.
Our exposure to India was further increased by our acquisition of Power Grid,
an electricity supplier, and Maruti Suzuki, an auto manufacturer, following
their de-rating over the past year. Lastly, we purchased China's CATL, the
global leader in lithium-ion batteries for EVs and energy storage systems,
which retains competitive advantages from its economies of scale and solid
R&D capabilities.
We also took advantage of more attractive valuations to add to several
existing positions across markets and sectors, including Indonesian
financials, Bank Rakyat and Bank Mandiri, two of the largest banks in the
country, and Walmex, all mentioned above. In each of these cases, we responded
to valuation, yield and fundamental signals provided by our investment
process. Conversely, we reduced positions where we thought valuations were
beginning to look relatively stretched. For example, we trimmed Indian IT
service names including Infosys, Tata Consultancy Services and
HCL Technology. These companies remain interesting investments given the
long-term prospects for outsourcing business processes and software
development, although we will continue to monitor the impact of AI on these
businesses when considering their potential risk/reward outcomes.
One notable outright sale over the past year was the closure of our position
in Novatek Microelectronics ('Novatek'), a Taiwanese semiconductor
manufacturer. This company is a world leader in the production of display
driver IC ('DDIC'), specialist chips which act as the interface between
microprocessors and display panels. This stock has done well for the portfolio
over several years and we rotated into more attractive opportunities
elsewhere. Novatek is a good example of a successful investment, and we would
consider re-opening a position in the future if expectations for the company,
or its valuation, look more attractive.
Dividends
The portfolio continues to demonstrate a strong ability to generate dividends.
We think it is important that the Company's long term dividend trajectory is
well supported by underlying dividend receipts. Top dividend contributors in
the financial year included OPAP (Greek gaming), TISCO (Thai financial) and
Bank Rakyat (Indonesian financial).
Analysing companies' dividend policies is a key pillar in our process: we are
not just interested in the yield today but the resilience of the dividend on a
multi-year basis and the potential for long term growth. On this front we are
reassured that our portfolio companies have been delivering as expected.
Payout ratios vary across the portfolio but our portfolio companies distribute
approximately half their earnings out as dividends each year; the retained
other half can then be reinvested back into their businesses for the future.
In the near term we should be mindful that US tariffs could have a negative
effect on earnings and dividends from portfolio companies. There remains
uncertainty in terms of levels and the extent of application but those
companies with significant exposure to the US export market will need to deal
with this issue.
Our Engagement on Environmental, Social and Governance
Financially material environmental, social and governance ('ESG')
considerations are a part of our investment process (please see the dedicated
section in the full Annual Report).
Examples of recent ESG engagement with portfolio companies can be seen in the
full Annual Report.
Outlook
There are a few different positive drivers for EM, all of which are to some
extent now being recognised by investors: the re-emergence of China as an
attractive investment destination, the importance of EM companies in the
technology space and the potential for US dollar weakness.
Taking these in turn: in recent years there was increasing scepticism towards
Chinese equities due to concerns around the property cycle, government
interference and general profitability headwinds. We took a more positive view
based on lower valuations and improving shareholder returns from Chinese
companies (i.e. more dividends and buybacks) and found multiple stock
opportunities in a weak market. This allowed us to generate positive
performance from China during a tough period for the market. Over the last
year, sentiment towards China has improved significantly, partly helped by the
release of the Deepseek AI model, showing that innovation is still very much a
feature for Chinese companies. In the short term there are some signs that
sentiment has swung from extreme lows to extreme highs, which we need to be
wary of. However, longer term we continue to see the market as offering
attractive dividend opportunities.
On the technology front, EM companies play a vital role in global supply
chains for semiconductors and technology manufacturing which could continue to
be a positive driver for earnings in the long term. Similarly to China, we
should be careful around positioning considering that sentiment here is
relatively buoyant, but our structural view is a positive one.
Finally, the US dollar's recent weakness bodes well for all EM markets.
Historical analysis suggests that when the US dollar is weak, EM equities tend
to outperform relative to global equities. There is a sense that after many
years of 'US exceptionalism', investors are looking to rebalance somewhat,
which would limit upside for the US dollar.
Another risk we should be mindful of is the impact from US tariffs. We can
think of these as increasing friction into global trading relationships.
