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JPMorgan Global Emerging Markets
Income Trust
Annual General Meeting
28th November 2013
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JPMorgan Global Emerging Markets Income Trust plc
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31st July 2012 – 31st July 2013
Portfolio return 15.8%
Index 5.4%
Return to shareholders 12.1%
Return on net assets 14.7%
Dividend 4.9p
31st July 2013 – 31st October 2013
Portfolio return 0.8%
Index 3.6%
Ordinary share price return 3.4%
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
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Source: J.P. Morgan Asset Management
JPMorgan Global Emerging Markets Income Trust – Attribution analysis
Brazil
Thailand
Turkey
Korea
China
Taiwan
Mexico
Indonesia
Qatar
Poland
Malaysia
Czech Republic
Russia
Philippines
India
South Africa
Saudi Arabia
-1.0 0.0 1.0 2.0
Total effectAsset AllocationStock Selection
1.82%
1.61%
1.41%
0.95%
0.85%
0.82%
0.60%
0.58%
0.43%
0.36%
0.13%
0.11%
0.11%
-0.08%
-0.11%
-0.35%
-0.78%
Trust (%) Return (%) Index (%) Contribution
Advanced Info Service 1.6 52.7 0.2 0.86
Arcelik 2.0 43.0 0.0 0.74
SJM Holdings 1.8 51.2 0.0 0.71
Ford Otomotiv 1.5 62.2 0.0 0.66
Novatek Microelectronics 1.6 56.4 0.1 0.63
Foschini Group 1.5 -37.3 0.1 -0.71
SAFCO 1.3 -20.8 0.0 -0.60
Tencent 0.0 57.3 1.0 -0.42
CTEEP 0.1 -43.3 0.0 -0.40
Indo Tambangraya 0.9 -34.4 0.0 -0.37
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 2013. 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
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Sector Breakdown as of 30th September 2013
Country Breakdown as of 30th September 2013
Sector and country breakdown
Telecommunica-tion Services
Consumer Discre-tionary
Industrials Energy Utilities Consumer Staples Health Care Materials Information Technology
Financials
-10
0
10
20
30
18
.2
15
.4
10
.7 11
.9
2.6
8.2
0.0
7.3
12
.2
19
.5
7.6 8.8
6.2
11
.9
3.2
8.9
1.5
9.8
15
.1
27
.0
11.6
6.5
4.4
0.0
-0.6
-0.7
-1.5
-2.5
-2.9
-7.4
Fund Index Difference
So
uth
Afr
ica
Tu
rke
y
Sa
ud
i Ara
bia
Ta
iwa
n
Ru
ssia
Ch
ina
Qa
tar
Ka
zakh
sta
n
Bra
zil
UA
E
Po
lan
d
Th
aila
nd
Ph
ilip
pin
es
Ind
on
esi
a
Ch
ile
Ma
lays
ia
Ind
ia
Me
xico
Ko
rea
-15
-5
5
15
25
16
.4
6.7
3.7
13
.6
8.1
21
.2
1.7 1.6
12
.9
0.9 2
.6 3.1
1.2 2.4
0.0 0.8 2.6
1.0 5
.57.5
1.7 0.0
11
.5
6.2
19
.4
0.0 0.0
11
.6
0.0
1.7 2
.5
0.9 2.3 1.7 3.7 5
.8
5.1
15
.9
9.0
4.9
3.7
2.1
1.9 1.8
1.7 1.6 1.3
0.9 0
.9
0.6
0.3
0.0
-1.7
-3.0
-3.3
-4.1
-10
.4
Fund % Index % Difference %
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 30th September 2013
Stock Country Sector % Yield (%)
Delta Electronics Taiwan Information Technology 2.21 3.7
Bank Of China China Financials 2.20 6.4
Imperial Holdings South Africa Consumer Discretionary 2.09 4.1
Wynn Macau China Consumer Discretionary 2.06 6.1
Bidvest Group South Africa Industrials 2.06 2.8
Sberbank Russia Financials 2.05 2.4
Coal India India Energy 2.04 4.9
Banco Do Brasil Brazil Financials 2.02 9.0
Lukoil Russia Energy 1.98 4.9
Cielo Brazil Information Technology 1.97 3.3
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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.
