Interim / Quarterly Report • Apr 4, 2024
Interim / Quarterly Report
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Half Year Report & Financial Statements for the six months ended 31st January 2024
The investment objective of JPMorgan Global Emerging Markets Income Trust plc (the 'Company' or 'JEMI') is to provide investors with a dividend income combined with the potential for long term capital growth from a diversified portfolio of emerging markets investments.
In order to achieve its investment objective and to seek to manage risk, the Company invests in a diversified portfolio of high quality emerging markets companies which, collectively, are expected to pay a higher dividend yield than the benchmark.
The Company invests predominantly in listed equities. It is free to invest in any particular market, sector or country in the global emerging markets universe and there are no fixed limits on portfolio construction with regard to region, country, sector or market capitalisation. The portfolio will typically contain around 50 to 80 holdings.
No more than 15% of gross assets will be invested in any one company at the time of investment.
No more than 10% of gross assets in unlisted securities or in other listed closed-ended investment funds at the time of investment.
Borrowings may be utilised to gear the portfolio to enhance shareholder returns.
Detailed information on investment policies, investment guidelines and risk management are given in the Business Review on pages 29 and 30 of the Company's Annual Report & Financial Statements for the year ended 31st July 2023.
Investors should note that there can be significant economic and political risks inherent in investing in emerging economies. As such, emerging markets can exhibit more volatility than developed markets and this should be taken into consideration when evaluating the suitability of the Company as a potential investment.
The Company's benchmark is the MSCI Emerging Markets Index, with net dividends reinvested, in sterling terms (the 'Benchmark').
At 31st January 2024, the Company's issued share capital comprised 297,289,438 Ordinary shares of 1p each, including 1,916,850 shares held in Treasury.
At the Annual General Meeting ('AGM') of the Company held on 25th November 2021, an ordinary resolution was put to shareholders that the Company continue in existence for a further three year period. The resolution received the support of 100% of voting Shareholders at the AGM, representing 45.37% of the Company's issued share capital at the time of the AGM. In accordance with the Company's Articles of Association, an ordinary resolution that the Company will continue in operation will be put to Shareholders at the 2024 AGM.
The Company engages JPMorgan Funds Limited ('JPMF' or the 'Manager') as its Alternative Investment Fund Manager. JPMF delegates the management of the Company's portfolio to JPMorgan Asset Management (UK) Limited ('JPMAM' or the 'Investment Manager'). Omar Negyal and Isaac Thong (the 'Portfolio Managers') manage the Company's portfolio on behalf of the Investment Manager.
The Company is a member of the Association of Investment Companies (the 'AIC').
The Company's website can be found at www.jpmglobalemergingmarketsincome.co.uk, which includes useful information about the Company, such as daily prices, factsheets and current and historic half year and annual reports.
General enquiries about the Company should be directed to the Company Secretary at [email protected].
| FINANCIAL CALENDAR | |
|---|---|
| Financial year end | 31st July |
| Final results announced | October |
| Half year end | 31st January |
| Half year results announced | April |
| Interim dividends declared | March, June, August and November |
| Annual General Meeting | November |
| Half Year Performance | |
|---|---|
| Financial Highlights | 5 |
| Chair's Statement | |
| Chair's Statement | 8 |
| Investment Review | |
| Investment Manager's Report | 12 |
| List of Investments | 15 |
| Portfolio Analyses | 17 |
| Financial Statements | |
| Condensed Statement of Comprehensive Income | 20 |
| Condensed Statement of Changes in Equity | 21 |
| Condensed Statement of Financial Position | 22 |
| Condensed Statement of Cash Flows | 23 |
| Notes to the Financial Statements | 25 |
| Interim Management Report | |
| Interim Management Report | 28 |
| Shareholder Information | |
| Glossary of Terms and Alternative Performance Measures | 30 |
| Where to Buy J.P. Morgan Investment Trusts | 33 |
| Share Fraud Warning | 34 |
| Information about the Company | 35 |
The Board and the Portfolio Managers are keen to increase dialogue with shareholders and other interested parties. If you wish to sign up to receive email updates from the Company, including news and views and latest performance statistics, please click the QR Code to the right or visit https://tinyurl.com/JEMI-Sign-Up
Source: Morningstar.
2 Source: J.P. Morgan/Morningstar using cum income net asset value per share.
3 Source: MSCI. The Company's benchmark is the MSCI Emerging Markets Index, with net dividends reinvested, in sterling terms.
4 Represents the 2023 fourth interim dividend and the 2024 first interim dividend.
A Alternative Performance Measure ('APM').
A glossary of terms and APMs is provided on pages 30 to 32.
| Six months ended 31st January 2024 |
Year ended 31st July 2023 |
||
|---|---|---|---|
| Total returns for the period/year | |||
| Return to shareholders1,A | –5.0% | +12.6% | |
| Return on net assets2,A | –2.4% | +9.2% | |
| Benchmark return3 | –5.0% | +2.5% |
| 31st January 2024 |
31st July 2023 |
% change |
|
|---|---|---|---|
| Net asset value, share price and discount | |||
| Net assets (£'000) | 416,043 | 437,846 | –5.0 |
| Net asset value per shareA,4 | 140.9p | 147.7p | –4.6 |
| Share price5 | 124.0p | 134.0p | –7.5 |
| Share price discount to net asset value per shareA | 12.0% | 9.3% | |
| Shares in issue (excluding shares held in Treasury) | 295,372,588 | 296,482,060 | –0.4 |
| GearingA | 7.4% | 5.7% | |
| Ongoing charges (annualised)A | 0.95% | 0.92% |
1 Source: Morningstar.
Source: JP.Morgan/Morningstar using cum income net asset value per share.
3 Source: MSCI. The Company's benchmark is the MSCI Emerging Markets Index, with net dividends reinvested, in sterling terms.
4 The % change excludes dividends reinvested. Including dividends reinvested, the return would be –2.4%.
5 The % change excludes dividends reinvested. Including dividends reinvested, the return would be –5.0%.
A Alternative Performance Measure ('APM').
A glossary of terms and of APMs is provided on pages 30-32.
Elisabeth Scott Chair
Following good returns in the year to July 2023, Emerging Markets declined during the six months to 31st January 2024. The Company's benchmark index, the MSCI Emerging Markets Index with net dividends reinvested (in sterling terms) (the 'Benchmark'), fell by 5.0% over the six months under review. In the same period, the Company's total return on net assets was –2.4%, outperforming the Benchmark.
The total return to shareholders (which includes both the share price return and dividends) was –5.0%, which reflects a widening of the discount to net asset value ('NAV') at which the Company's shares trade from 9.3% at the previous financial year end to 12.0% at the end of the half year period.
The Investment Manager's Report, which can be found on pages 12 to 14, 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.
It is worth highlighting that returns were supported by the positive performance of positions in Korea, Taiwan and South Africa while not owning the three largest Chinese internet stocks also provided a boost to relative performance. The Company's underweight position in the Indian equity market detracted from overall performance although shareholders will be aware that many Indian companies do not pay dividends and are therefore excluded from the Portfolio Managers' universe of stocks. Nonetheless, the Board is pleased that the Portfolio Managers' stock selection was the principal reason for the Company's outperformance against the Benchmark over the reporting period.