Markets have shrugged the impact off so far, but we will watch carefully in
terms of its consequences on companies' earnings and dividends.
This investment environment is providing us with many interesting, varied and
well-priced investment opportunities across Emerging Markets. Our focus will
remain on building a portfolio which gives shareholders the opportunity to
participate in Emerging Markets' exciting growth story, while also providing
them with an attractive yield.
Omar Negyal
Portfolio Manager
JPMorgan Asset Management
6th November 2025
PRINCIPAL RISKS AND UNCERTAINTIES
The Board has overall responsibility for reviewing the effectiveness of the
Company's system of risk management
and internal control. The Board is supported by the Audit and Risk Committee
in the management of risk. The risk management process is designed to
identify, evaluate, manage, and mitigate the significant risks that the
Company faces. Whilst the Board believes that it has a robust framework of
internal controls in place, this can provide only reasonable, and not
absolute, assurance against material financial misstatement or loss and is
designed to manage, not eliminate, risk.
In order to monitor and manage risks facing the Company, with the assistance
of the Manager, the Audit and Risk Committee maintains a risk matrix, which,
as part of the risk management and internal controls process, details the
principal and emerging risks that have been identified to face the Company at
any given time, together with measures put in place to monitor, manage or
mitigate against them as far as practicable. The Audit and Risk Committee
considers the Company's risk matrix at each meeting, and holds a third meeting
each year dedicated to a thorough review of the risk matrix.
The risk matrix sets out the risk, which is then rated by the likelihood of
occurrence and possible severity of impact, together with the mitigations in
place. The Directors, through the Audit and Risk Committee, confirm that they
have carried out a robust assessment of the principal and emerging risks
facing the Company, including those that would threaten its business model,
future performance, solvency or liquidity.
The Audit and Risk Committee conducted a thorough review of the risk matrix
during the year to ensure that there is a clear focus on the principal and
emerging risks facing the Company. This has resulted in the reporting of
foreign currency risk as a separate risk. In addition, Artificial Intelligence
has been reclassified from an Emerging Risk to a Principal Risk this year.
The principal and emerging risks, along with the financial risks detailed in
note 22 to the financial statements, facing the Company, how they have changed
during the year, the mitigating activities in place, and how the Board,
through the Audit and Risk Committee, aims to manage or mitigate these risks
are set out below.
An upwards arrow, stable or downwards arrow has been included to show if the
risk level has heightened, remained stable or reduced since it was reported in
last year's Annual Report and Financial Statements.
Change in risk status
Principal risk Description Mitigating activities during the year
Investment performance Inappropriate investment decisions, for example poor stock selection or asset The Board manages this risk by diversification of investments through its áâ
allocation may lead to underperformance against the Company's Benchmark index investment restrictions and guidelines, which are monitored and reported by
and peer companies. the Manager. The Investment Manager provides the Directors with timely and The Audit and Risk Committee's assessment of this risk remains stable, and
accurate management information, including performance data and attribution unchanged from the previous year. The Company continued to pursue its
analyses, revenue estimates, currency performance, liquidity reports and peer investment objective in accordance with the agreed strategy.
group analyses.
The Board continued to monitor the performance of the portfolio over the
The Board monitors the implementation and results of the investment process financial year, which it noted outperformed the Benchmark. Furthermore, the
with the Portfolio Manager, who attends Board meetings, and reviews data which Board takes comfort from the Company's strong longer-term performance.
show statistical measures of the Company's risk profile.
The Board holds a separate meeting devoted to strategy each year.
Income There is the risk that the Company may underperform resulting in insufficient The Investment Manager has an investment process which is designed to maximise áâ
local currency generation, reducing the income available to pay dividends to the performance of the portfolio in meeting the investment objective and
shareholders. delivery of income. The Board regularly reviews investment and financial The Audit and Risk Committee's assessment of this risk remains stable, and
reports, including revenue estimates. unchanged from the previous year. Whilst macroeconomic conditions have been
challenging, the Company continued to generate income, outperforming the
Benchmark.
Given the level of income, the Board has increased the dividend for the
financial year, which was wholly funded by the revenue earned in the year.