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A broad investment universeGreater 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 2013. 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
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Powerful combination of Income & Growth
Source: J.P. Morgan Asset Management. For illustrative purposes only. Yields as at end September 2013.
PZU: a dominant Insurance company in
Poland, steady 7% yield
Low dividend yield Target dividend yield High Dividend Yield
( <3% ) ( 3-6% ) ( >6% )
TARGET60% of portfolio
TARGET20% of portfolio
TARGET20% of portfolio
Bidvest: global food logistics operator based
in South Africa, 2.8% yield with mid-teens
growth projected
Ethiad Etisalat: Saudi mobile operator5.3% yield with
progressive dividend policy
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Market update and outlook
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Recent coverage of Emerging Markets…
Source: Financial Times, Shutterstock. Images for illustrative purposes only.
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Jan-1990 Jan-1992 Jan-1994 Jan-1996 Jan-1998 Jan-2000 Jan-2002 Jan-2004 Jan-2006 Jan-2008 Jan-2010 Jan-2012
0
100
200
300
400
500
600
700
800
900
1000
EM EPS (Fwd)EM DPSDM EPS (Fwd)DM DPS
MSCI Emerging Markets Index: long term growth in dividends and earnings
Index, 100 = Jan 1990
EPS DPS
Emerging Markets 10.4% 14.8%
Developed Markets 7.7% 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 2013. Past performance is not an indication of future performance. EPS – Earnings per share. DPS – Dividends per share
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0.75
1.00
1.25
1.50
1.75
2.00
2.25
2.50
2.75
3.00
Source: Bloomberg, Factset, UBS, Data as at 30 October 2013. MSCI Emerging Markets index. GEM Price-to-Book: 1993 – October 2013
Neutral
Pessimistic
Optimistic
Euphoric
Panic
Our standard valuation metric looks attractive
Valuation
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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
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J.P. Morgan Asset Management
Luke Richdale, Client Portfolio Manager – Emerging Markets Equities
+44 (0) 20 7742 8535
Claire Peck, Client Portfolio Manager – Emerging Markets Equities
+44 (0) 20 7742 3512
Contact
Emily Whiting, Client Portfolio Manager – Emerging Markets Equities
+44 (0) 20 7742 3508
Eric Bian, Client Portfolio Manager – Emerging Markets Equities
+44 (0) 20 7742 4036
Please note, telephone lines may be recorded and monitored for security and training purposes.
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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.
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J.P. Morgan Asset Management
This is a promotional document and as such the views contained herein are not to be taken as an advice or recommendation to buy or sell any investment or interest thereto. Reliance upon information in this material is at the sole discretion of the reader. 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 you. It should be noted that the value of investments and the income from them may fluctuate in accordance with market conditions and taxation agreements and investors may not get back the full amount invested. Changes in exchange rates may have an adverse effect on the value, price or income of the product(s) or underlying overseas investments. Both past performance and yield may not be a reliable guide to future performance. There is no guarantee that any forecast made will come to pass. Furthermore, whilst it is the intention to achieve the investment objective of the investment product(s), there can be no assurance that those objectives will be met. J.P. Morgan Asset Management is the brand name for the asset management business of JPMorgan Chase & Co and its affiliates worldwide. You should note that if you contact J.P. Morgan Asset Management by telephone those lines may be recorded and monitored for legal, security and training purposes. You should also take note that information and data from communications with you will be collected, stored and processed by J.P. Morgan Asset Management in accordance with the EMEA Privacy Policy which can be accessed through the following website http://www.jpmorgan.com/pages/privacy. Investment is subject to documentation which is comprised of the Prospectus, Key Investor Information (KIID) and either the Supplementary Information Document (SID) or Key Features/Terms and Condition, copies of which can be obtained free of charge from JPMorgan Asset Management Marketing Limited. Issued by JPMorgan Asset Management Marketing Limited which is authorised and regulated in the UK by the Financial Conduct Authority. Registered in England No: 288553. Registered address: 25 Bank St, Canary Wharf, London E14 5JP.