Whilst the decline in share price and NAV over the six months is disappointing, I want to draw your attention to the fact that performance over periods of three, five years and beyond is significantly ahead of the Benchmark, reflective of the Company's long-term approach and testament to the experience of the Portfolio Managers and strength of their process. Please see page 5 for the long-term performance figures.
Net revenue earnings for the six months to 31st January 2024 amounted to 1.78p per share. As is generally the case, the Company expects to earn the bulk of its dividend income during the second half of its financial year.
During the reporting period, the Board has declared two interim dividends of 1.0p each, in line with the same period last year. The second interim dividend will be paid on 19th April 2024 to shareholders on the register as at the close of business on 8th March 2024. The ex-dividend date was 7th March 2024. In the last financial year, the Board paid a total dividend of 5.3p per share, a modest increase from 5.2p in 2022. This was fully covered by income. The fourth interim dividend was paid on 20th October 2023.
The Board reviews dividend receipts at each of its Board meetings, given their importance to the Company. The Board carefully considers the outlook for dividend receipts with the Portfolio Managers 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 that is expensive and, for many currencies, impracticable. That 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. Over the longer term, your Board and the Investment Manager are of the view that Emerging Markets offer attractive income prospects alongside the prospects for strong earnings growth.
The Board believes that gearing can be used to enhance long-term shareholder returns. Gearing levels are discussed with the Portfolio Managers at each Board meeting. Presently, the Company has a US\$20 million two-year revolving loan facility with Mizuho Bank Limited ('Mizuho'), repayable in November 2024, with an interest rate of margin plus Secured Overnight Financing Rate ('SOFR'). The Company also maintains a US\$20 million revolving loan facility with ING Bank Limited, which is repayable in October 2025, having been renewed during the reporting period at a competitive market rate plus SOFR.
With the pending maturity of the Mizuho facility later in the year, your Board will be working closely with the Manager to review the borrowing options. As at 31st January 2024, gearing stood at 7.4% (31st July 2023: 5.7%).
During the six months to 31st January 2024, the Company's share price traded at an average discount to NAV of 11.6%. The Board regularly considers the merits of buying back shares in order to manage the level and volatility of the discount. The Board will buy back shares only if it is considered to be in the best interests of shareholders to do so. During the reporting period, the Company repurchased 1,109,472 shares into Treasury at an average discount of 11.7% and at a total cost of £1.4 million. It did not issue any shares. These purchases were value accretive for shareholders, increasing the NAV per share by 0.1%, and they underscore your Board's belief that there is attractive value in the investments held by the Company.
At the time of writing, the discount stands at 13.2%. 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 half year period and 3rd April 2024, the Company has repurchased a further 1.6 million shares into Treasury.
The Investment Manager incorporates Environmental, Social and Governance ('ESG') considerations into its investment process, with the potential impact of financially material ESG factors on a company's ability to deliver shareholder value considered as part of the Portfolio Managers' stock selection process in building a strong and resilient portfolio.
Your Board shares this belief in the importance of ESG factors for long-term investments and supports the Portfolio Managers' efforts to maintain continuous engagement with investee companies.
The Investment Manager has recently published a document containing its latest Investment Stewardship Priorities, which may be of interest to shareholders. This can be found at: https://am.jpmorgan.com/gb/en/asset-management/adv/about-us/investment-stewardship/
During the reporting period, the Board agreed with the Manager that the Company's investment management fees should be tiered, as previously announced.
With effect from 1st November 2023, the investment management fee has been charged on a tiered basis at an annual rate of 0.75% of the Company's net assets on the first £500 million and at 0.65% of net assets above that amount. This compares with the previous arrangement under which the management fee was charged at an annual rate of 0.75% on net assets. The fee is calculated and paid monthly.
As previously announced, Jeffrey Roskell, a portfolio manager for the Company since 1st August 2016, retired from JPMorgan Asset Management on 29th February 2024. We would like to thank Jeff for his contribution to the management of the Company's assets and wish him well in his retirement.
I am delighted that Ranjan Ramparia has joined the Board with effect from 1st March 2024, as previously announced. She brings with her considerable experience in corporate finance and investment management along with an early career in accountancy. It is the Board's intention that Ms Ramparia will take on the role of Chair of the Audit & Risk Committee once Ms Gulliver stands down at the conclusion of the Company's November 2024 Annual General Meeting. Ms Ramparia will also serve as a member of the Company's Management Engagement Committee and the Nomination & Remuneration Committee.
The Nomination & Remuneration Committee plans for succession to ensure that the Board retains an appropriate balance of skills, knowledge and diverse perspectives.
The Company delivers email updates with regular 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 of this report.
The geopolitical outlook remains uncertain as tensions continue with the war in Ukraine currently showing no signs of abating and elevated tensions across the Middle East. The US elections and the consequences for relations with China could provide further challenges.
However, there are reasons to be optimistic on the outlook for Emerging Markets. Global inflation is receding and there are expectations that there will be a soft landing for the US economy followed by interest rate cuts later this year. While these might not come about as quickly as many had previously thought, this has provided comfort to the markets. In addition, the Chinese government has taken policy measures to improve its support for the economy and while these fell somewhat short of expectations overall, we note that the Portfolio Managers' successful selective approach to stock picking in China over the reporting period contributed to returns.
In conclusion, the Board believes that there are compelling opportunities for investment in Emerging Markets, with dispersion between sectors at elevated levels and an attractive relative level of valuation compared to developed markets. We are confident that the focused and disciplined stock selection process adopted by the Investment Manager will continue to deliver attractive long term returns to shareholders, as evidenced by the Company's strong track record.
On behalf of the Board, I would like to thank you for your ongoing support.
Elisabeth Scott
Chair 3rd April 2024
Omar Negyal Portfolio Manager
Isaac Thong Portfolio Manager
For the six-month period ended 31st January 2024, the Company's total return on net assets, including dividends, was –2.4% (in GBP). This compares to the Benchmark which returned –5.0%. The Company's longer-term relative performance is positive. Its net asset value ('NAV') has achieved annualised outperformance of the Benchmark of 17.0% over three years ended 31st January 2024, 20.2% over the past five years, and 27.0% over the past ten years. Please see page 5 for further details.
Emerging markets were generally weak over the six months ended 31st January 2024. The Company's Benchmark declined by 5.0% over this period, due mainly to the poor performance of the Chinese equity market, where investor sentiment was undermined by concerns about the economy. The widely anticipated post-pandemic rebound failed to materialise as consumer confidence, and hence consumption, were adversely impacted by ongoing problems in the property sector, after a prolonged period of overbuilding and excessive leverage. The Chinese government's apparent reluctance to take decisive steps to solve these problems is exacerbating consumer caution.
We recognise that China faces fundamental challenges, including not only weak consumer demand, and a stricken property market, but also an increasingly fractious relationship with the US, but nonetheless we still see value and opportunities in some areas of the Chinese market. Valuations are low following persistent declines over the past three years, and, in addition, some corporates are returning more cash to shareholders via higher dividend payments and share buybacks – something which is of particular interest to income investors like us.