Strategy If the Company's business objective and strategy is no longer appropriate or The Board holds a separate meeting devoted to strategy each year. áâ
there is increased competition from alternative investment products, it may
lead to a lack of investor demand. This may result in the Company's shares The Board seeks to narrow the discount by undertaking measured buybacks of the The Audit and Risk Committee's assessment of this risk remains stable, and
trading at a wide discount to net asset value to that which is acceptable. Company's shares. The Company has authority to buy back its existing ordinary unchanged from the previous year.
shares to enhance the NAV per ordinary share for its shareholders and to
A widening discount out of line with the industry may lead to hostile action reduce the absolute level of discount and discount volatility. The Board continued to monitor the performance of the portfolio over the
by shareholders or arbitrageurs.
financial year. The total return on NAV for the year was ahead of the
The Company and Manager work with the Corporate Broker to seek to increase Benchmark. Over the longer term, the Company continues to provide good
An inappropriate gearing strategy may lead to suboptimal returns; poor demand for the Company's ordinary shares. investment performance, outperforming the Benchmark. Solid performance should
performance if over-geared in weak markets or performance foregone if
improve the Company's share price.
under-geared in strong markets. The Board has set a gearing range within which the Investment Managers employ
the Company's gearing on a strategic basis. Gearing levels are detailed in the The Board continued to undertake buybacks of the Company's own shares during
monthly investment restrictions and guidelines report provided to the Board the year. The Company's discount has slightly narrowed over the financial year
and the level of gearing is discussed at each Board meeting. as a result of these buybacks, detailed above.
Foreign currency Currency movements may affect the performance of the Company. Weakness in The Investment Manager does not hedge currency risk. The Board reviews the áâ
foreign exchange rates could result in sharp declines in asset values and impact on income of movements in major currencies and considers sensitivity
sterling available for dividends. analysis of major currency changes. This risk has been reported as a separate risk this year. The Audit and Risk
Committee's assessment of this risk is that it remained stable during the
year.
Political and Economic The Company's returns, both capital and revenue, are affected by changes in This risk is managed to some extent by diversification of investments both by áâ
economic, political and corporate conditions, which can cause market and geography and sector, and by regular communication with the Investment Manager
exchange rate fluctuations. Sustained underperformance of Emerging Markets as on matters of investment strategy and portfolio construction which will The Audit and Risk Committee's assessment of this risk remains heightened, and
an asset class may result from risks such as the imposition of restrictions on directly or indirectly include an assessment of these risks. therefore unchanged from the previous year.
the free movement of capital, ability to pay corporate dividends and change in
legislation. The Board receives regular reports from the Manager and Corporate Broker Political and economic risks have always been a factor in the risk of
regarding market outlook and considers thematic and factor risks, stock investing in equities. The risk remains heightened to reflect the United
Economic, political and military conflicts are an ever present reality. So too selection and levels of gearing on a regular basis. States implementation of widespread tariffs on imports; the continuing war
are the risks of social dislocation or civil unrest within countries. These between Russia and Ukraine; the military tensions over the Taiwan Strait; and
bring with them risks to economic growth, to investors' risk appetites and, the continuing conflict between Israel and Hamas, all which are impacting
consequently, to the valuations and distributions of companies in the global markets, investment sentiment and economic stability.
portfolio.
Financial The financial risks faced by the Company include market price risk, interest The Board reviews regularly and discusses the portfolio and its performance áâ
rate risk, liquidity risk and credit risk. with the Portfolio Manager, which can be impacted by financial risks. Further
details are disclosed in note 22 in the full Annual Report. The Audit and Risk Committee's assessment of this risk remains stable, and
unchanged from the previous year.
The portfolio remained diversified across geographies and sectors, reducing
the exposure to any single market movement.
The Company refinanced its debt during the year. The new debt facility has
flexibility over the amount that can be drawn and its duration. The Company
continued to meet its debt covenants over the financial year. The Company
remained invested in a relatively liquid equity portfolio capable of being
realised to generate liquidity if required.
Environmental, Social and Governance The Board acknowledges that there are risks associated with investments in The Manager has integrated the consideration of financially material ESG áâ
companies which fail to conduct business in a responsible manner. Insufficient factors into the Company's investment process. Further details are set out in
consideration given to financially material ESG factors may lead to poor the full Annual Report. The Audit and Risk Committee's assessment of this risk remains stable, and
performance, and a reduction in demand for the Company's shares as investors unchanged from the previous year.
seek greater ESG oversight in their portfolios.
