Annual Financial Report
Summary by AI BETAClose X
LONDON STOCK EXCHANGE ANNOUNCEMENT
JPMORGAN EMERGING MARKETS DIVIDEND INCOME PLC
(Formerly JPMorgan Global Emerging Markets Income Trust plc)
FINAL RESULTS FOR THE YEAR ENDED 31ST JULY 2026
Legal Entity Identifier: 549300OPJXU72JMCYU09
Information disclosed in accordance with the DTR 4.1.3
JPMorgan Emerging Markets Dividend Income plc (JEMI or the ‘Company’) announces its full year results for the 12 months ended 31st July 2026.
Highlights:
• NAV total return of +38.0% for the year ended 31st July 2026, compared with +34.2% for the MSCI Emerging Markets Index with net dividends reinvested (in Sterling terms) (the “Benchmark”). Share price total return of +36.7%.
• Three-year cumulative NAV total return: +67.4% compared with +62.4% for the Benchmark. Share price total return of +68.3%.
• Five-year cumulative NAV total return: +74.2% compared with +52.0% for the Benchmark. Share price total return of +71.8%.
• Ten-year cumulative NAV total return: +173.9% compared with +137.7% for the Benchmark. Share price total return of +158.7%.
• Total dividend of 6.0p per ordinary share for the 2026 financial year, a 7.1% increase from the prior year (2025: 5.6p).
• The Company has outperformed the Benchmark over one, three, five and ten years both in NAV and share price.
• The Company bought back 11,413,845 ordinary shares into Treasury during the financial year at a weighted average discount of 9.3%, increasing the NAV per ordinary share by 0.7p.
• Average discount during the year was 8.4% compared with 12.1% in 2025.
• With effect from 1st August 2026, the management fee payable to the Manager was reduced by five basis points at each tier. The revised fee is charged at an annual rate of 0.70% of net assets up to and including £500 million; and 0.60% of net assets above £500 million.
• Shuyu Gao was appointed a named Portfolio Manager of the Company in October 2026, working alongside Omar Negyal. She joined J.P. Morgan Asset Management in 2025 and has more than a decade of investment experience, specialising in the Chinese, Taiwanese and South Korean markets.
Elisabeth Scott, Chair of the Board, commented: “I am pleased to report another year of strong performance, with the Company’s total return on net assets once again ahead of the Benchmark. This is not a one-year phenomenon: the Company has continued to deliver cumulative returns in excess of the Benchmark over three, five and ten years. My fellow directors and I remain firmly convinced of the investment case for Emerging Markets and …share the Portfolio Managers’ optimism, and we look to the future with confidence in your Company’s prospects. That conviction continues to be reinforced by the Investment Manager’s long-term track record, which has proved itself through the varied and often unusual challenges that investors have faced in recent years.”
Omar Negyal and Shuyu Gao, Portfolio Managers, commented: “We are optimistic about the outlook for Emerging Markets, and for our Company. Despite geopolitical volatility and conflict in the Middle East, the performance of Emerging Markets has been robust, and most economies are coping relatively well with the resultant energy price shock. The current investment environment seems supportive for Emerging Markets and is providing us with many interesting, varied and well-priced opportunities across countries and sectors. Our focus will remain on building a portfolio which provides shareholders with exposure to Emerging Markets’ exciting growth story, while also delivering an attractive yield and regular income.”
CHAIR’S STATEMENT
“I am pleased to report another year of strong performance, with the Company’s total return on net assets once again ahead of the Benchmark. This is not a one-year phenomenon: the Company has continued to deliver cumulative returns in excess of the Benchmark over three, five and ten years.
My fellow directors and I remain firmly convinced of the investment case for Emerging Markets. Their long-term growth prospects, favourable demographics, generally improving fiscal positions and innovative, entrepreneurial corporate cultures remain compelling attributes. That conviction continues to be reinforced by the Investment Manager’s long-term track record, which has proved itself through the varied and often unusual challenges that investors have faced in recent years.”