Elsewhere, Taiwan performed well, supported by the popularity of its technology stocks. The fundamentals of this industry generally look favourable, and some Taiwanese tech companies are also seeing stronger demand due to exposure to the artificial intelligence ('AI') revolution. Mexico also did well. The economy is performing strongly, helped by its proximity to the US, as companies look to diversify and strengthen their global supply chains by moving production closer to their principal markets.
Overall, we have held a cautious view around the potential risk of a slowdown in the US economy, which would dampen global demand. However, we saw little sign of this during the six-month review period. The US Federal Reserve held interest rates steady as inflation pressures eased, and many investors are now expecting rates to begin falling this year.
The Company's outperformance against its Benchmark over the six months ended 31st January 2024 was driven by stock selection in China and Hong Kong, Korea, Taiwan and South Africa. The biggest drag on relative performance was the portfolio's underweight to India, which outperformed the Benchmark over the period.
Within China, not owning certain internet and e-commerce stocks was helpful, as these stocks sustained significant losses when the post-pandemic rebound in Chinese consumption proved insipid, and investors revised down their expectations about the economy's longer-term growth prospects. These same factors also triggered declines in some of the portfolio's Chinese consumer stocks, including Wuliangye (a distiller specialising in the production of baiju, a Chinese liquor), JD.com (an e-commerce platform) and Tingyi (a manufacturer of noodles and drinks). Overall, however, our Chinese stocks performed better on average than the benchmark, and thus enhanced relative performance.
Outside China we saw strong performance from names such as:
commence. Our positioning in these two names illustrates the merit of our valuation discipline, as we acquired exposure at what we believed to be attractive yield levels and benefited from their subsequent share price recovery.
– Banco do Brasil – This low-priced, state-owned Brazilian bank saw some rerating over the period. When we met the management recently, we were impressed by the focus on profitability, which allayed our general concerns regarding the bank's public ownership. Dividends are also high on the managements' agenda, which adds to the stock's appeal.
We build the portfolio from the bottom up, based on our consistent stock selection process, which incorporates analysis on each stock's return on equity, free cash flow, and dividend policies. As mentioned above, we adopt a disciplined approach to valuations. So, in effect, our approach incorporates both quality and value.
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, we continue to find the most attractive income opportunities within Consumer Staples, Financials and Technology, so these remain the portfolio's three key sector overweights, while historically, the portfolio is usually underweight in Materials, Energy and Industrials.
At the country level, portfolio overweights include South Africa, Mexico and Taiwan. As with our sector allocations, these country weightings are driven by the individual stock opportunities we view as attractive from an income investor's perspective. In contrast, our largest country underweight remains India. This country's long-term growth prospects are very positive and investor interest in the market remains strong. However, valuations are high accordingly, which make it difficult for us to find attractive income paying stocks, albeit with some notable exceptions such as Infosys and HCL Tech, mentioned above. The portfolio is modestly overweight China which reflects this market's attractive valuations and improving dividend outlook.
As ever, the portfolio changes we implemented over the review period were mainly driven by individual stock considerations. Recent purchases have included:
Sales over the review period included:
Monitoring dividend delivery is clearly essential for this portfolio, given its income focus, and we are pleased to report that in general, portfolio companies are paying dividends in line with our expectations. Looking ahead, the two key determinants of portfolio dividend receipts will remain the performance of the Chinese economy, and the ongoing, but perhaps diminishing, possibility of a US economic downturn. However, despite the near-term uncertainties generated by these two issues, we are confident that the portfolio's long-term dividend generating power remains intact.
As a reminder, emerging market companies mainly determine their dividends using payout ratios (i.e. paying a certain proportion of earnings) so the earnings cycle is important in terms of the dividend companies pay in any given year. This is one reason why we like to have a portfolio that is diversified across countries and sectors, so we can better manage these cycles to ensure a steady stream of portfolio income.
Currency movements also impact near-term dividend receipts, as the Company receives dividends from portfolio companies in local currencies and pays out dividends in sterling. All else being equal, a falling pound increases revenue receipts from Emerging Markets, and vice versa.
We believe that the integration of financially material environmental, social and governance ('ESG') considerations into our investment process improves the quality of our long-term investment decisions, and helps us build stronger, more resilient portfolios. Each stock's financially material ESG characteristics are considered at every stage of the decision-making process, starting with fundamental research, where our analysts incorporate financially material ESG considerations into their analysis to gauge the duration of a business, the quality of management and the risks posed to minority shareholders.
As income investors in emerging markets, we place particular emphasis on corporate governance, and we draw a direct link between a company's dividend policy and the quality of its governance. In our view, a company's willingness to return cash to shareholders is a tangible and positive governance indicator. We have engaged with many companies on this issue over time, to understand their motivations and capital allocation objectives. We also discuss the magnitude of returns to shareholders and the motivations behind any split between dividends and buybacks.
At present we are focused on several areas of interest. At the country level, low valuations in China have created the opportunity for us to slowly increase portfolio exposure to this market, since 2020. We are now modestly overweight, but we intend to manage this exposure quite tightly, as we recognise the risks and challenges of investment in this market, especially the ongoing drag created by the property sector, and escalating geopolitical risks. In Korea, policymakers are taking their cue from developments in Japan, and increasing their efforts to encourage companies to improve shareholders returns via increased dividends and share buybacks. We view this as a generally positive development which will drive up valuations and payout ratios, which suits our income approach very well.
At the sector level, our technology stocks have provided very good returns over the past few years, more recently thanks in part to our holdings in companies set to benefit from the AI revolution. We remain excited about the opportunities unfolding in this sector which can offer exposure to structural growth trends while also contributing to portfolio income.
So, overall, we believe the portfolio remains well-positioned to deliver a healthy level of income to shareholders, while still participating in the ongoing growth and capital gains available in emerging markets.