The Board is comfortable that the Investment Manager has integrated
Climate change may have a disruptive effect on the business models and financially material ESG considerations into its investment process, please
profitability of individual investee companies, and indeed, whole sectors. see further details in the full Annual Report
Artificial Intelligence Artificial Intelligence ('AI') has become a powerful tool that will impact a The Board will work with the Manager to monitor the developments concerning AI áâ
huge range of areas. The pace of AI and its adoption could, and most likely and its potential impact on the portfolio, the Company's service providers
will, impact how portfolio companies transform and evolve their business
This is a new risk having been reclassified from an Emerging Risk in last
models. It could also act as a disrupter to current business models and and the wider market. year's report to a Principal Risk.
processes leading to emerging uncertainty in corporate valuations.
The Audit and Risk Committee's assessment of the risk is that it remained
stable during the year.
Accounting, Legal and Regulatory Loss of its investment trust status and, as a consequence, gains within the The Section 1158 qualification criteria are continuously monitored by the áâ
Company's portfolio could be subject to UK Capital Gains Tax. Manager and the results reported to the Board at each Board meeting.
The Audit and Risk Committee's assessment of this risk remains stable, and
A breach of the UK Companies Act 2006 could result in the Company and/or the The Board relies on the services of its Company Secretary, the Manager and unchanged from the previous year.
Directors being fined or the subject of criminal proceedings. its professional advisers to ensure compliance with the UK Companies Act
2006, the Listing Rules, DTRs and the Alternative Investment Fund Managers' The Board is comfortable that the Manager continuously monitors the Company's
Breach of the UK Listing Rules or Disclosure, Guidance and Transparency Rules Directive. compliance with the Section 1158 qualification criteria.
('DTRs') could result in the Company's shares being suspended from listing
which in turn would breach Section 1158 of the Corporation Tax Act 2010.
Operational and cybercrime The Company is dependent on third parties for the provision of services and The Board regularly monitors the services provided by the Manager, its áâ
systems. Disruption to, or failure of, the Manager's accounting, dealing or associates and third-party service providers. The key elements designed to
payments systems or the depositary's or custodian's records could prevent provide effective internal control of the Manager, and its associates are The Audit and Risk Committee's assessment of this risk remains stable, and
accurate reporting and monitoring of the Company's financial position. There included within the Risk Management and Internal Control section of the unchanged from the previous year.
is also the potential for fraud, errors or control failures at the Company's Corporate Governance Report in the full Annual Report. The Manager has in
Manager and or third-party service providers, which could result in damage to place service level agreements with its service providers that are attested to The Board continues to monitor the outsourced services and an annual appraisal
the Company's reputation or result in losses. on an annual basis. of the performance, and ongoing appointment, of the Manager and the Company's
third-party service providers, is undertaken by the Management Engagement
The threat of a cyber-attack is regarded as at least as important as more The Company benefits directly and/or indirectly from all elements of Committee.
traditional physical threats to business continuity and security. In addition JPMorgan's Cyber Security programme, these controls are regularly tested and
to threatening the Company's operations, such an attack is likely to raise updates are shared with the Company's Audit and Risk Committee. The Audit and To date the Manager's cyber security arrangements have proven robust and the
reputational issues which may damage the Company's share price and reduce Risk Committee also reviews a summary of the independently audited controls Company has not been impacted by any cyber attacks threatening its operations.
demand for its shares. reports received from the Manager and the key service providers on a six
monthly basis.
The Company is subject to an annual external audit.
Change Key
ã Heightened áâ Stable ä Reduced
EMERGING RISKS
The AIC Code of Corporate Governance (the 'AIC Code') requires the Board to
put in place procedures to identify and manage emerging risks facing the
Company. At each meeting, the Board, through the Audit and Risk Committee,
considers whether any emerging risks, which it defines as potential trends,
sudden events or changing risks which are characterised by a high degree of
uncertainty in terms of occurrence probability and possible impacts on the
Company, have arisen. Horizon scanning and ongoing monitoring of the business
environment, industry trends, and regulatory changes helps the Audit and Risk
Committee to identify emerging risks. Once identified, as the impact of
emerging risks is understood, they may be entered on the Company's risk matrix
and mitigating activities considered as necessary.