Elisabeth Scott, Chair
Performance
The year ended 31st July 2026 was a good one for Emerging Markets equities. The rotation away from developed markets, especially the US, into Emerging Markets that began in the latter half of 2025 continued, supported by the same confluence of factors – US dollar weakness, valuations that compare favourably with the excesses of the US market, and corporate governance reforms which have significantly boosted shareholder returns, especially in the South Korean market. In addition, South Korean and Taiwanese advanced semiconductor manufacturers are experiencing unprecedented demand as global investment in AI processes, data centres and infrastructure soars, resulting in dramatic earnings and share price increases. While the outbreak of conflict in the Middle East in February compounded geopolitical tensions and raised concerns about renewed inflation and interest rate pressures, it also drove up energy and commodity prices, which benefited producers across several regions. In all, the MSCI Emerging Markets Index (with net dividends reinvested) (the ‘Benchmark’) rose by 34.2% in sterling terms over the 12 months to end July 2026.
Against this supportive backdrop, I am pleased to report that your Company recorded a total return on net assets of +38.0% for the year under review, well ahead of the Benchmark. The total return to shareholders, which includes both the share price return and dividends, was +36.7%, reflecting a modest widening of the discount to net asset value (‘NAV’) at which the Company’s shares trade to 10.0%, from 8.8% at the previous financial year end.
Stock selection and asset allocation both made meaningful contributions to performance over the year. Stock selection in China was an important driver of relative returns. The Company’s longstanding underweight to India was another notable contributor, as growth slowed and investors became more wary of excessive valuations. Gearing also enhanced returns given the strength of the market over the period. Please see the Investment Manager’s Report below for a full breakdown of performance attribution.
The Company’s strong performance over the past year extended its longer-term record of outperformance. Over the ten-year period ended 31st July 2026, the Company has delivered an annualised NAV total return of 10.6%, compared with corresponding Benchmark returns of 9.0%. The Company’s performance over the five and ten-year periods remained ahead of the average of its Association of Investment Companies (‘AIC’) peer group.
The strong NAV performance delivered over the year was reflected in a significant increase in the Company’s net assets and investment portfolio. The favourable market backdrop and appreciation of many of the Company’s holdings resulted in fair value gains on investments of £150.4 million during the year (2025: £40.1 million), contributing to total investments increasing to £578.9 million at 31st July 2026 (2025: £472.1 million) and net assets increasing to £572.3 million (2025: £449.5 million). These movements demonstrate the positive contribution from the Company’s portfolio over the period and the benefits of the Investment Manager’s stock selection and asset allocation decisions.
The Investment Manager’s Report below reviews the market environment and the Company’s performance over the reporting period in more detail and discusses the reasons behind the Portfolio Managers’ positive view on the outlook for Emerging Markets and for your Company.
Revenue and Dividends
The Board is keenly aware of the importance of regular and attractive dividends to our shareholders. We are also mindful of the increased availability to investors of other sources of income, and the impact this is having on the dividend policies of many investment companies. In view of this, as set out in last year’s Annual Report & Financial Statements, the Board set out its plans to increase the absolute level of dividend paid by the Company and to distribute dividends more evenly throughout the financial year.
During the 12 months to 31st July 2026 (FY26), the Company paid three interim dividends of 1.5p per ordinary share each (1.0p per ordinary share in FY25). On 3rd September 2026, it declared a fourth interim dividend of 1.5p per ordinary share, which was paid on 16th October 2026 to shareholders on the register at the close of business on 11th September 2026. In sum, these payments amount to a total dividend for the year of 6.0p, a 7.1% increase in the total dividend of 5.6p paid in respect of the prior year.
As a continuation of its efforts to provide shareholders with an attractive and competitive dividend, the Board plans to increase the dividend annually assuming market conditions permit. In the absence of unforeseen circumstances, the first three quarterly interim dividends for the current financial year are expected to be paid at the same level, with the fourth interim dividend expected to be at least the same amount as each of the first three. Given the Board’s wish to continue paying four interim dividends, it will seek shareholder approval to maintain this dividend payment policy at the forthcoming Annual General Meeting.
The Company’s gross revenue for FY26 amounted to £20.3 million (2025: £20.2 million), with net revenue of £16.1 million (2025: £16.0 million). Net revenue return per ordinary share for the year, calculated on the average number of shares in issue, was 6.12p (2025: 5.69p). The total dividend for the year was fully covered by revenue generated during the financial year. After allowing for the fourth interim dividend, the Company’s revenue reserves stood at £14.3 million (2025: £13.8 million), equivalent to approximately 91% of the current annual dividend. These reserves provide the Company with the capacity to support and smooth future dividend payments should portfolio revenues in any particular year be insufficient to fund that year’s distributions.
