JPMorgan Emerging Markets Investment Trust Plc (LON:JMG), today announced half years report for the six months ended 31 December 2018
During the first half of the Company’s financial year, emerging markets were volatile. Over the period, the Company’s benchmark index, the MSCI Emerging Markets Index (in sterling terms), fell by 5.1%. In the same period the Company’s performance, at -2.0%, was rather better than the benchmark. The return to shareholders was positive, at +3.1%, reflecting a significant narrowing of the discount at which the Company’s shares trade, from 11.7% at the previous financial year end, to 8.1% at the half year end. Whilst it is disappointing to report a fall in the net asset value, it is pleasing that the return to shareholders was positive and the outperformance of the benchmark on both measures once again demonstrates the benefits of active management. The Company’s net asset value and share price have both outperformed the benchmark index over the three, five and ten years to 31st December 2018.
This sustained, long-term outperformance is a great credit to Austin Forey and the team at JPMorgan Asset Management. Their focus on finding and investing in long-term winners across the emerging markets’ spectrum, backed by the strong and experienced analytical resource of the investment team, has ensured that the Company has continued to outperform its benchmark consistently over the longer term.
A review of the Company’s performance for the first six months of this financial year and the outlook for the remainder of the year is provided in the Investment Manager’s Report which follows.
Revenue and Dividends
In the first half of the Company’s financial year, the portfolio generated earnings of 4.70 pence per share (2017: 4.41 pence). Last year, the Company paid a final dividend of 12.5 pence per share and the Board has agreed that the Company now generates sufficient income to warrant the payment of an interim dividend each year. This will more closely reflect the receipt of income from the Company’s portfolio. As a consequence the Board has declared an interim dividend of 5.0 pence per share, payable on 18th April 2019 to shareholders on the register at the close of business on 15th March 2019. The ex-dividend date will be 14th March 2019.
Share Repurchases and Discount
The Board is pleased that the discount on the Company’s shares has narrowed in recent months. It regularly considers the merits of buying back shares when it believes this to be in shareholders’ interest and in order to manage the discount. In particular, it will consider taking action to ensure the discount does not exceed 10% for an extended period, if the discount is out of line with the peer group and market conditions are orderly.
During the six months the Company was active in buying back shares and it repurchased a total of 817,015 shares into Treasury at an average discount of 11.3% and a total cost of £6.73 million. The buybacks have benefitted shareholders as they increase the net asset value per share. The discount on the Company’s shares narrowed: over the period it ranged between 7.5% and 13.1%, averaging 11.1%. At the half year end, the discount was 8.1%.
Anatole Kaletsky retired at the conclusion of the Annual General Meeting (‘AGM’) held in November 2018, having served as a Director since 2003. On behalf of the Board, I would like to thank him for his service to the Company and its shareholders.
Aidan Lisser was appointed to the Board on 1st December 2018. Aidan is Head of Strategy at Investec Wealth & Investment Limited, where he was previously Chief Marketing Officer. He has broad senior level brand and marketing experience across consumer products, banking, asset and wealth management, having been Chief Marketing Officer at Allianz Global Investors and Head of Group Brand at Standard Chartered Bank plc. He previously held various positions at Unilever, including four years based in China and three years in Thailand. Mr Lisser is also a Non-Executive Director of Henderson International Income Trust plc.
Stock markets have recovered from their lows in the fourth quarter of 2018 as some of the fears of rising interest rates, a stronger US dollar and a more aggressive US trade policy have receded. There are, however, still concerns that China and other major global economies are slowing down which may create some further headwinds and volatility going forward. Against this backdrop, emerging markets will continue to provide opportunities to invest in a number of quality companies with sustainable growth potential at reasonable valuations, which remains the focus of your Investment Manager.
JPMorgan Emerging Markets Investment Trust Plc Chairman