Previously considered emerging risks (Artificial Intelligence reported in the
2024 Annual Report) have either been removed from the risk matrix as they are
no longer considered potential risks to the Company or escalated to a
principal risk. At the time of the publication of this report, the Audit and
Risk Committee has not identified any emerging risks facing the Company
however, it has noted the heightened level and evolving nature of the
geopolitical risks facing the Company and is monitoring these accordingly.
TRANSACTIONS WITH THE MANAGER AND RELATED PARTIES
Details of the management contract are set out in the Directors' Report in the
full Annual Report. The management fee payable to the Manager for the year was
£3,243,000 (2024: £3,208,000) of which £nil (2024: nil) was outstanding at
the year end.
Included in administration expenses in note 6 in the full Annual Report are
safe custody fees amounting to £270,000 (2024: £246,000) payable to JPMorgan
Chase Bank, N.A. of which £44,000 (2024: £102,000) was outstanding at the
year end.
The Manager may carry out some of its dealing transactions through its group
subsidiaries. These transactions are carried out at arm's length. The
commission payable to JPMorgan Securities Limited for the year was £5,000
(2024: £7,000) of which £nil (2024: £nil) was outstanding at the year end.
Stock lending income amounting to £73,000 (2024: £18,000) was receivable by
the Company during the year. The commissions in respect of such transactions
amounted to £8,000 (2024: £2,000) payable to the lending agent, JPMorgan
Chase Bank, N.A.
Handling charges (other capital charges) on dealing transactions amounting to
£30,000 (2024: £40,000) were payable to JPMorgan Chase Bank, N.A. during the
year of which £5,000 (2024: £11,000) was outstanding at the year end.
The Company also invests in the JPMorgan USD Liquidity Fund, which is managed
by JPMorgan Asset Management (Europe) S.à r.l. At the year end this was
valued at £6,267,000 (2024: £2,459,000). Income amounting to £159,000
(2024: £199,000) was receivable during the year of which £nil (2024: £nil)
was outstanding at the year end.
At the year end, total cash of £1,723,000 (2024: £701,000) was held with
JPMorgan Chase Bank, N.A. A net amount of interest of £8,000 (2024: £10,000)
was receivable by the Company during the year from JPMorgan Chase Bank, N.A.
of which £nil (2024: £nil) was outstanding at the year end.
Full details of Directors' remuneration and shareholdings can be found in the
full Annual Report and in note 6 in the full Annual Report.
STATEMENT OF DIRECTORS' RESPONSIBILITIES
The Directors are responsible for preparing the annual report and the
financial statements in accordance with applicable law and regulations.
Company law requires the Directors to prepare financial statements for each
financial year. Under that law, the Directors have elected to prepare the
financial statements in accordance with United Kingdom Generally Accepted
Accounting Practice (United Kingdom Accounting Standards and applicable law)
including FRS 102 'The Financial Reporting Standard applicable in the UK and
Republic of Ireland'. Under Company law the Directors must not approve the
financial statements unless they are satisfied that, taken as a whole, the
annual report and financial statements are fair, balanced and understandable,
provide the information necessary for shareholders to assess the Company's
performance, business model and strategy and that they give a true and fair
view of the state of affairs of the Company and of the total return or loss of
the Company for that period. In order to provide these confirmations, and in
preparing these financial statements, the Directors are required to:
• select suitable accounting policies and then apply them consistently;
• make judgements and 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 financial
statements; and
• prepare the 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.
The Directors are responsible for keeping proper accounting records that are
sufficient to show and explain the Company's transactions and disclose with
reasonable accuracy at any time the financial position of the Company and to
enable them to ensure that the financial statements comply with the UK
Companies Act 2006. They are also responsible for safeguarding the assets of
the Company and hence for taking reasonable steps for the prevention and
detection of fraud and other irregularities.
The financial statements are published on the
www.jpmglobalemergingmarketsincome.co.uk website, which is maintained by the
Company's Manager. The maintenance and integrity of the website maintained by
the Manager is, so far as it relates to the Company, the responsibility of the
Manager. The work carried out by the Auditor does not involve consideration of
the maintenance and integrity of this website and, accordingly, the Auditor
accepts no responsibility for any changes that have occurred to the financial
statements since they were initially presented on the website. The financial
statements are prepared in accordance with UK legislation, which may differ
from legislation in other jurisdictions.