The Board reviews dividend receipts at each of its meetings, given their importance to the Company’s investment proposition. It carefully considers the outlook for dividends with the Portfolio Managers, including sensitivity analysis regarding the potential impact of currency movements on the Company’s revenue.
As shareholders are aware, the Company receives dividends in the currencies of developing countries and in US dollars, while paying dividends to shareholders in sterling. It has not been the Company’s policy to hedge this currency risk, as doing so can be expensive and, for many currencies, impracticable. This means that the Company’s asset values and cash flows may be adversely affected if sterling strengthens against Emerging Market currencies and the US dollar, or benefit if sterling weakens. Notwithstanding such currency movements, your Board and the Investment Manager remain of the view that Emerging Markets offer attractive long-term income prospects alongside the potential for earnings and capital growth.
Loan Facility and Gearing
In addition to the ability to use reserves to support dividend payments, another distinguishing feature of investment trusts is their capacity to employ gearing. The Board believes that the judicious use of gearing can enhance long-term shareholder returns, as it did in the past year. The level of gearing and the methods by which it is obtained are discussed with the Portfolio Managers at each Board meeting.
During the year, the Company continued to have access to a US$40 million revolving credit facility, together with an additional US$20 million accordion, provided by Industrial and Commercial Bank of China Limited (London) Plc (‘ICBC’). The Investment Manager also used contracts for difference (‘CFDs’) during the year as a low cost, flexible means of obtaining geared exposure. When the current lending facility expires in November 2026, the Company does not intend to renew it, but rather to make further use of CFDs for gearing, an approach that is in line with market practice elsewhere.
As at 31st July 2026, the Company’s gearing stood at 5.4%, compared with 4.9% at 31st July 2025. Gearing contributed 2.0% to the Company’s total return over the financial year.
Discount Management
During the financial year to 31st July 2026, the Company’s ordinary share price traded at an average discount to NAV of 8.4% (2025: 12.1%). The discount ranged between 2.3% and 10.8% during the year and stood at 10.0% at 31st July 2026, compared with 8.8% at the previous financial year end.
The Board does not believe that the current level of discount reflects the Company’s long-term performance record, the quality of the portfolio or the potential of the Company. The Board recognises that, notwithstanding improved sentiment towards Emerging Markets during the year, the Company’s shares have continued to trade at a wider than desirable discount to NAV.
The Board takes an active approach to the management of the discount. It employs three principal tools to achieve this: share repurchases, promotion of the Company and, in the longer term, the introduction of the five-year performance related conditional tender offer. These are discussed in more detail below.
Share Repurchases
The Board regularly considers the merits of repurchasing ordinary shares to manage the level and volatility of the discount and will undertake repurchases where it considers this to be in the best interests of shareholders. As ordinary shares are bought back at a discount to the prevailing NAV, such repurchases are accretive to the NAV per ordinary share of the remaining shares. During the financial year, the Company repurchased 11,413,845 ordinary shares into Treasury for a total cost of £19,929,000, at a weighted average discount of 9.3%. These repurchases increased the NAV per ordinary share by 0.7p, underscoring the Board’s belief that the Company’s shares offered attractive value. The Company did not issue or reissue any ordinary shares during the year. All shares repurchased by the Company are held in Treasury rather than cancelled, so they may be reissued at a premium to NAV in the future, should there be sufficient demand.
Between the end of the financial year and 23rd October 2026 the Company repurchased a further 1,678,692 ordinary shares into Treasury at a total cost of £3,564,615. At the time of writing, the discount stood at 8.5%.
The Board aims to continue to actively manage imbalances between the supply of, and demand for, the Company’s shares, in normal market conditions, with the objective of achieving a narrower and more stable discount or premium over the longer term, while enhancing NAV per ordinary share through accretive repurchases. With this goal in mind, at the forthcoming Annual General Meeting, the Board will seek renewal of the shareholder authorities to repurchase up to 14.99% of its ordinary shares and to issue up to 10% of the Company’s issued share capital.
Conditional Tender Mechanism
As explained in last year’s Annual Report & Financial Statements, a five-year performance-based conditional tender offer took effect on 1st August 2025. If the Company’s audited NAV total return does not exceed the Benchmark’s total return, on a cumulative basis, over the five years from that date, shareholders will have the opportunity to tender up to 25% of the Company’s issued share capital (excluding shares held in Treasury). For the purposes of this calculation, performance is adjusted to exclude capital gains tax paid on the disposal of Indian securities, to ensure a fair comparison with the Benchmark, which does not incur such liabilities.