For and on behalf of JPMorgan Asset Management Investment Manager
Omar Negyal Isaac Thong Portfolio Managers 3rd April 2024
As at 31st January 2024
| Company | Valuation £'000 |
% of the total portfolio |
|---|---|---|
| China & Hong Kong | ||
| Inner Mongolia Yili Industrial | 11,319 | 2.5 |
| Haier Smart Home1 | 10,373 | 2.3 |
| NetEase | 9,930 | 2.2 |
| Fuyao Glass Industry1 | 7,497 | 1.7 |
| China Yangtze Power | 7,196 | 1.6 |
| China Construction Bank1 | 6,992 | 1.6 |
| Midea | 6,792 | 1.5 |
| Jiangsu Expressway1 | 6,503 | 1.5 |
| China Merchants Bank1 | 5,982 | 1.3 |
| Wuliangye Yibin | 5,550 | 1.3 |
| JD.com | 4,540 | 1.0 |
| Tingyi | 4,057 | 0.9 |
| Ping An Insurance1 | 3,714 | 0.8 |
| Huayu Automotive Systems | 3,679 | 0.8 |
| China Petroleum & Chemical1 | 3,452 | 0.8 |
| Shenzhou International | 3,426 | 0.8 |
| Zhejiang Supor | 3,016 | 0.7 |
| China Resources Gas | 2,855 | 0.6 |
| Topsports International | 2,710 | 0.6 |
| Hong Kong Exchanges & Clearing | 2,553 | 0.6 |
| China Resources Land | 1,817 | 0.4 |
| Xinyi Glass | 1,736 | 0.4 |
| Guangdong Investment | 1,328 | 0.3 |
| China Overseas Land & Investment | 571 | 0.1 |
| 117,588 | 26.3 | |
| Taiwan | ||
| Taiwan Semiconductor Manufacturing | 33,283 | 7.5 |
| Novatek Microelectronics | 8,982 | 2.0 |
| Realtek Semiconductor | 8,501 | 1.9 |
| ASE Technology | 7,741 | 1.7 |
| Vanguard International Semiconductor | 7,407 | 1.7 |
| President Chain Store | 5,842 | 1.3 |
| Eclat Textile | 5,819 | 1.3 |
| Wiwynn | 4,185 | 0.9 |
| Quanta Computer | 2,733 | 0.6 |
| Advantech | 2,687 | 0.6 |
| Nien Made Enterprise | 2,160 | 0.5 |
| Delta Electronics | 737 | 0.2 |
| 90,077 | 20.2 |
| Company | Valuation £'000 |
% of the total portfolio |
|---|---|---|
| Korea | ||
| Samsung Electronics | 17,841 | 4.0 |
| Kia | 6,313 | 1.4 |
| KB Financial | 6,116 | 1.4 |
| Shinhan Financial | 6,112 | 1.4 |
| SK Telecom | 2,843 | 0.6 |
| LG Chem Preference | 2,160 | 0.5 |
| 41,385 | 9.3 | |
| India | ||
| Infosys2 | 13,735 | 3.1 |
| HCL Technologies | 7,306 | 1.6 |
| HDFC Bank | 7,131 | 1.6 |
| Shriram Finance | 5,111 | 1.2 |
| Tata Consultancy Services | 1,964 | 0.4 |
| 35,247 | 7.9 | |
| Mexico | ||
| Kimberly-Clark de Mexico | 7,945 | 1.8 |
| Wal-Mart de Mexico | 7,565 | 1.7 |
| Grupo Financiero Banorte | 7,368 | 1.6 |
| Grupo Aeroportuario del Pacifico | 6,406 | 1.4 |
| Bolsa Mexicana de Valores | 4,078 | 0.9 |
| 33,362 | 7.4 | |
| South Africa | ||
| Sanlam | 6,756 | 1.5 |
| Bid | 4,920 | 1.1 |
| AVI | 3,750 | 0.8 |
| Bidvest | 3,692 | 0.8 |
| Standard Bank | 3,514 | 0.8 |
| FirstRand | 2,959 | 0.7 |
| Vodacom | 2,911 | 0.7 |
| Shoprite | 2,251 | 0.5 |
| JSE | 1,501 | 0.3 |
| 32,254 | 7.2 | |
| Brazil | ||
| Banco do Brasil | 6,930 | 1.5 |
| B3 SA – Brasil Bolsa Balcao | 5,743 | 1.3 |
| TIM | 4,854 | 1.1 |
| Itau Unibanco Preference | 4,479 | 1.0 |
| 22,006 | 4.9 |
1 'H' Shares.
2 Includes ADRs ('American Depositary Receipts')/GDRs ('Global Depositary Receipts').
| Valuation | % of the total |
|
|---|---|---|
| Company | £'000 | portfolio |
| Indonesia | ||
| Bank Rakyat Indonesia Persero | 12,410 | 2.8 |
| Telkom Indonesia Persero | 6,958 | 1.5 |
| 19,368 | 4.3 | |
| Thailand | ||
| Tisco Financial | 9,941 | 2.2 |
| SCB X | 5,960 | 1.3 |
| Siam Cement | 1,656 | 0.4 |
| 17,557 | 3.9 | |
| Greece | ||
| OPAP | 11,151 | 2.5 |
| 11,151 | 2.5 | |
| Saudi Arabia | ||
| Saudi National Bank | 8,715 | 1.9 |
| 8,715 | 1.9 | |
| United States | ||
| Southern Copper | 6,175 | 1.4 |
| 6,175 | 1.4 | |
| Chile | ||
| Banco Santander Chile2 | 5,207 | 1.2 |
| 5,207 | 1.2 | |
| Poland | ||
| Powszechny Zaklad Ubezpieczen | 3,443 | 0.8 |
| 3,443 | 0.8 | |
| Malaysia | ||
| Carlsberg Brewery Malaysia | 3,357 | 0.8 |
| 3,357 | 0.8 | |
| Russia | ||
| Moscow Exchange MICEX-RTS | 21 | – |
| Magnitogorsk Iron & Steel Works | 5 | – |
| Severstal | – | – |
| 26 | – | |
| Total investments | 446,918 | 100.0 |
1 'H' Shares.