Under applicable law and regulations the Directors are also responsible for
preparing a Directors' Report, Strategic Report and Directors' Remuneration
Report that comply with that law and those regulations.
Each of the Directors, whose names and functions are listed in the full Annual
Report confirm that, to the best of their knowledge:
• the financial statements, which have been prepared in accordance with
United Kingdom Generally Accepted Accounting Practice (United Kingdom
Accounting Standards and applicable law), give a true and fair view of the
assets, liabilities, financial position and return of the Company; and
• the Strategic Report includes a fair review of the development and
performance of the business and the position of the Company, together with a
description of the principal risks and uncertainties that it faces.
The Board confirms that it is satisfied that the annual report and financial
statements taken as a whole is fair, balanced and understandable and provides
the information necessary for shareholders to assess the Company's position
and performance, business model and strategy.
For and on behalf of the Board
Elisabeth Scott
Chair
6th November 2025
STATEMENT OF COMPREHENSIVE INCOME
For the year ended 31st July
Year ended 31st July 2025 Year ended 31st July 2024
Revenue Capital Total Revenue Capital Total
£'000 £'000 £'000 £'000 £'000 £'000
Gains on investments held at fair value through
profit or loss - 40,075 40,075 - 13,406 13,406
Net foreign currency exchange gains/(losses) - 899 899 - (76) (76)
Income from investments 19,987 236 20,223 20,948 275 21,223
Interest receivable and similar income 240 - 240 227 - 227
Gross return 20,227 41,210 61,437 21,175 13,605 34,780
Management fee (973) (2,270) (3,243) (962) (2,246) (3,208)
Other administrative expenses (919) - (919) (895) - (895)
Net return before finance costs and taxation 18,335 38,940 57,275 19,318 11,359 30,677
Finance costs (613) (1,431) (2,044) (696) (1,623) (2,319)
Net return before taxation 17,722 37,509 55,231 18,622 9,736 28,358
Taxation (1,749) 219 (1,530) (2,036) (896) (2,932)
Net return after taxation 15,973 37,728 53,701 16,586 8,840 25,426
Return per ordinary share (note 3) 5.69p 13.43p 19.12p 5.64p 3.01p 8.65p
All revenue and capital items in the above statement derive from continuing
operations.
The 'Total' column of this statement is the profit and loss account of the
Company and the 'Revenue' and 'Capital' columns represent supplementary
information prepared under guidance issued by the Association of Investment
Companies. Net return after taxation represents the profit for the year and
also the total comprehensive income.
STATEMENT OF CHANGES IN EQUITY
For the year ended 31st July
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
At 31st July 2023 2,973 222,582 13 99,644 93,489 19,145 437,846
Repurchase of ordinary shares into Treasury - - - (9,033) - - (9,033)
Net return - - - - 8,840 16,586 25,426
Dividends paid in the year (note 2) - - - - - (15,615) (15,615)
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 - - - - 37,728 15,973 53,701
Dividends paid in the year (note 2) - - - - - (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 reserves of the Company and
may be used to fund distributions to investors.
STATEMENT OF FINANCIAL POSITION
At 31st July
31st July 2025 31st July 2024(1)
£'000 £'000
Fixed assets
Investments held at fair value through profit or loss(1) 466,501 455,480
Investments on loan held at fair value through profit or loss(1) 5,553 9,884
Total investments held at fair value through profit or loss 472,054 465,364
Current assets
Debtors 1,296 2,804
Current assets investments(1) 6,267 2,459
Cash at bank(1) 1,723 701
9,286 5,964
Current liabilities
Creditors: amounts falling due within one year (31,423) (16,110)
Net current liabilities (22,137) (10,146)
Total assets less current liabilities 449,917 455,218
Creditors: amounts falling due after more than one year - (15,571)
Provision for liabilities (395) (1,023)
Net assets 449,522 438,624
Capital and reserves
Called up share capital 2,973 2,973
Share premium account 222,582 222,582
Capital redemption reserve 13 13
Other reserve 63,106 90,611
Capital reserve 140,057 102,329
Revenue reserve 20,791 20,116
Total equity shareholders' funds 449,522 438,624
Net asset value per ordinary share (note 4) 166.7p 151.4p
(1) Prior year comparatives have been restated as explained in note
1(a).