The introduction of the tender offer has not changed the Board’s approach to discount management or the Investment Manager’s management of the portfolio. Further details, including the terms of the offer and its relationship with the Company’s three-year continuation votes, are set out in the full Annual Report.
Promotion of the Company and Name Change
During the year, the Company changed its name from JPMorgan Global Emerging Markets Income Trust plc to JPMorgan Emerging Markets Dividend Income plc. The Board believes that the new name better reflects the Company’s investment strategy and its focus on providing shareholders with exposure to dividend-paying companies across Emerging Markets. The change of name did not alter the Company’s investment objective, investment policy or the way in which the portfolio is managed, and shareholders were not required to take any action as a result.
The Board works with the Manager to further enhance the Company’s marketing messages and investor communications.
The Board and Corporate Governance
There were no changes to the composition of the Board during the financial year. The Board supports annual re-appointment for all Directors, as recommended by the Association of Investment Companies Code of Corporate Governance. Accordingly, all Directors will stand for reappointment at the forthcoming Annual General Meeting.
Mark Edwards, who was appointed to the Board in February 2018, has indicated his intention to retire at the Annual General Meeting to be held in 2027, having then served nine years as a Director. He will accordingly stand for reappointment at the forthcoming Annual General Meeting and will serve for a further year. The Nomination Committee has considered Board succession and will commence a search for a successor next year.
The Board recognises the benefits of diversity in the boardroom and is pleased to confirm that the Company continues to meet the relevant diversity targets set out in the UK Listing Rules.
During the year, the Board carried out its annual evaluation of the performance of the Board, its Committees and the individual Directors. The evaluation concluded that the Board and its Committees continue to operate effectively and that each Director contributes constructively to the Board’s deliberations. No material issues were identified.
Portfolio Managers
Omar Negyal has managed the Company’s portfolio since 2012 and continues to do so with the support of the Investment Manager’s extensive Emerging Markets and Asia Pacific research platform.
In October 2026, Shuyu Gao was appointed as a named Portfolio Manager of the Company, working alongside Omar Negyal. Shuyu joined J.P. Morgan Asset Management in 2025 and brings over a decade of investment experience with particular expertise in the markets of China, Taiwan and South Korea, several of the Company’s largest country exposures. The Board is pleased to welcome her appointment, which further strengthens the management arrangements supporting the Company’s investment strategy.
Manager and Management Fee
Through the Management Engagement Committee, the Board has evaluated the performance of JPMorgan Funds Limited (‘JPMF’ or the ‘Manager’), including that of the Investment Manager, and has reviewed the management arrangements and the terms of the Manager’s appointment.
With effect from 1st August 2026, the management fee payable to the Manager was reduced by five basis points at each tier. The revised fee is charged at an annual rate of:
– 0.70% of net assets up to and including £500 million; and
– 0.60% of net assets above £500 million.
The previous fee was charged at 0.75% on the first £500 million of net assets and 0.65% on net assets above that level. The reduction therefore benefits all shareholders by lowering the Company’s ongoing costs while retaining the benefits of the Investment Manager’s extensive Emerging Markets research capabilities.
In reviewing the Manager, the Management Engagement Committee considered, among other matters, the Company’s investment performance, the quality and depth of the investment team, the robustness of the investment process, the management fee arrangements and the wider administrative, sales, marketing and company secretarial services provided to the Company.
In view of the Company’s long-term performance record, the strength and depth of the investment team and the quality of the additional services provided to the Company, the Board is satisfied that the continuing appointment of JPMF as the Company’s Manager remains in the best interests of shareholders.
Annual General Meeting
The Company’s Annual General Meeting (‘AGM’) will be held at 60 Victoria Embankment, London, EC4Y 0JP on Wednesday, 25th November 2026 at 2.00 p.m. The Portfolio Managers, Omar Negyal and Shuyu Gao, will give a presentation to shareholders on the Company’s recent performance and their outlook for Emerging Markets. We are delighted to invite shareholders to join us in person for the Company’s AGM. The meeting will be followed by afternoon tea, which will provide shareholders with an opportunity to meet the Portfolio Managers, as well as my fellow Board members and me.
