If you’re searching for income, investing in dividend-paying companies is key. Those who care more about growth tend to be attracted to ‘hot’ sectors or markets, such as developing economies. But what if you could combine dividend income with emerging-market growth?
JPMorgan’s Global Emerging Markets Income Trust (LSE: JEMI) does just that, says Moira O’Neill in Investors Chronicle. It aims to generate both dividend income and long-term capital growth by investing in companies in the MSCI Emerging Markets Index that pay a dividend.
Run by Richard Titherington, chief investment officer of JPMorgan’s emerging-markets business, the fund launched in July 2010 and has delivered a return over one year of 22.2%. It also boasts a 4% yield. The price for this performance is 1% of net assets, plus a performance fee of 10% of any outperformance over its benchmark index, giving a total expense ratio (TER) of 1.31%.
Around 12% of Titherington’s fund is invested in Taiwanese equities, with 11.9% in international equities, 11.3% in Brazilian shares and 8.7% in South African shares. Most of its holdings are telecom, infrastructure and utility shares.
Titherington believes emerging-market firms now “offer greater transparency and are more disciplined in both investing in their future and paying dividends”. As JPMorgan’s Claire Peck tells Interactive Investor: “The power of an equity income strategy has been well documented in developed markets and we are very comfortable with the concept in Britain. The same is true in emerging markets.”
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JP Morgan Global EM Trust top ten holdings
| Name of holding | % of assets |
|---|---|
| Arçelik | 2.3% |
| Saudi Arabian Fertiliser Co. | 2.3% |
| Bank of China | 2.2% |
| Lukoil OAO | 2.1% |
| Comp. de Conc. Rodoviáras | 2.1% |
| Quant a Computer Inc | 2.1% |
| Turkiye Petrol Rafinerileri AS | 2.0% |
| Mobile Telesystems OJSC | 2.0% |
| Commercial Bank of Qatar | 2.0% |
| Philippine Long Distance Tele. | 1.9% |