STATEMENT OF CASH FLOWS
For the year ended 31st July
Year ended Year ended
31st July 2025 31st July 2024
£'000 £'000
Cash flows from operating activities
Net return before finance costs and taxation 57,275 30,677
Adjustment for:
Net gains on investments held at fair value through profit or loss (40,075) (13,406)
Net foreign currency exchange (gains)/losses (899) 76
Dividend income (20,223) (21,221)
Interest income (167) (209)
Scrip dividends received as income - (2)
Realised gains/(losses) on foreign currency exchange transactions 60 (239)
Realised foreign currency exchange (losses)/gains on the JPMorgan USD
Liquidity Fund (81) 191
(Increase)/decrease in other debtors (11) 30
Decrease in accrued expenses (4) (2)
Net cash outflow from operating activities before dividends, interest and (4,125) (4,105)
taxation
Dividends received 19,567 19,310
Interest received 167 209
Overseas withholding tax recovered 55 51
Indian capital gains tax (paid)/recovered (409) 3
Net cash inflow from operating activities 15,255 15,468
Purchases of investments (115,590) (124,379)
Sales of investments 149,340 135,473
Net cash inflow from investing activities 33,750 11,094
Dividends paid (15,298) (15,615)
Repurchase of ordinary shares into Treasury (26,892) (9,032)
Repayment of loan (31,935) -
Drawdown of loan 31,870 -
Interest paid (1,989) (2,256)
Net cash outflow from financing activities (44,244) (26,903)
Increase/(decrease) in cash and cash equivalents(1) 4,761 (341)
Cash and cash equivalents at start of year(1) 3,160 3,475
Foreign currency exchange movements 69 26
Cash and cash equivalents at end of year(1) 7,990 3,160
Cash and cash equivalents consist of(1):
Cash at bank 1,723 701
Current assets investments in the JPMorgan USD Liquidity Fund 6,267 2,459
Total 7,990 3,160
( )
(1) The term 'cash and cash equivalents' is used for the purposes of
the Statement of Cash Flows.
NOTES TO THE FINANCIAL STATEMENTS
1. Accounting policies
(a) Basis of accounting
The financial statements are prepared under the historical cost convention,
modified to include fixed asset investments at fair value, and in accordance
with the UK 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 financial statements have been prepared on a going concern basis. In
forming this opinion, the Directors have considered the Company's investment
objective, risk management policies, capital management policies and
procedures, the nature of the portfolio and revenue as well as cashflow and
expenditure projections, taking into account the ongoing impact of worldwide
geopolitical instability on the revenue expected from underlying investments
in these projections, the Company has adequate resources, an appropriate
financial structure and suitable management arrangements in place to continue
in operational existence for the foreseeable future. The Company's investments
are in quoted securities which are readily realisable and exceed its
liabilities significantly. Gearing levels and compliance with loan covenants
are reviewed by the Board on a regular basis. The Board has considered the
Company's adherence with its current lending covenants and concluded that
these can be readily met. It also considered its current borrowings and noted
that the repayment of the current facilities, drawn down at the year end,
could be made given the liquidity of the portfolio. The Company's key
third-party suppliers, including its Manager, are not experiencing any
operational difficulties to adversely affect their services to the Company.
The Board is 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. These risks continue to
be monitored through the Company's risk matrix and are supplemented with
horizon scanning where applicable. For these reasons, the Directors consider
that there is reasonable evidence to continue to adopt the going concern basis
in preparing the financial statements. They have not identified any material
uncertainties to the Company's ability to continue to do so over a period of
at least 12 months from the date of approval of these financial statements to
6th November 2026.
Prior year restatements
For the year ended 31st July 2024, the investments held at fair value through
profit or loss in the Statement of Financial Position have been restated to
separately disclose the investments on loan held at fair value through profit
or loss. The value of investments on loan, included within the value of
investments held at fair value through profit or loss of £465,364,000, was
£9,884,000. This change in presentation has no impact on the Company's net
assets as reported for the year ended 31st July 2024 and the opening balances
as at 1st August 2023. Further details of the securities on loan are provided
in note 22 (c) Credit risk exposure in the full Annual Report.