However, those shareholders wishing to follow the AGM proceedings without attending in person will be able to view them live and ask questions (but not vote) through conferencing software. Details on how to register, together with access details, will be available shortly on the Company’s website or by contacting the Company Secretary at jpmam.investment.trusts@jpmorgan.com. As a matter of best practice, voting on all resolutions will be conducted by poll. Shareholders who are unable to attend the AGM are strongly encouraged to submit their proxy votes in advance so that these can be registered and recorded at the meeting.
Full details of the format of the meeting and explanations of the proposed business, along with detailed instructions for lodging proxy votes by post or electronically, can be found in the Notice of Annual General Meeting in the full Annual Report.
Shareholders are encouraged to submit questions in advance of the AGM through the Company Secretary. The Board will endeavour to answer relevant questions at the meeting or, where appropriate, through the Company’s website. My fellow Board members, the Portfolio Managers and representatives of the Manager look forward to meeting shareholders at the AGM.
Stay Informed
The Board wishes to ensure that shareholders are kept well informed about the Company. We therefore encourage shareholders who have not already done so to sign up for the Company’s email updates, which include news and views from the Investment Manager and the latest performance information.
If you have not already signed up to receive these communications and you wish to do so, you can opt in via https://tinyurl.com/JEMI-Sign-Up or by scanning the QR code on the contents page of the Annual Report.
Outlook
The factors that have fuelled the impressive gains seen across Emerging Markets over the past couple of years look set to remain key drivers of returns over the coming year and well beyond. Firstly, the AI revolution is only just getting started and the global leadership of Emerging Markets technology companies in many AI-related areas looks unassailable in the near-term. However, the Board appreciates the Portfolio Managers’ cautious approach to the high valuations of some Emerging Markets technology companies, and the risks associated with perceived ‘AI losers’.
The success of South Korea’s efforts to improve shareholder returns is another positive for Emerging Markets more generally, as it is inspiring the governments and regulators of other countries to emulate South Korea’s reform efforts. Any further progress on this front should support upward valuations over the medium-term.
The investment case for Emerging Markets is also supported by several other powerful, long-term structural themes - including these economies’ young, increasingly urbanised and aspirational populations – that will continue to underpin Emerging Markets’ positive, long-term growth story. As we have seen over the past year, these trends are unlikely to be derailed by near-term geopolitical volatility. Indeed, simmering Middle East tensions and persistent uncertainties across the wider political landscape have benefited countries and businesses exposed to higher energy and commodity prices.
On a final positive note, the recent rotation into Emerging Market equities suggests investors are beginning to appreciate the diversification benefits, opportunities and value offered by these markets. The combination of highly concentrated returns, high valuations and rising bond yields has the potential to cause global equity market volatility over the next year or so, yet Emerging Market equity valuations are still relatively low when compared to developed markets, and this should provide the rotation into Emerging Markets with ongoing impetus.
This all amounts to a very conducive environment for Emerging Market equities, giving my fellow Directors and me good reason to share the Portfolio Managers’ optimism, and we look to the future with confidence in your Company’s prospects.
On behalf of the Board, I would like to thank you for your ongoing support and commitment to the Company.
Elisabeth Scott
Chair 26th October 2026
INVESTMENT MANAGER’S REPORT
For the year ended 31st July 2026, the Company’s total return on net assets, including dividends, was +38.0%. This compares favourably with our Benchmark, with dividends reinvested, which returned +34.2%. The return to shareholders, including dividends, was +36.7%. These results extend the Company’s robust long-term performance track record: Over the three-, five- and ten-year periods ended 31st July 2026, the Company realised annualised returns of +18.7%, +11.7% and +10.6% respectively in NAV terms, ahead of the corresponding annualised Benchmark increases of +17.6%, +8.7% and +9.0%.
Investment Environment
After delivering their best calendar-year performance in nearly a decade in 2025, the very good returns realised by Emerging Market (‘EM’) equities over the year ended 31st July 2026 ensured that they continued to outpace key developed market indices over this period. This performance was driven by several factors. The depreciation of the dollar in early 2025 provided ongoing impetus, reducing the burden of dollar-denominated debt, lowering imported inflation for emerging economies and increasing policy flexibility. In combination with high US equity valuations and the superior real yields on offer in developing economies, this encouraged increasing rotation away from US capital markets in favour of Emerging Markets. Indeed, in our assessment, there has been a marked shift in investors’ attitudes towards Emerging Markets, which are now, finally, being more broadly recognised as a strategic diversification tool with more compelling risk-reward profiles than developed markets.