2 Includes ADRs ('American Depositary Receipts')/GDRs ('Global Depositary Receipts').
At 31st January 2024
| 31st January 2024 | 31st July 2023 | ||||
|---|---|---|---|---|---|
| Portfolio | Benchmark | Portfolio | Benchmark | ||
| %1 | % | %1 | % | ||
| Financials | 29.7 | 23.1 | 28.5 | 21.6 | |
| Information Technology | 26.2 | 22.3 | 22.1 | 20.3 | |
| Consumer Discretionary | 15.1 | 12.1 | 16.8 | 14.2 | |
| Consumer Staples | 12.7 | 5.9 | 13.3 | 6.2 | |
| Communication Services | 6.2 | 8.7 | 7.5 | 9.8 | |
| Industrials | 4.1 | 6.8 | 4.7 | 6.4 | |
| Utilities | 2.5 | 2.8 | 1.2 | 2.6 | |
| Basic Materials | 2.2 | 7.5 | 2.5 | 8.3 | |
| Energy | 0.8 | 5.6 | 1.9 | 5.0 | |
| Real Estate | 0.5 | 1.6 | 1.5 | 1.8 | |
| Health Care | — | 3.6 | — | 3.8 | |
| Total | 100.0 | 100.0 | 100.0 | 100.0 |
1 Based on total investments of £446.9m (31st July 2023: £462.7m).
Geographical analysis At 31st January 2024
| 31st July 2023 | |||||
|---|---|---|---|---|---|
| 31st January 2024 | |||||
| Portfolio %1 |
Benchmark % |
Portfolio %1 |
Benchmark % |
||
| China & Hong Kong | 26.3 | 23.6 | 31.5 | 29.8 | |
| Taiwan | 20.2 | 16.5 | 17.4 | 14.7 | |
| South Korea | 9.3 | 12.3 | 10.6 | 12.4 | |
| India | 7.9 | 18.0 | 4.2 | 14.2 | |
| Mexico | 7.4 | 2.8 | 7.8 | 2.8 | |
| South Africa | 7.2 | 2.8 | 7.4 | 3.3 | |
| Brazil | 4.9 | 5.7 | 4.4 | 5.5 | |
| Indonesia | 4.3 | 2.0 | 4.0 | 1.9 | |
| Thailand | 3.9 | 1.7 | 4.1 | 2.0 | |
| Greece | 2.5 | 0.5 | 2.7 | 0.5 | |
| Saudi Arabia | 1.9 | 4.3 | 0.8 | 4.1 | |
| United States | 1.4 | 0.3 | — | 0.3 | |
| Chile | 1.2 | 0.5 | 1.3 | 0.5 | |
| Poland | 0.8 | 1.0 | 1.3 | 0.9 | |
| Malaysia | 0.8 | 1.4 | 0.8 | 1.4 | |
| United Arab Emirates | — | 1.3 | — | 1.3 | |
| Ireland | — | 1.1 | — | 0.6 | |
| Qatar | — | 0.9 | — | 0.9 | |
| Kuwait | — | 0.8 | — | 0.8 | |
| Philippines | — | 0.7 | — | 0.6 | |
| Turkey | — | 0.7 | — | 0.6 | |
| Hungary | — | 0.3 | — | 0.2 | |
| Peru | — | 0.2 | 1.4 | 0.3 | |
| Czech Republic | — | 0.2 | — | 0.2 | |
| Colombia | — | 0.1 | — | 0.1 | |
| Egypt | — | 0.1 | — | 0.1 | |
| Luxembourg | — | 0.1 | — | — | |
| United Kingdom | — | 0.1 | — | — | |
| Romania | — | — | 0.3 | — | |
| Total | 100.0 | 100.0 | 100.0 | 100.0 |
1 Based on total investments of £446.9m (31st July 2023: £462.7m).
| (Unaudited) Six months ended 31st January 2024 |
(Unaudited) Six months ended 31st January 2023 |
(Audited) Year ended 31st July 2023 |
|||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Revenue £'000 |
Capital £'000 |
£'000 | Total Revenue £'000 |
Capital £'000 |
£'000 | Total Revenue £'000 |
Capital £'000 |
Total £'000 |
|||||
| (Losses)/gains on investments held at fair value through profit or loss |
— | (13,657) | (13,657) | — | 31,809 | 31,809 | — | 21,726 | 21,726 | ||||
| Net foreign currency (losses)/gains |
— | (185) | (185) | — | 917 | 917 | — | 1,845 | 1,845 | ||||
| Income from investments | 6,919 | — | 6,919 | 7,027 | — | 7,027 | 20,604 | 348 | 20,952 | ||||
| Interest receivable and similar income |
142 | — | 142 | 133 | — | 133 | 236 | — | 236 | ||||
| Gross return/(loss) | 7,061 | (13,842) | (6,781) | 7,160 | 32,726 | 39,886 | 20,840 | 23,919 | 44,759 | ||||
| Management fee | (467) | (1,090) | (1,557) | (457) | (1,066) | (1,523) | (936) | (2,185) | (3,121) | ||||
| Other administrative expenses | (422) | — | (422) | (433) | — | (433) | (735) | — | (735) | ||||
| Net return/(loss) before finance costs and taxation |
6,172 | (14,932) | (8,760) | 6,270 | 31,660 | 37,930 | 19,169 | 21,734 | 40,903 | ||||
| Finance costs | (355) | (830) | (1,185) | (264) | (615) | (879) | (582) | (1,356) | (1,938) | ||||
| Net return/(loss) before taxation Taxation |
5,817 (558) |
(15,762) (158) |
(9,945) (716) |
6,006 (380) |
31,045 (120) |
37,051 (500) |
18,587 (1,679) |
20,378 (99) |
38,965 (1,778) |
||||
| Net return/(loss) after taxation | 5,259 | (15,920) | (10,661) | 5,626 | 30,925 | 36,551 | 16,908 | 20,279 | 37,187 | ||||
| Return/(loss) per share (note 3) | 1.78p | (5.38)p | (3.60)p | 1.90p | 10.42p | 12.32p | 5.70p | 6.84p | 12.54p |
All revenue and capital items in the above statement derive from continuing operations. No operations were acquired or discontinued in the period.
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.
The net return after taxation represents the profit or loss for the period and also the total comprehensive income.
| Called up | Capital | ||||||
|---|---|---|---|---|---|---|---|
| share | Share redemption | Other | Capital | Revenue | |||
| capital | premium | reserve | reserve1,2 | reserve2 | reserve2 | Total | |
| £'000 | £'000 | £'000 | £'000 | £'000 | £'000 | £'000 | |
| Six months ended 31st January 2024 (Unaudited) | |||||||
| At 31st July 2023 | 2,973 | 222,582 | 13 | 99,644 | 93,489 | 19,145 | 437,846 |
| Repurchase of shares into Treasury | — | — | — | (1,374) | — | — | (1,374) |
| Net (loss)/return | — | — | — | — | (15,920) | 5,259 | (10,661) |
| Dividends paid in the period (note 4) | — | — | — | — | — | (9,768) | (9,768) |
| At 31st January 2024 | 2,973 | 222,582 | 13 | 98,270 | 77,569 | 14,636 | 416,043 |
| Six months ended 31st January 2023 (Unaudited) | |||||||
| At 31st July 2022 | 2,973 | 222,582 | 13 | 100,092 | 73,210 | 17,665 | 416,535 |
| Repurchase of shares into Treasury | — | — | — | (222) | — | — | (222) |
| Net return | — | — | — | — | 30,925 | 5,626 | 36,551 |
| Dividends paid in the period (note 4) | — | — | — | — | — | (9,496) | (9,496) |
| At 31st January 2023 | 2,973 | 222,582 | 13 | 99,870 | 104,135 | 13,795 | 443,368 |
| Year ended 31st July 2023 (Audited) | |||||||
| At 31st July 2022 | 2,973 | 222,582 | 13 | 100,092 | 73,210 | 17,665 | 416,535 |
| Repurchase of shares into Treasury | — | — | — | (448) | — | — | (448) |
| Net return | — | — | — | — | 20,279 | 16,908 | 37,187 |
| Dividends paid in the year (note 4) | — | — | — | — | — | (15,428) | (15,428) |
| At 31st July 2023 | 2,973 | 222,582 | 13 | 99,644 | 93,489 | 19,145 | 437,846 |
