JPMorgan Emerging Markets Trust Reports Final Results and New Dividend Policy

Share price beats the index, but NAV lags: what actually happened

JPMorgan Emerging Markets Investment Trust (JMG) has posted full-year results to 30 June 2025. The share price total return came in at +9.8%, helped by a tighter discount to NAV. On net assets, the trust delivered a +4.9% NAV total return, trailing the MSCI Emerging Markets Index at +6.3%.

Over ten years, the long-term picture is stronger: share price total return of +128.0% and NAV total return of +115.9%, both well ahead of the Benchmark’s +83.7%. That matters because it shows the process can work over cycles, even if the most recent year was mixed at the portfolio level.

Why the lag versus the index this year? Two main reasons: above-index exposure to export-oriented IT services (hit by tariff jitters in H2), and a significant underweight to Korea just as the market surged more than 30% following policy moves to improve shareholder value and a supportive election result. On the positive side, holdings like MercadoLibre, BBVA and Hong Kong Exchanges & Clearing did well.

New 4% of NAV dividend policy – a structural shift designed to narrow the discount

The headline change is a proposed “enhanced” dividend policy. From 7 November 2025, subject to AGM approval, JMG aims to pay annual dividends equal to 4% of the prior year-end NAV, split into four equal quarterly payments. Crucially, the investment mandate does not change.

For the transition, the first three quarterly payments based on the 30 June 2025 NAV will each be 1.261p per share, payable in November 2025, February 2026 and May 2026. Thereafter, the four quarterly payments will be reset each year off the 30 June NAV, with the first payment in August. If portfolio income falls short, top-ups can be paid from realised capital reserves – a common feature in “growth and income” trusts.

This is squarely aimed at boosting retail appeal and reducing the discount over time. Income visibility tends to support demand. The trust will also adopt a new name to reflect the approach: JPMorgan Emerging Markets Growth & Income plc (JMGI).

Discount management: big buybacks, real impact

Discount control was front and centre. The discount narrowed from 12.0% to 8.2% by year end, and was 9.8% at the time of the Chair’s statement. Management leaned in: JMG repurchased 97,671,880 shares – 8.8% of starting share count – at an average 12.2% discount, spending £107,026,000. That was value-accretive, lifting NAV per share by 1.4p (1.1%).

Buybacks are not the only lever. A continuation vote is due in 2026, and there is a conditional tender offer for up to 25% of shares based on relative performance over the five years to 30 June 2029, subject to shareholder approval at the time. Together with the proposed income policy, those are meaningful safeguards for discount-sensitive investors.

Costs, governance and new tools: OCR steady, notice period cut, CFDs proposed

Costs remain competitive. The ongoing charges ratio stayed at 0.79%, among the lowest in the peer group. The Manager’s notice period has been reduced to six months from 1 July 2025, which is tidy governance.

One technical change up for approval at the AGM: allowing the use of Contracts for Difference (CFDs). CFDs are derivatives that can offer efficient market exposure and help with cash management. They may also be used for potential gearing within limits in future. There is no borrowing at present, and the gearing/cash effect over the year was negligible.

Portfolio positioning: quality bias intact, tech heavy, valuation now more grounded

The managers maintain a long-term, quality-first approach – finding durable businesses, not overpaying, and holding for years. The portfolio skews to technology – 32.7% of the trust – and is overweight financials and consumer names. The managers argue the set-up in emerging markets is improving with a weaker US dollar, shifting global trade patterns, and rising Chinese manufacturing competitiveness.

Valuation work suggests the portfolio now trades at about 15x price/earnings versus the index at roughly 13x, with a portfolio dividend yield of 2.5% compared with 2.7% for the Benchmark. Return on equity sits just under 19% for portfolio companies versus slightly less than 13% for the index, with non-financial holdings generally holding net cash. In short, quality metrics remain above market while valuations have normalised – a healthier starting point than a few years ago.

Dividends today and tomorrow

For the year to 30 June 2025, JMG proposes a final dividend of 1.45p per share, taking the total to 2.10p – up 10.5% year on year. Subject to shareholder approval, the final will be paid on 14 November 2025 to shareholders on the register on 10 October 2025.

Under the proposed policy, remember the first three quarterly payments will each be 1.261p based on the 30 June 2025 NAV. After that, quarterly payments will reset each year off the 30 June NAV, with the first payment in August.

Key numbers at a glance

Share price total return	+9.8%
NAV total return	+4.9% (Benchmark +6.3%)
10-year total return	Share price +128.0%; NAV +115.9% (Benchmark +83.7%)
Total dividend (FY25)	2.10p (+10.5%)
Discount to NAV at year end	8.2% (from 12.0%)
Buybacks	97,671,880 shares; £107,026,000; average 12.2% discount; +1.4p NAV accretion
Ongoing charges ratio	0.79%
NAV per share (30 June 2025)	126.1p
Shares in issue (year end)	1,011,554,630

Risks, context and what to watch next

Macro uncertainty is still high: tariffs, US trade policy, China’s economic rebalancing, and currency swings all matter. The Board rates political and economic risk as high and increasing. The trust acknowledges its recent underperformance versus the index and the team has adjusted exposure, including trimming some IT services where US demand looks softer.

Watch these dates and decisions:

• AGM on 7 November 2025 – shareholder votes on the enhanced dividend policy, the Articles change to permit distribution of capital as income, and the CFD-related investment restriction update.
• Rebrand to JPMorgan Emerging Markets Growth & Income plc (JMGI) shortly after AGM approvals.
• Continuation vote in 2026 and a conditional performance-linked tender for up to 25% of shares after the five years to 30 June 2029.

Jargon buster (quick and useful)

• NAV: Net asset value – the value of the underlying portfolio per share.
• Discount: When the share price trades below NAV; a narrower discount usually supports the share price.
• Total return: Price or NAV performance plus dividends reinvested.
• Ongoing charges ratio (OCR): The annual running cost of the trust as a percentage of net assets.
• CFDs: Contracts for Difference – derivatives that can adjust exposure and help with cash management, and can introduce gearing.

My take: why it matters for retail investors

This update is a blend of the practical and the strategic. Practically, buybacks have worked and costs are tight. Strategically, the 4% of NAV dividend policy could be a powerful magnet for income-minded investors without forcing style drift. It should also help anchor the discount.

The bear case: this year’s NAV underperformance and the fact that the share price outperformance came from discount moves rather than stock-picking. Paying part of the dividend from capital, when needed, can also dampen future compounding if not balanced by solid NAV progress. The proposed ability to use CFDs adds flexibility but also complexity and potential risk if gearing is introduced later.

The bull case: a cheaper, higher-quality portfolio by the managers’ metrics, a supportive EM backdrop if the dollar stays softer, and a clear plan to differentiate with a dependable quarterly cash return. For investors who want emerging markets exposure with a quality tilt and a defined income stream, JMG’s proposed evolution to JMGI looks attractive – provided you are comfortable with EM volatility and keep an eye on that discount.