The past year was, however, characterised by large dispersions across regions, with countries exposed to technology and commodities seeing favourable results, whereas countries marred by slowing economic activity, or unstable political developments performed poorly. South Korea was a standout performer at the country level, driven by demand for the advanced memory chips essential to the rapid spread of artificial intelligence (AI). A severe shortage of these components led to a very favourable pricing environment for suppliers, and the stock prices of these companies performed extraordinarily well. The rapid spread of the AI revolution is driving solid earnings upgrades across South Korea (and also Taiwan), with the largest index drivers being almost exclusively tied to this theme. Additionally, banks and other key beneficiaries of South Korea’s ‘Value-Up’ corporate governance reforms continued to outperform, as the reforms lift shareholder returns. On the other side of the AI trade, we saw a large sell-off in IT services and software, notably in India, as the market branded these as ‘AI losers’ which are highly vulnerable to structural disruption.
In the Middle East, military strikes, naval blockades, and a blockade of the Strait of Hormuz caused massive energy price volatility and pushed up Brent crude prices to highs last seen after Russia invaded Ukraine. The resultant rally in energy stocks benefited regions with significant commodity exposure.
Two of the largest Emerging Markets, China and India, struggled over the past year. Chinese economic growth remained lacklustre, driven by sluggish consumption and ongoing property sector weakness, and Chinese equities lagged. India stood out as another notable laggard during the year’s robust EM rally. Investors became increasingly wary of its premium valuations, especially as earnings weakened in response to slower economic growth driven by declining manufacturing output, elevated food price inflation, and muted urban consumption. This valuation reset has compressed India’s historical premium to broader Emerging Markets, but parts of the market remain relatively expensive.
Performance attribution
for the year ended 31st July 2026 |
% |
% |
Contributions to total returns |
|
|
Benchmark return |
|
34.2 |
Asset allocation1 |
1.1 |
|
Stock selection1 |
1.8 |
|
Gearing/cash |
2.0 |
|
Investment Manager contribution |
|
4.9 |
Portfolio total return |
|
39.1 |
Management fees and other expenses |
(0.9) |
|
Impact of provision for capital gains tax |
(0.1) |
|
Impact of finance costs |
(0.5) |
|
Share buybacks |
0.4 |
|
Total other effects |
|
(1.1) |
Return on net assets2,A |
|
38.0 |
Return to shareholders3,A |
|
36.7 |
Source: Morningstar/J.P. Morgan. All figures are on a total return basis.
1 Based on Country allocation.
2 Based on the cum-income NAV per ordinary share (net of all fees and expenses), including dividends reinvested.
3 Based on share price, including dividends reinvested.
A Alternative Performance Measure (‘APM’).
Performance attribution analyses how the Company achieved its recorded performance relative to its Benchmark.
A glossary of terms and APMs is provided in the full Annual Report.
Performance Drivers
During the past year, stock selection was a significant driver of returns – a result consistent with the Company’s investment process, which is based on bottom-up stock selection – although asset allocation decisions also had a notable positive performance impact. The strength of the market meant that gearing was a further meaningful contributor to outperformance over the period.
At a more granular level, stock selection in China enhanced returns, despite the fall in the Chinese market over this period. Our holding of Lenovo, one of the world’s largest PC brands, was a key contributor. This stock performed strongly, driven by Lenovo’s transition from a PC-centric company to a higher-margin, higher-growth servers and services business. Despite ongoing exposure to the more stagnant PC market, Lenovo’s new focus on servers and services should allow the company to drive a much improved profit trajectory. Our significant underweight to Chinese internet retail names also supported performance, as the sector sold off due to concerns about cash flow and the increasing cost burden of these companies’ investments in AI. In addition, price wars in the quick commerce market saw some players sustain losses. Our decision not to own Xiaomi was also helpful. This Chinese consumer electronics and electric vehicle (EV) company faced headwinds from three sources – rising component costs, weak domestic activity, and intensifying competition in the EV sector. The stock fell significantly due to investor concerns regarding Xiaomi’s ability to sustain margins and reach its growth targets.