1 The balance of the share premium was cancelled on 20th October 2010 and transferred to the 'other reserve'.
2 These reserves form the distributable reserve of the Company and may be used to fund distributions to investors.
| (Unaudited) | (Unaudited) | (Audited) | |
|---|---|---|---|
| At | At | At | |
| 31st January | 31st January | 31st July | |
| 2024 | 2023 | 2023 | |
| £'000 | £'000 | £'000 | |
| Fixed assets | |||
| Investments held at fair value through profit or loss | 446,918 | 474,971 | 462,662 |
| Current assets | |||
| Debtors | 561 | 1,150 | 3,392 |
| Cash and cash equivalents | 876 | 3,417 | 3,475 |
| 1,437 | 4,567 | 6,867 | |
| Current liabilities | |||
| Creditors: amounts falling due within one year | (16,321) | (19,742) | (31,559) |
| Net current liabilities | (14,884) | (15,175) | (24,692) |
| Total assets less current liabilities | 432,034 | 459,796 | 437,970 |
| Non current liabilities | |||
| Creditors: amounts falling due after more than one year | (15,706) | (16,246) | — |
| Provision for capital gains tax | (285) | (182) | (124) |
| Net assets | 416,043 | 443,368 | 437,846 |
| Capital and reserves | |||
| Called up share capital | 2,973 | 2,973 | 2,973 |
| Share premium | 222,582 | 222,582 | 222,582 |
| Capital redemption reserve | 13 | 13 | 13 |
| Other reserve | 98,270 | 99,870 | 99,644 |
| Capital reserve | 77,569 | 104,135 | 93,489 |
| Revenue reserve | 14,636 | 13,795 | 19,145 |
| Total shareholders' funds | 416,043 | 443,368 | 437,846 |
| Net asset value per share (note 5) | 140.9p | 149.5p | 147.7p |
| (Unaudited) Six months ended 31st January 2024 £'000 |
(Unaudited) Six months ended 31st January 20231 £'000 |
(Audited) Year ended 31st July 2023 £'000 |
|
|---|---|---|---|
| Cash flows from operating activities before finance costs | |||
| and taxation | |||
| Net (loss)/return before finance costs and taxation | (8,760) | 37,930 | 40,903 |
| Adjustment for: | |||
| Net losses/(gains) on investments held at fair value | |||
| through profit or loss | 13,657 | (31,809) | (21,726) |
| Net foreign currency losses/(gains) | 185 | (917) | (1,845) |
| Dividend income | (6,917) | (7,027) | (20,943) |
| Interest income | (134) | (117) | (216) |
| Scrip Dividends received as income | (2) | — | (9) |
| Realised (gains)/losses on foreign exchange transactions | (109) | 106 | 4 |
| Realised exchange gains on liquidity fund | 220 | 409 | 70 |
| Decrease/(increase) in accrued income and other debtors | 12 | (828) | (7) |
| (Decrease) in accrued expenses | (93) | (303) | (221) |
| Net cash outflow from operations before dividends and interest | (1,941) | (2,556) | (3,990) |
| Dividends received | 8,451 | 9,974 | 20,571 |
| Interest received | 134 | 123 | 222 |
| Overseas withholding tax recovered | 51 | 159 | — |
| Indian capital gains tax recovered/(paid) | 3 | (19) | (56) |
| Net cash inflow from operating activities | 6,698 | 7,681 | 16,747 |
| Purchases of investments | (43,505) | (72,177) | (117,620) |
| Sales of investments | 46,356 | 74,088 | 117,735 |
| Net cash inflow from investing activities | 2,851 | 1,911 | 115 |
| Dividends paid | (9,768) | (9,496) | (15,428) |
| Repurchase of shares into Treasury | (1,248) | (222) | (448) |
| Repayment of loan | — | (16,614) | (16,613) |
| Drawdown of loan | — | 16,614 | 16,613 |
| Interest paid | (1,159) | (766) | (1,786) |
| Net cash outflow from financing activities | (12,175) | (10,484) | (17,662) |
| Decrease in cash and cash equivalents | (2,626) | (892) | (800) |
| Cash and cash equivalents at start of period/year | 3,475 | 4,287 | 4,287 |
| Exchange movements | 27 | 22 | (12) |
| Cash and cash equivalents at end of period/year | 876 | 3,417 | 3,475 |
| Cash and cash equivalents consist of: | |||
| Cash and short term deposits | 229 | 1,155 | 1,291 |
| Cash held in JPMorgan US Dollar Liquidity Fund | 647 | 2,262 | 2,184 |
| Total | 876 | 3,417 | 3,475 |
For the six months ended 31st January 2023, the presentation of the Cash Flow Statement, as permitted under FRS 102, has been changed so as to present the 'reconciliation of net return before finance costs and taxation' to 'net cash inflow from operating activities' on the face of the Cash Flow Statement. Previously, this was shown by way of note to the Cash Flow Statement. Interest paid has also been reclassified to financing activities, previously shown under operating activities, as this relates to the loans drawndown. Other than changes in the presentation of certain cash flow items, there is no change to the cash flows as presented in previous periods.
| As at | Other | As at | ||
|---|---|---|---|---|
| 31st July | non-cash | 31st January | ||
| 2023 | Cash flows | charges | 2024 | |
| £'000 | £'000 | £'000 | £'000 | |
| Cash and cash equivalents | ||||
| Cash | 1,291 | (1,062) | — | 229 |
| Cash equivalents | 2,184 | (1,564) | 27 | 647 |
| 3,475 | (2,626) | 27 | 876 | |
| Borrowings | ||||
| US\$20m revolving rate loan with Mizuho maturing 2024 | (15,544) | — | (161) | (15,705) |
| US\$20m revolving rate loan with ING maturing 2025 | (15,544) | — | (162) | (15,706) |
| (31,088) | — | (323) | (31,411) | |
| Total net debt | (27,613) | (2,626) | (296) | (30,535) |
For the six months ended 31st January 2024.
The Company is a listed public limited company incorporated in England and Wales. The registered office is detailed on page 36.
The information contained within the condensed financial statements in this half year report has not been audited or reviewed by the Company's auditor.
The figures and financial information for the year ended 31st July 2023 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.
The condensed financial statements are prepared 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.
FRS 104, 'Interim Financial Reporting', issued by the Financial Reporting Council ('FRC') in March 2015, and updated in March 2018, has been applied in preparing this condensed set of financial statements for the six months ended 31st January 2024.
All of the Company's operations are of a continuing nature.
The accounting policies applied to this condensed set of financial statements are consistent with those applied in the financial statements for the year ended 31st July 2023.
| (Unaudited) Six months ended |
(Unaudited) Six months ended |
(Audited) Year ended |
|
|---|---|---|---|
| 31st January 2024 | 31st January 2023 | 31st July 2023 | |
| £'000 | £'000 | £'000 | |
| Return per share is based on the following: | |||
| Revenue return | 5,259 | 5,626 | 16,908 |
| Capital (loss)/return | (15,920) | 30,925 | 20,279 |
| Total (loss)/return | (10,661) | 36,551 | 37,187 |
| Weighted average number of shares in issue during | |||
| the period | 295,815,677 | 296,726,127 | 296,678,384 |
| Revenue return per share | 1.78p | 1.90p | 5.70p |
| Capital (loss)/return per share | (5.38)p | 10.42p | 6.84p |
| Total (loss)/return per share | (3.60)p | 12.32p | 12.54p |
| (Unaudited) | (Unaudited) | (Audited) | |
|---|---|---|---|
| Six months ended | Six months ended | Year ended | |
| 31st January 2024 | 31st January 2023 | 31st July 2023 | |
| £'000 | £'000 | £'000 | |
| 2023 fourth interim dividend of 2.3p (2022: 2.2p) | 6,813 | 6,529 | 6,530 |
| 2024 first interim dividend paid of 1.0p (2023: 1.0p) | 2,955 | 2,967 | 2,966 |
| 2023 second interim dividend paid of 1.0p | n/a | n/a | 2,966 |
| 2023 third interim dividend paid of 1.0p | n/a | n/a | 2,966 |
| Total dividends paid in the period/year | 9,768 | 9,496 | 15,428 |
All dividends paid and declared in the six months period to 31st January 2024 have been funded from the revenue reserve.
