JPMorgan Global Emerging Markets Income Trust Annual General Meeting 24 th November 2016 Omar Negyal, Executive Director Portfolio Manager omar.r.negyal@jpmorgan.com Jeffrey Roskell, Managing Director Portfolio Manager jeffrey.roskell@jpmorgan.com
JPMorgan Global Emerging Markets Income Trust plc 1
Performance JPMorgan Global Emerging Markets Income Trust plc as of 30 th September 2016 – 12 month rolling returns 30/09/15 to 30/09/14 to 30/09/13 to 30/09/12 to 30/09/11 to (%) 30/09/16 30/09/15 30/09/14 30/09/13 30/09/12 43.02% -23.12% 5.10% 10.70% 17.46% Share price Net asset value 36.72% -16.98% 3.62% 10.73% 22.24% 36.18% -13.61% 4.19% 0.69% 12.81% MSCI Emerging Markets Net Index Past performance is not necessarily a reliable indicator for current and future performance. Source: Morningstar. J. P. Morgan Asset Management. Inception: July 2010. Benchmark: MSCI Emerging Markets Net. Performance data has been calculated on NAV to NAV basis including ongoing charges and any applicable fees, with any income reinvested, in GBP. Please note Benchmark indices do not include fees or operating expenses and are not available for actual investment. 2
JPMorgan Global Emerging Markets Income Trust - Performance Emerging market equities delivered a strong positive return in 31 st July 2015 – 31 st July 2016 the 12 months to 31st July 2016 Equities and currencies have strengthened slightly from Portfolio return +18.3% cheap levels as sentiment has improved Index +16.7% Emerging market dividends remain under pressure, as Return to shareholders +21.3% companies struggle to increase their payouts against a challenging growth backdrop Return on net assets +16.9% The Company’s approach, which is to invest in a diversified Dividend* 4.90p portfolio of relatively high-yielding stocks to receive dividends from across sectors and countries, remains unchanged. Past performance is not necessarily a reliable indicator for current and future performance. Source: Annual Report and Accounts. J.P. Morgan Asset Management. Data as of 31 st July 2016. The opinions and views expressed here are those held by the author as at date of this document, which are subject to change and are not to be taken as or constructed as investment advice. Past performance is not an indication of future performance. * Total Dividend for last financial year (per share) . 3
What do we need to understand? Key questions Return on Equity (ROE) Dividend yield Free cash flow Dividend sustainability Dividend policy Growth over 5 years 4
Diversified combination of Income & Growth AVI : A South African food products Moneta Bank: Czech Republic Delta Electronics : Taiwanese IT company whose brands span financial with consumer lending tilt, company which has successfully everything from hot beverages to yielding close to 7%. evolved its business mix over time. frozen convenience foods. Dividend payout 80%. Target Target Target 60% of portfolio 20% of portfolio 20% of portfolio Low dividend yield Target dividend yield High Dividend Yield ( <3% ) ( 3-6% ) ( >6% ) Source: J.P. Morgan Asset Management. 12 month yield , Eikon, data as of September 2016 .For illustrative purposes only. For a representative account. 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 hold positions on behalf of its clients in any or all of the aforementioned securities. Diversification does not guarantee investment returns and does not eliminate the risk of loss. 5
Portfolio characteristics JPMorgan Global Emerging Markets Income Trust plc as of 30 th September 2016 Portfolio Fund Index Price to earnings (forward) 12.7x 12.3x Price to book 2.5x 1.6x *Gross prospective dividend yield 5.0% 2.8% Return on equity 19.8 12.9 **Net Debt to Equity 18% 31% Beta 0.94 (1.00 geared) Holdings 70 817 Active share 89.8 Source: UBS PAS, PRISM The Fund 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. The portfolio 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. *Portfolio yield is the aggregate weighted sum of the stock level yields which are calculated (12-month forward DPS / Current price)*100. **Net debt to equity ratio excludes financials. 6
Performance attribution Stock: +0.06 JPMorgan Global Emerging Markets Income Trust plc – 12 months to 31 st July 2016 Attribution summary Country: +0.42 MSCI Emerging Markets Benchmark Index (Net) Country attribution (%) Relative Stock Impact Top Contributors weight (%) return (%) (%) Vanguard Intl Semiconductor 2.06 90.53 1.24 Taiwan (o) 3.18 China (u) 1.63 Siliconware Precision 1.50 68.29 1.19 Industries Turkey (o) 0.53 Mexico (u) 0.53 Bidvest 1.98 86.79 0.70 Greece (u) 0.34 Engie Brasil Energia 1.58 49.78 0.52 Hungary (o) 0.31 Malaysia (u) 0.13 Tofas 1.71 46.08 0.50 Russia (o) 0.06 Relative Stock Impact Czech Republic (o) -0.27 Top Detractors weight (%) return (%) (%) Brazil (o) -0.32 Saudi Arabia (o) -0.60 Samsung Electronics -2.80 35.01 -1.32 India (u) -0.71 Advanced Info Service Public 0.74 -44.06 -1.10 Stock selection Thailand (o) -0.91 Asset allocation South Africa (o) Tencent Holdings -2.95 51.79 -0.96 -1.32 South Korea (u) -1.43 MTN 0.20 -50.79 -0.76 Cash (o) -0.17 China Resources Power 1.32 -22.12 -0.64 -5.0 -2.5 0.0 2.5 5.0 Source: J.P. Morgan Asset Management, MSCI, Factset, gross of fees in GBP to 31 st July 2016. Data for Total Attribution shown (stock selection plus country allocation). Attribution may not match official returns due to differences in systems, rounding. The Fund 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. 7
JPMorgan Global Emerging Markets Income Trust – Stock holdings ...and one that didn’t work: One that worked: Turkcell Vanguard International Semiconductor Taiwanese Information Technology company, with minority ownership by TSMC Turkish telecommunication company Beneficiary of the semiconductor outsourcing trend Dividend was not ratified at the AGM, causing dividend stream Cash accounts for 70% of balance sheet uncertainty Management place a strong emphasis on the dividend – Given this dividend disappointment, we sold this position current yield is 5% Source: Bloomberg. Company accounts. Data as of November 2016. 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. There is no guarantee that any forecast made will come to pass. 8
Portfolio positioning in key markets 10.0 10.0 Structural underweight in 5.0 Brazilian India 5.0 companies have 0.0 Low payout legal obligation ratios with to pay out 25% expensive 0.0 -5.0 valuations Fund Index +/- Fund Index +/- % % % % 10.0 We own 20.0 8.0 consumer MSCI Russia names, 10.0 6.0 has 6.6% yield telecoms, utilities 4.0 so selective 0.0 Avoid banks, low opportunities 2.0 profitability available 0.0 -10.0 cyclicals, Fund Index +/- Fund Index +/- internet, property % % % % Largest overweight Taiwan – particularly Information Technology Other Key Markets Largest underweight China – no state owned enterprises (SOEs) or internet held Data as of 30 th September 2016. Source: J.P. Morgan Asset Management. ’Any research in this document has been obtained and may have been acted upon by J.P. Morgan Asset Management for its own purpose. The results of such research are being made available as additional information and do not necessarily reflect the views of J.P.Morgan Asset Management. Any forecasts, figures, opinions, statements of financial market trends or investment techniques and strategies expressed are unless otherwise stated, J.P. Morgan Asset Management’s own at the date of this document. They are considered to be reliable at the time of writing, may not necessarily be all-inclusive and are not guaranteed as to accuracy. They may be subject to change without reference or notification to the investor/prospect 9
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