10th Apr 2019 11:46
LONDON (Alliance News) - JPMorgan Global Emerging Markets Income Trust PLC on Wednesday reported a fall in net assets in the first half, though still outperformed its benchmark.
At January 31, the trust's NAV per share stood at 131.5 pence compared to 134.6p at July 31, a 2.3% decease.
In the six months to the end of January, JPMorgan Global Emerging Markets Income net assets also decreased 2.3% to USD390.4 million from USD399.5 million.
The trust's total return in the period was positive 4.1% compared to its benchmark, the MSCI Emerging Markets Index, losing 2.9% in the period.
During the period, the trust declared two interim dividends of 1.0p, in line with the year before.
Chair Sarah Fromson said: "The six months saw volatility in both developed and emerging equity markets, driven largely by concerns over global growth, a potential trade war between the US and China and uncertainty around policy tightening in the US. This was a period of weakness across almost all equity markets - and emerging equity markets were not immune. Against this backdrop, our company's income strategy, due to its 'value with quality' characteristics, performed better than the benchmark index."
The trust attributed its outperformance against the benchmark to stock selection.
"Strong performance from China Overseas Land and Investment and China Resources Power boosted performance and mitigated the negative impact of holdings in the China A share market, such as SAIC Motor. Six months ago, we noted the negative impact to relative performance of not holding leading e-commerce names Alibaba and Tencent which offer little to no yield and do not fit our investment criteria. However, both were weak over the last six months so their absence from the portfolio was positive this time, on a relative basis," said Investment Managers Omar Negyal, Jeffrey Roskell and Amit Mehta.
The trust's largest holding, Taiwan Semiconductor Manufacturing Co, performed well in the period, with the managers saying: "The portfolio's Taiwanese stocks contributed positively to performance as its markets did not suffer the same degree of market sell-off as other Asian economies."
Fromson added: "Although it is encouraging to note that equity markets have recovered significantly from their lows towards the end of 2018, emerging markets still face challenges. Investors remain concerned about the potential for a US-China trade or tariff war and the global pace and extent of interest rate increases. In this environment, the investment managers remain generally positive about the underlying fundamentals of the company's investments and their outlook for income from emerging markets equities over 2019."
Shares in JPMorgan Global Emerging Markets Income were up 0.8% Wednesday at 134.36 pence each.
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