Our longstanding underweight in India was another important source of excess returns. The Indian market performed well in the first few years of this decade, but we maintained our underweight position as we viewed valuations as expensive, despite the country’s very positive long-term growth prospects. It is also difficult to find Indian stocks offering an attractive yield, and we typically found more attractively valued opportunities in other markets. Our positioning has recently begun to pay off as India’s economy slowed and investors came to share our concerns about excessive valuations. Performance also benefited from our cautious view on Indian IT services companies. We were wary of the implications of AI on the sector’s future, and sold down our exposure, a decision which subsequently enhanced relative returns following the sell-off in perceived ‘AI-losers’.
Our underweight to the United Arab Emirates (UAE) also contributed positively. This market declined after US and Israeli attacks on Iran led to retaliatory action by Iran, including on the UAE and other neighbouring countries. Tourism, retail, and real estate activity across the Middle East have all been disrupted, and our low exposure in this region paid off accordingly.
Elsewhere in the tech sector, our acquisition of another semiconductor supplier, Taiwan’s MediaTek, over the past year, enhanced returns. MediaTek designs chips for communications and mobile devices, although it outsources production to specialised manufacturers. In the past, the company primarily supplied lower growth consumer products such as smartphones and tablets. However, its recent pivot into customised AI data centre chips (ASICs) ensured it was one of the best Taiwanese tech performers over the past year. We invested in MediaTek on the idea that the company possessed the technological capability to break into this space and win market share, and we remain confident of its potential to gain further traction in this market. We are also pleased with the performance of another Taiwanese portfolio holding, ASE Technology. This company is the world’s leading outsourced semiconductor assembly and testing (OSAT) vendor. Demand for ASE’s services has grown given the increasing complexity of chips and the need for its specialist, higher-value packaging. The company raised its financial targets and growth estimates accordingly and has significantly outperformed the broader semiconductor industry.
The most notable detractor from relative performance was stock selection in South Korea, thanks mainly to our underweight to SK hynix, a key player within the rapidly growing memory chip market. We recognised the potential in this market and held a significant position in SK hynix’s competitor, Samsung, to gain exposure to this theme. Our preference for Samsung was based on its more attractive shareholder return policy and the stock made a significant contribution to returns. However, the sector’s exceptional strength meant owning only one name was not sufficient to capture the full extent of the industry-wide rally, and relative performance suffered accordingly. As part of portfolio risk management, we initiated a position in SK hynix earlier this year to manage exposure here.
Our underweight to Taiwan Semiconductor Manufacturing Company (TSMC) also detracted. The company has been outperforming for some time thanks to its position at the centre of the global AI infrastructure buildout. TSMC has the world’s largest chip foundry and dominates the market in advanced foundry services. It has built a defensible moat based on technology leadership, manufacturing excellence, and customer trust. We have a large absolute position, but we are comfortable with our active underweight versus the benchmark, as the dramatic valuation increases over the past three years have lowered the dividend yield.
In other areas of the portfolio, our exposure to Indonesia detracted. A broad-based Indonesian market sell-off was triggered by the government’s efforts to centralise power and garner support via populist fiscal spending programmes. The authorities subsequently sought to reassure investors by implementing some fiscal restraint, but key questions remain about the credibility and sustainability of these measures. We reduced our weighting in this market to account for these risks.
Amongst our Indonesia holdings, Telkom Indonesia underperformed with competition concerns rising, potentially leading to a worsening earnings outlook. However, it has the best network and holds a dominant market share in both mobile and fixed broadband in the country. The prices paid in the spectrum auction were lower than forecast and we expect to see evidence that the mobile market is under repair after a period of intense price competition. Furthermore, Telkom pays a solid dividend which is comfortably supported by its strong free cash flow generation. Our position in Bank Rakyat, one of Indonesia’s largest state-owned banks, also detracted. It underperformed due to deteriorating asset quality in its core micro-lending segment, tight system liquidity that led to a spike in funding costs, and weak economic conditions. However, the micro-lending franchise is beginning to show some stabilisation at the margin, the company’s profitability profile remains solid, and the cheap valuation means the stock now offers a double-digit dividend yield, so we retain a position in this name.
