Presentation on theme: "JPMorgan Global Emerging Markets Income Trust Annual General Meeting 28 th November 2013."— Presentation transcript:
JPMorgan Global Emerging Markets Income Trust Annual General Meeting 28 th November 2013
1 JPMorgan Global Emerging Markets Income Trust plc
2 31 st July 2012 – 31 st July 2013 Portfolio return15.8% Index5.4% Return to shareholders12.1% Return on net assets14.7% Dividend4.9p 31 st July 2013 – 31 st October 2013 Portfolio return0.8% Index3.6% Ordinary share price return3.4% JPMorgan Global Emerging Markets Income Trust - Performance Source: J.P. Morgan Asset Management The Trust has produced a positive rise in NAV and outperformed its benchmark during a challenging period The Company has produced a steady income stream from a diversified portfolio of high quality companies whose earnings and dividends have risen Portfolio changes over the year (turnover) have been modest; consistent with our desire to be a long term investor The portfolio favours the stable growth in sectors such as consumer, telecommunications and industrials over the cyclicality of natural resources, a position we expect to continue
Source: J.P. Morgan Asset Management JPMorgan Global Emerging Markets Income Trust – Attribution analysis Total effect Asset AllocationStock Selection % 1.61% 1.41% 0.95% 0.85% 0.82% 0.60% 0.58% 0.43% 0.36% 0.13% 0.11% -0.08% -0.11% -0.35% -0.78% Trust (%)Return (%)Index (%)Contribution Advanced Info Service Arcelik SJM Holdings Ford Otomotiv Novatek Microelectronics Foschini Group SAFCO Tencent CTEEP Indo Tambangraya Country level Stock level
South Africa, Consumer Discretionary Diversified company including auto distribution, of Kia and Hyundai cars and logistics across Sub-Saharan Africa High focus on return on invested capital If businesses don’t meet targets, they change or sell Management focus on 40% payout ratio going forward JPMorgan Global Emerging Markets Income Trust – Stock holdings Poland, Materials The annual tussle between management and government regarding the dividend ended lower than we expected Previously we thought the government would want to maximise dividends from the company This dividend result suggests that they are willing to accept lower dividends...and one that didn’t work: KGHM Source: Bloomberg. Company accounts. Data as at end September The companies/securities above are shown for illustrative purposes only. Their inclusion should not be interpreted as a recommendation to buy or sell. J.P. Morgan Asset Management may or may not positions on behalf of its clients in any or all of the aforementioned securities. One that worked: Imperial Holdings 4
5 Sector Breakdown as of 30 th September 2013 Country Breakdown as of 30 th September 2013 Sector and country breakdown Source: J.P. Morgan Asset Management. The Trust is an actively managed portfolio; holdings, sector weights, allocations and leverage, as applicable are subject to change at the discretion of the Investment Manager without notice. China includes Macau.
Top 10 stocks as at 30 th September 2013 StockCountrySector%Yield (%) Delta ElectronicsTaiwanInformation Technology Bank Of ChinaChinaFinancials Imperial HoldingsSouth AfricaConsumer Discretionary Wynn MacauChinaConsumer Discretionary Bidvest GroupSouth AfricaIndustrials SberbankRussiaFinancials Coal IndiaIndiaEnergy Banco Do BrasilBrazilFinancials LukoilRussiaEnergy CieloBrazilInformation Technology JPM Global Emerging Markets Income Trust plc - Key holdings Source: J.P. Morgan Asset Management, Bloomberg, November 2013, 12 month yield. The holdings represent the current holdings of the Strategy. However, it cannot be assumed that these types of investments will be available to or will be selected by the Strategy in the future. The companies/securities above are shown for illustrative purposes only. Their inclusion should not be interpreted as a recommendation to buy or sell. J.P. Morgan Asset Management may or may not positions on behalf of its clients in any or all of the aforementioned securities.
7 A broad investment universe Greater style and geographic diversification possible and desirable Number of companies that meet selected Average Daily Volume hurdles Source: JP Morgan Asset Management, Bloomberg, data as at October Companies with minimum market cap USD 1 billion, average daily traded value USD 1 million, and yield > 4%. 395 in EM. The use of the above company logos is in no way an endorsement for JPMAM investment management services. 395
8 Powerful combination of Income & Growth Source: J.P. Morgan Asset Management. For illustrative purposes only. Yields as at end September PZU: a dominant Insurance company in Poland, steady 7% yield Low dividend yieldTarget dividend yieldHigh Dividend Yield ( <3% )( 3-6% )( >6% ) TARGET 60% of portfolio TARGET 20% of portfolio TARGET 20% of portfolio Bidvest: global food logistics operator based in South Africa, 2.8% yield with mid-teens growth projected Ethiad Etisalat: Saudi mobile operator 5.3% yield with progressive dividend policy
9 Market update and outlook
10 Recent coverage of Emerging Markets… Source: Financial Times, Shutterstock. Images for illustrative purposes only.
11 MSCI Emerging Markets Index: long term growth in dividends and earnings Index, 100 = Jan 1990 EPSDPS Emerging Markets10.4%14.8% Developed Markets7.7%7.5% EM DM 10 years Compound Annual Growth Rates …Dividends have shown their resilience Source: MSCI, IBES, FactSet, J.P. Morgan Asset Management. Regular dividends only in local currency. As at end Sep Past performance is not an indication of future performance. EPS – Earnings per share. DPS – Dividends per share
12 Source: Bloomberg, Factset, UBS, Data as at 30 October MSCI Emerging Markets index. GEM Price-to-Book: 1993 – October 2013 Neutral Pessimistic Optimistic Euphoric Panic Our standard valuation metric looks attractive Valuation
13 JPMorgan Global Emerging Markets Income Trust - Summary The Trust has had another pleasing year, despite continued global volatility Dividends have shown their resilience and we believe prospects for steady future growth are good The portfolio remains well diversified by country and sector Valuations in the asset class are at attractive levels
14 J.P. Morgan Asset Management Luke Richdale, Client Portfolio Manager – Emerging Markets Equities +44 (0) Claire Peck, Client Portfolio Manager – Emerging Markets Equities +44 (0) Contact Emily Whiting, Client Portfolio Manager – Emerging Markets Equities +44 (0) Eric Bian, Client Portfolio Manager – Emerging Markets Equities +44 (0) Please note, telephone lines may be recorded and monitored for security and training purposes.
15 JPMorgan Global Emerging Markets Income Trust plc: Risk profile Risk Profile – Investments in emerging markets may involve a higher element of risk due to political and economic instability and underdeveloped markets and systems – Exchange rate changes may cause the sterling value of underlying overseas investments to go down as well as up – There can be no guarantee that the targeted yield of 4% will be achieved and therefore such forecasts are not a reliable indicator of future performance Please refer to the Fund’s prospectus for more information relating to the Fund.