A second interim dividend of 1.0p per share, amounting to £2,944,000 has been declared and will be paid on 19th April 2024 to shareholders on the register on the record date of 8th March 2024 in respect of the year ending 31st July 2024.
| (Unaudited) | (Unaudited) | (Audited) | |
|---|---|---|---|
| Six months ended | Six months ended | Year ended | |
| 31st January 2024 | 31st January 2023 | 31st July 2023 | |
| Net assets (£'000) | 416,043 | 443,368 | 437,846 |
| Number of shares in issue | 295,372,588 | 296,657,060 | 296,482,060 |
| Net asset value per share | 140.9p | 149.5p | 147.7p |
The fair value hierarchy disclosures required by FRS 102 are given below:
| (Unaudited) | (Unaudited) | (Audited) | ||||
|---|---|---|---|---|---|---|
| Six months ended Six months ended |
Year ended | |||||
| 31st January 2024 31st January 2023 31st July 2023 |
||||||
| Assets | Liabilities | Assets | Liabilities | Assets | Liabilities | |
| £'000 | £'000 | £'000 | £'000 | £'000 | £'000 | |
| Level 1 | 446,892 | — | 474,943 | — | 462,636 | — |
| Level 31 | 26 | — | 28 | — | 26 | — |
| Total value of investments | 446,918 | — | 474,971 | — | 462,662 | — |
The Level 3 investment relates to the Company's holdings in Russian stocks.
| (Unaudited) | (Unaudited) | (Audited) | ||||
|---|---|---|---|---|---|---|
| Six months ended | Six months ended | Year ended | ||||
| 31st January 2024 | 31st January 2023 | 31st July 2023 | ||||
| Assets | Liabilities | Assets | Liabilities | Assets | Liabilities | |
| £'000 | £'000 | £'000 | £'000 | £'000 | £'000 | |
| Level 3 | ||||||
| Opening balance | 26 | 26 | 28 | 28 | 28 | 28 |
| Change in fair value of investment during the year1 | — | — | — | — | (2) | (2) |
| Closing balance | 26 | 26 | 28 | 28 | 26 | 26 |
For these Russian stocks a valuation method has been applied to the 25th February 2022 close of day prices (ie: when market was still trading normally) which have then been tapered at 99% haircut for valuation purposes.
The Company is required to make the following disclosures in its interim report.
The principal and emerging risks and uncertainties faced by the Company have not changed from those reported in the Annual Report and Financial Statements for the year ended 31st July 2023 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.
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.
The Directors believe, having considered the Company's investment objectives, risk management policies, capital management policies and procedures, nature of the portfolio 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 Directors have considered the impact of the ongoing Russia-Ukraine and Hamas-Israel conflicts on the Company's financial, operational position and market conditions. The Directors have also reviewed the Company's compliance with debt covenants. In addition, the Board noted the full support from 100% of voting shareholders for the continuation vote at the Company's Annual General Meeting held in November 2021 and does not anticipate any changes to these views for the forthcoming Annual General Meeting in November 2024. For these reasons, they consider it reasonable to continue to adopt the going concern basis in preparing the financial statements.
The Board of Directors confirms that, to the best of its knowledge:
In order to provide these confirmations, and in preparing these financial statements, the Directors are required to:
and the Directors confirm that they have done so.
For and on behalf of the Board
Elisabeth Scott
Chair 3rd April 2024
Alternative Performance Measures ('APMs') are numerical measures of current, historical or future financial performance, financial position or cash flow that are not GAAP measures. APMs are intended to supplement the information in the financial statements, providing useful industry-specific information that can assist shareholders to better understand the performance of the Company.
Where a measure is labelled as an APM, a definition and reconciliation to a GAAP measure is set out below:
Total return to the shareholders, on a last traded price to last traded price basis, assuming that all dividends received were reinvested, without transaction costs, into the shares of the Company at the time the shares were quoted ex-dividend.
| Six months ended | |||
|---|---|---|---|
| 31st January | |||
| Total return calculation | Page | 2024 | |
| Opening share price (p) | 6 | 134.0 | (a) |
| Closing share price (p) | 6 | 124.0 | (b) |
| Total dividend adjustment factor1 | 1.026752 | (c) | |
| Adjusted closing share price (d = b x c) | 127.3 | (d) | |
| Total return to shareholders (e = d / a – 1) | –5.0% | (e) |
1 The dividend adjustment factor is calculated on the assumption that the dividends paid out by the Company are reinvested into the shares of the Company at the last traded price quoted at the ex-dividend date.
Total return on net asset value ('NAV') per share, on a bid value to bid value basis, assuming that all dividends paid out by the Company were reinvested, without transaction costs, into the shares of the Company at the NAV per share at the time the shares were quoted ex-dividend.
| Six months ended | |||
|---|---|---|---|
| 31st January | |||
| Total return calculation | Page | 2024 | |
| Opening cum-income NAV per share (p) | 6 | 147.7 | (a) |
| Closing cum-income NAV per share (p) | 6 | 140.9 | (b) |
| Total dividend adjustment factor1 | 1.023402 | (c) | |
| Adjusted closing cum-income NAV per share (d = b x c) | 144.2 | (d) | |
| Total return on net assets (e = d / a – 1) | –2.4% | (e) |
1 The dividend adjustment factor is calculated on the assumption that the dividends paid out by the Company are reinvested into the shares of the Company at the cum-income NAV at the ex-dividend date.
The value of the Company's net assets (total assets less total liabilities) divided by the number of ordinary shares in issue. Please see note 5 on page 26 for detailed calculations.
Total return on the benchmark, on a closing-market value to closing-market value basis, assuming that all dividends received were reinvested, without transaction costs, in the shares of the underlying companies at the time the shares were quoted ex-dividend.
The benchmark is a recognised index of stocks which should not be taken as wholly representative of the Company's investment universe. The Company's investment strategy does not follow or 'track' this index and consequently, there may be some divergence between the Company's performance and that of the benchmark. The Company's benchmark is the MSCI Emerging Markets Index, with net dividends reinvested, in sterling terms.
Gearing represents the excess amount above shareholders' funds of total investments, expressed as a percentage of the shareholders' funds. If the amount calculated is negative, this is shown as a 'net cash' position.
| 31st January | 31st July | |||
|---|---|---|---|---|
| 2024 | 2023 | |||
| Gearing calculation | Page | £'000 | £'000 | |
| Investments held at fair value through profit or loss | 22 | 446,918 | 462,662 | (a) |
| Net assets | 22 | 416,043 | 437,846 | (b) |
| Gearing/(net cash) (c = a / b – 1) | 7.4% | 5.7% | (c) |
The ongoing charges represent the Company's management fee and all other operating expenses excluding finance costs payable, expressed as a percentage of the average of the daily cum-income net assets during the year and is calculated in accordance with guidance issued by the Association of Investment Companies.
The figure as at 31st January 2024 is an estimated annualised figure based on the actual figures for the six months ended 31st January 2024.
| Six months ended | Year ended | |||
|---|---|---|---|---|
| 31st January | 31st July | |||
| 2024 | 2023 | |||
| Ongoing charges calculation | Page | £'000 | £'000 | |
| Management Fee | 20 | 3,114 | 3,121 | |
| Other administrative expenses | 20 | 844 | 735 | |
| Total management fee and other administrative expenses | 3,958 | 3,856 | (a) | |
| Average daily cum-income net assets | 415,346 | 420,583 | (b) | |
| Ongoing charges (c = a / b) | 0.95% | 0.92% | (c) |
If the share price of an investment trust is lower than the NAV per share, the shares are said to be trading at a discount. The discount is shown as a percentage of the NAV per share.