For the year ended 31st July 2024, the 'Cash and cash equivalents' line item
of £3,160,000 in the Statement of Financial Position has been restated to
'Cash at bank' and 'Current asset investments'. This restatement separately
reports the investment in the JPMorgan USD Liquidity Fund as 'Current assets
investments' of £2,459,000 and 'Cash at bank' of £701,000, in compliance
with the statutory format required by the Companies Act 2006. This change in
presentation has no impact on the Company's net assets as reported for the
year ended 31st July 2024 and the opening balances as at 1st August 2023.
The policies applied in these financial statements are consistent with those
applied in the preceding year.
2. Dividends
(a) Dividends paid and declared
2025 2024
Pence £'000 Pence £'000
Dividends paid
Fourth interim dividend in respect of prior year 2.40 6,930 2.30 6,813
First interim dividend paid 1.00 2,859 1.00 2,955
Second interim dividend paid 1.00 2,790 1.00 2,944
Third interim dividend paid 1.00 2,719 1.00 2,903
Total dividends paid in the year 5.40 15,298 5.30 15,615
Dividends declared
Fourth interim dividend declared 2.60 6,968 2.40 6,930
In respect of the year ended 31st July 2025, the fourth interim dividend of
2.60p per ordinary share amounting to £6,968,000 (2024: 2.40p per ordinary
share amounting to £6,930,000) was declared with an ex-dividend date of 11th
September 2025 and paid on 17th October 2025. In accordance with the
accounting policy of the Company, this dividend will be reflected in the
Financial Statements for the year ending 31st July 2026.
(b) Dividend for the purposes of Section 1158 of the Corporation Tax Act
2010 ('Section 1158')
The requirements of Section 1158 are considered on the basis of dividends
declared in respect of the financial year, shown below.
2025 2024
Pence £'000 Pence £'000
First interim dividend 1.00 2,859 1.00 2,955
Second interim dividend 1.00 2,790 1.00 2,944
Third interim dividend 1.00 2,719 1.00 2,903
Fourth interim dividend 2.60 6,968 2.40 6,930
Total dividends for Section 1158 purposes 5.60 15,336 5.40 15,732
The current year revenue available for distribution by way of dividend for the
year is £15,973,000 (2024: £16,586,000). The revenue reserve after payment
of the fourth interim dividend will amount to £13,823,000 (2024:
£13,186,000).
3. Return per ordinary share
The Revenue, Capital and Total return shown below is the Net return after
taxation in the Statement of Comprehensive Income in the full Annual Report.
2025 2024
£'000 £'000
Revenue return 15,973 16,586
Capital return 37,728 8,840
Total return 53,701 25,426
Weighted average number of ordinary shares in issue during the year 280,885,971 294,183,867
Revenue return per ordinary share 5.69p 5.64p
Capital return per ordinary share 13.43p 3.01p
Total return per ordinary share 19.12p 8.65p
4. Net asset value per ordinary share
2025 2024
Net assets (£'000) 449,522 438,624
Number of ordinary shares in issue 269,640,266 289,682,588
Net asset value per ordinary share 166.7p 151.4p
5. Status of announcement
2024 Financial Information
The figures and financial information for 2024 are extracted from
the Annual Report and Accounts for the year ended 31st July 2024 and do not
constitute the statutory accounts for that year. The Annual Report and
Accounts includes the Report of the Independent Auditor which is unqualified
and does not contain a statement under either section 498(2) or section 498(3)
of the Companies Act 2006. The Annual Report and Accounts has been delivered
to the Registrar of Companies.
2025 Financial Information
The figures and financial information for 2025 are extracted from
the Annual Report and Accounts for the year ended 31st July 2025 and do not
constitute the statutory accounts for that year. The Annual Report and
Accounts includes the Report of the Independent Auditor which is unqualified
and does not contain a statement under either section 498(2) or section 498(3)
of the Companies Act 2006. The Annual Report and Accounts will be delivered to
the Registrar of Companies in due course.
JPMORGAN FUNDS LIMITED
7th November 2025
For further information, please contact:
Emma Lamb
For and on behalf of
JPMorgan Funds Limited - Company Secretary
Telephone: 0800 20 40 20 or or +44 1268 44 44 70
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 annual report 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 Annual Report will also shortly be available on the Company's website at
www.jpmglobalemergingmarketsincome.co.uk
(http://www.jpmglobalemergingmarketsincome.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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