JPMorgan EMEA trust posts big NAV gains, but the share price premium shouts “handle with care”
JPMorgan Emerging Europe, Middle East & Africa Securities PLC (JEMA) has reported strong full-year results to 31 October 2025. Net asset value (NAV) total return was up 25.5%, beating the S&P Emerging Europe, Middle East & Africa BMI Net Return in GBP by 6.0 percentage points. Stock picking did the heavy lifting, with asset allocation also helping.
The share price was the headline grabber: up 79.6% on a total return basis, finishing the period at 216.0p and recently quoted at 246.0p (28 January 2026). That outsized move is tied to a highly unusual and risky valuation backdrop – a massive premium to NAV – as the market continually reassesses the odds of recovering value from sanctioned Russian assets.
Why the premium is so high – and why it matters
At 31 October 2025, JEMA’s shares traded at a 230.8% premium to NAV, rising to 242.8% by 28 January 2026. In plain English: the market price is more than triple the underlying asset value per share (65.3p).
Two key points:
- The Board explicitly says the premium likely reflects different views on the Russian asset valuation and should not be read as a sign that recovery is more likely.
- Discount control (buybacks) remains suspended, and the previously signalled tender commitment tied to the old Russia benchmark has been withdrawn. In short, there’s no near-term mechanism to pull the premium back towards NAV.
Opinion: This is not your typical investment trust premium. It’s a binary, litigation-and-sanctions-driven “optionality” premium. Great if things break right, brutal if they don’t. Know what you own.
Russian assets: legal battles, ‘S’ account cash, and deep uncertainty
Where the legal cases stand
VTB’s $439.5 million claim in Russia against several J.P. Morgan entities and JEMA has been upheld by the court, though not enforced yet. VTB has also filed additional claims of $81.3 million, $74.5 million and €108 million, while Sberbank has a $830,183 claim. Proceedings continue. The potential insolvency of J.P. Morgan’s Russian sub-custodian remains a risk if enforcement goes ahead, with knock-on implications for servicing client assets.
Russian Decree 8 has so far protected client securities and rouble cash in ‘S’ type accounts from post-3 January 2024 court decisions, but the situation is dynamic. The Board also flags Presidential Decree 442 (May 2024) setting a framework to compensate the Russian state for “unfriendly” actions – detailed procedures are still not published.
What is an ‘S’ account and what’s in it?
An ‘S’ account in Moscow holds dividends and proceeds from sanctioned Russian securities that cannot be remitted. JEMA does not recognise these sums in the NAV or income statement.
- Balance attributed to JEMA as at 23 January 2026: approximately £54.2 million.
- Further announced but not yet credited: £2.4 million.
- Total dividends received or announced: £56.6 million.
- Separate VTB 2024 dividend claim case ongoing; c. £0.9 million due but not received.
Context: Russian investments were 5.7% of the portfolio’s written-down value at year-end, and JEMA applies a 99% provision to value these assets. The Board is clear that realising any value remains highly uncertain.
Dividend nudged up, income resilient, costs trending lower
Net revenue after tax rose to £247,000 (2024: £225,000), with revenue EPS at 0.61p (2024: 0.56p). The Board will recommend a 0.6p dividend (2024: 0.5p), fully covered by net revenue.
- Ex-dividend: 12 February 2026
- Record date: 13 February 2026
- Payment date: 20 March 2026 (subject to approval)
Costs: the ongoing charge fell to 3.3% annualised (from 4.2%), helped by a reduction in custody fees on Russian assets from 1 August 2024. The management fee excludes the value of Russian holdings.
What drove performance: banks, gold, Greece
Stock selection was the star. Overweights in Greek banks (Alpha Bank, National Bank of Greece, Piraeus Bank) and positions in Halyk Bank and Slovenia’s Nova Ljubjanska Bank did the business. Gold Fields and Kazatomprom benefited from a strong precious metals and uranium backdrop, and underweighting expensive Saudi utility ACWA helped.
Detractors included Kaspi, which derated after a disappointing acquisition; avoiding MTN and Orlen also hurt as those shares rallied for idiosyncratic reasons.
Portfolio shape and themes
As at year-end, the portfolio held 92 names (25 Russian), sharpened from 106 last year. Geographic skew leans into:
- South Africa – 25.6%
- Saudi Arabia – 20.5%
- United Arab Emirates – 12.7%
Three structural themes underpin stock selection:
- Commodity sensitivities – including gold and platinum exposure (Gold Fields, Valterra Platinum).
- Mass market consumption – examples include Greek consumer brand group Sarantis.
- Technology adopters – e.g., Benefit Systems in CEE; out-of-index holdings in Kazakhstan banks Kaspi and Halyk.
Positioning skews overweight Greece, Kazakhstan and South Africa; underweight Turkey and Saudi Arabia. Sector-wise, Financials, Materials and Energy lead, with six banks and two miners in the top 10 holdings.
Market backdrop: volatile, but EMEA outperformed
EMEA markets were strong overall despite sharp swings tied to US trade policy gyrations. Gold hit records and supported South African miners. Oil stayed weak, weighing on Saudi equities. IPO activity cooled relative to prior years.
Looking ahead, the managers expect portfolio EPS growth of 5-10% in 2026 (versus higher market consensus) and argue EMEA’s low correlation to “AI bubble” risks could be helpful if US mega-cap tech wobbles.
Key numbers at a glance
| NAV total return (FY to 31 Oct 2025) | +25.5% |
| Reference Index total return | +19.5% |
| Share price total return | +79.6% |
| Share price | 216.0p (31 Oct 2025); 246.0p (28 Jan 2026) |
| NAV per share | 65.3p |
| Premium to NAV | 230.8% (31 Oct 2025); 242.8% (28 Jan 2026) |
| Net assets | £26.4 million |
| Revenue EPS | 0.61p |
| Proposed dividend | 0.6p (ex-date 12 Feb 2026) |
| Ongoing charge (annualised) | 3.3% |
| Russian ‘S’ account balance | ~£54.2 million credited; £56.6 million incl. announced |
| Russian assets (written-down) | 5.7% of portfolio |
| VTB main claim status | $439.5 million upheld by court; not yet enforced |
My take: positives, pressure points, and the key swing factors
What’s working
- Outperformance is real and repeatable-looking, driven by stock selection rather than a one-off.
- Income remains resilient; a covered dividend increase to 0.6p is sensible.
- Costs are moving in the right direction, and the fee structure excludes Russian assets.
What keeps me cautious
- The premium is extraordinary. It can unwind quickly and painfully if Russian recovery hopes fade or legal outcomes deteriorate.
- The Russian legal overhang is unresolved. Enforcement of the VTB ruling is a major risk with potential sub-custodian insolvency implications.
- ‘S’ account balances are large versus NAV, but they are not recognised and may never be received.
What to watch next
- Any movement on enforcement of the VTB $439.5 million claim and the status of other claims.
- Further clarity on Decree 8 protections and the long-trailed procedures under Decree 442.
- Portfolio EPS delivery against the managers’ 5-10% 2026 expectation.
- Commodity trends – especially gold and uranium – and bank earnings momentum across Greece/CEE.
- Premium behaviour – absent buybacks, sentiment will dominate the share price.
Bottom line
On fundamentals, JEMA executed well in 2025: a 6% beat versus the reference index, quality stock picking, and a modest dividend rise. On valuation, the share price sits on a tower of Russian optionality and legal unpredictability. If you’re in for the long haul, size your position to the risks, focus on NAV progress, and treat the share price premium as a fair-weather friend.