The opposite of a discount is a premium. It is more common for an investment trust's shares to trade at a discount than at a premium (page 6).
| Six months ended | Year ended | |||
|---|---|---|---|---|
| 31st January | 31st July | |||
| 2024 | 2023 | |||
| Page | £'000 | £'000 | ||
| Share price (p) | 6 | 124.0 | 134.0 | (a) |
| Net assets value per share (p) | 6 | 140.9 | 147.7 | (b) |
| Discount (c = (a – b)/b) | (12.0)% | (9.3)% | (c) |
The return/(loss) per ordinary share represents the return/(loss) after taxation divided by the weighted average number of ordinary shares in issue during the year.
Companies incorporated in mainland China and listed in Hong Kong and on other foreign exchanges.
Certificates that are traded on US stock exchanges representing a specific number of shares in a non-US company. ADRs are denominated and pay dividends in US dollars and may be treated like regular shares of stock.
For the purposes of the investment policy, emerging markets are the capital markets of developing countries, including both recently industrialised countries and countries in transition from planned economies to free-market economies. Many, but not all, emerging market countries are constituents of the MSCI Emerging Markets Index or, in the case of smaller or less developed emerging markets, the MSCI Frontier Index. The Company invests in securities listed in, or exposed to, these countries or other countries that meet the definition in this paragraph. These markets will tend to be less mature than developed markets and will not necessarily have such a long history of substantial foreign investment.
You can invest in a J.P. Morgan investment trust, including the Company, through the following:
Third party providers include:
| AJ Bell Investcentre |
|---|
| Barclays Smart investor |
| Bestinvest |
| Charles Stanley Direct |
| Close brothers A.M. Self |
| Directed Service |
| Fidelity Personal Investing |
| Freetrade |
| Halifax Share Dealing |
Hargreaves Lansdown iDealing IG Interactive investor IWeb ShareDeal active Willis Owen X-O.co.uk
Please note this list is not exhaustive and the availability of individual trusts may vary depending on the provider. These are third party providers and the Company does not endorse or recommend any. Please observe each provider's privacy and cookie policies as well as their platform charges structure.
The Board encourages all of its shareholders to exercise their rights by voting at general meetings and attending if able to do so. If your shares are held through a platform, your platform provider will provide shareholders with the ability to receive company documentation, to vote their shares and to attend general meetings, at no cost. Please refer to your investment platform for more details, or visit the Association of Investment Companies' website at
https://www.theaic.co.uk/how-to-vote-your-shares for information on which platforms support these services and how to utilise them.
Professional advisers are usually able to access the products of all the companies in the market and can help you find an investment that suits your individual circumstances. An adviser will let you know the fee for their service before you go ahead. You can find an adviser at unbiased.co.uk
You may also buy investment trusts through stockbrokers, wealth managers and banks.
To familiarise yourself with the Financial Conduct Authority adviser charging and commission rules, visit fca.org.uk
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The Company currently conducts its affairs so that the shares issued by the Company can be recommended by independent financial advisers to ordinary retail investors in accordance with the FCA's rules in relation to non-mainstream investment products and intends to continue to do so for the foreseeable future. The shares are excluded from the FCA's restrictions which apply to non-mainstream investment products because they are shares in an investment trust. The Company's ordinary shares are not considered to be 'complex instruments' under the FCA's 'Appropriateness' rules and guidance in the COB sourcebook.
The Investment Manager has conducted an annual value assessment on the Company in line with FCA rules set out in the Consumer Duty regulation. The assessment focuses on the nature of the product, including benefits received and its quality, limitations that are part of the product, expected total costs to clients and target market considerations. Within this, the assessment considers quality of services, performance of the Company (against both the Benchmark and peers), total fees (including management fees and entry and exit fees as applicable to the Company), and also considers whether all consumers, including vulnerable consumers, are able to receive fair value from the product. The Investment Manager has concluded that the Company is providing value based on the above assessment.
As a listed Investment Trust, the Company is exempt from Task Force on Climate-related Financial Disclosures ('TCFD') disclosures. However, in accordance with the requirements of the TCFD, on 30th June 2023, the Investment Manager published its first UK TCFD Report for the Company in respect of the year ended 31st December 2022. The report discloses estimates of the portfolio's climate-related risks and opportunities according to the FCA Environmental, Social and Governance Sourcebook and the TCFD Recommendations. The report is available on the Company's website: www.jpmglobalemergingmarketsincome.co.uk
The Company is an investment trust which was launched in July 2010 with assets of £102.3 million.
Elisabeth Scott (Chair) Mark Edwards Caroline Gulliver Lucy Macdonald Ranjan Ramparia (with effect from 1st March 2024)
Company number: 7273382 LEI: 549300OPJXU72JMCYU09
ISIN: GB00B5ZZY915 Bloomberg code: JEMI SEDOL: B5ZZY91
The Company's unaudited NAV is published daily, via the London Stock Exchange.
The Company's shares are listed on the London Stock Exchange. The market price is shown daily in the Financial Times, The Times, The Daily Telegraph, The Scotsman and on the Company's website at
www.jpmglobalemergingmarketsincome.co.uk, where the share price is updated every fifteen minutes during trading hours.
The Company's shares may be dealt in directly through a stockbroker or professional adviser acting on an investor's behalf.
JPMorgan Funds Limited
60 Victoria Embankment London EC4Y 0JP Telephone: 0800 20 40 20 or +44 1268 44 44 70 email: [email protected]
For company secretarial and administrative matters please contact Emma Lamb using the above form of contact methods, or via the Company's website through the 'Contact Us' link.
The Bank of New York Mellon (International) Limited 160 Queen Victoria Street London EC4V 4LA
The Depositary employs JPMorgan Chase Bank, N.A. as the Company's custodian.
Equiniti Limited Reference 3570 Aspect House Spencer Road Lancing West Sussex BN99 6DA
Telephone number: +44 (0)371 384 2945
Lines open 8.30 a.m. to 5.30 p.m. Monday to Friday. Calls to the helpline will cost no more than a national rate call to a 01 or 02 number. If calling from outside of the UK, please ensure the country code is used.
Notifications of changes of address and enquiries regarding share certificates or dividend cheques should be made in writing to the Registrar quoting reference 3570. Registered shareholders can obtain further details on their holdings on the internet by visiting www.shareview.co.uk.
Computershare Investor Services Plc will be replacing Equiniti as the Company's Registrar later this year. Further information including full contact details will be made available to shareholders nearer the time and will be incorporated into all future shareholder communications following the transition.
Mazars LLP The Pinnacle 160 Midsummer Boulevard Milton Keynes MK9 1FF
Winterflood Securities Riverbank House 2 Swan Lane London EC4R 3GA Telephone number: 020 3100 0000
A member of the AIC
60 Victoria Embankment London EC4Y 0JP Freephone: 0800 20 40 20 Calls from outside the UK: +44 1268 44 44 70 Website: www.jpmglobalemergingmarketsincome.co.uk
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