Portfolio positioning and changes
We build the portfolio on a bottom-up basis, selecting stocks based on their sound fundamental qualities, robust balance sheets and capacity to pay dividends over the long term. Naturally, some areas within Emerging Markets offer more investment opportunities than others, and this results in tilts within the portfolio towards some sectors and countries. From a sectoral viewpoint, the portfolio’s key sector overweight is in Financials, while the portfolio is underweight Health Care and Industrials. This positioning aligns with the Company’s historical trends.
One noteworthy change in the portfolio’s sector tilt over the past year has been in Technology. This has been an area where we have had a successful and performance-positive multi-year overweight, but we are now modestly underweight. We still believe there are many positives emanating from the AI revolution, but valuations in aggregate have risen dramatically (and dividend yields have fallen), and we believe this justifies a more cautious approach. Specifically, we took profits on stocks where valuations looked expensive, including ASE Technology, and Realtek, a Taiwanese supplier of chip design services.
We rotated some of the proceeds of these sales into new positions in names where we had conviction in the long-term product outlook. Our purchase of MediaTek, discussed above, is one example, which subsequently made the third largest contribution to performance at the stock level over this period. Another new name is Advantech. This Taiwanese business provides hardware and software components for industrial automation, and is seeing strong order growth. Additionally, we initiated the position in Lenovo, another of our recent top performers, as we liked its increased exposure to servers.
Another meaningful sector shift is a rise in exposure to Materials, where we have historically been underweight. This is a result of our more favourable view on the outlook for commodities. This sector is now supported by various positive factors including more disciplined capital expenditure, combined with new demand from AI data centre construction, and the global transition to electrification. Furthermore, reduced reliance on the US dollar and central-bank reserve diversification are fuelling investors’ appetite for gold and other precious metals. In addition to our acquisition of Grupo Mexico, we purchased South African gold miners AngloGold Ashanti and Gold Fields, along with Zijin Mining, a Chinese supplier of gold, copper, and zinc. These purchases were partly funded by some profit-taking on names like PetroChina, an oil and gas producer, a beneficiary of the recent spike in energy prices.
At the country level, significant portfolio overweights include China, Greece and Brazil. As with our sector allocations, these country weightings are driven by the many individual stock opportunities which we view as attractive from an income investor’s perspective. In China, we repositioned our exposure to consumer names, selling dairy companies Mengniu and Yili, and the restaurant operator Haidilao on the back of weak consumption. Amidst cheap valuations, we took the opportunity to upgrade to higher quality names in some areas including the liquor sector, where we sold distiller Wuliangye in favour of its competitor Kweichow Moutai. We exited two Chinese utilities companies, ENN Energy and China Yangtze Power, on the view that the future growth opportunity looked more limited. In Greece, we closed our position in OPAP, a lottery operator. This stock has done well for the portfolio over several years, but we felt the planned restructuring by its parent Alwynn, materially changed the company’s investment thesis, so we rotated into other, more attractive opportunities. In Brazil, we reduced Axia Energia, a renewable energy company. The stock performed particularly well on the back of improvements in its capital allocation, as it announced a significant upgrade to its shareholder remuneration policy, but we felt most of the potential upside was already captured in the price, so we took the opportunity to reduce the position.
In contrast, the portfolio is underweight India and Taiwan. India’s long-term growth prospects are very good and investor interest in this market remains high. Yet even after the underperformance of the past year, some valuations remain extreme, making it difficult for us to find attractive income paying stocks. Amongst our Indian holdings, our worries about the impact of AI on IT services companies prompted the outright sales of Infosys and HCL Tech. Some industry pundits argue that AI will improve the long-term prospects of companies focused on outsourcing business processes and software development. However, we believe it is judicious to limit our exposure to these companies until there is more tangible evidence to support this hypothesis. Conversely, historically we have been overweight Taiwan, but our exposure to this market has declined over time due to the increasingly expensive valuations.
Elsewhere, we trimmed our position in Indonesia, reducing holdings in names such as Telkom and Bank Rakyat, to better manage escalating political and regulatory risks in this market.
Dividends
The portfolio continues to demonstrate an ability to generate dividends. We think it is important that the Company’s long-term dividend trajectory is well supported by underlying dividend receipts. Top dividend contributors in the financial year included three banks from different EM regions – Banorte (Mexico), Saudi National Bank and Bank Rakyat Indonesia. A very longstanding position in the portfolio, Taiwan Semiconductor, is still a major dividend contributor – one of the best progressive dividend stocks in EM. Analysing companies’ dividend policies is a key pillar in our process: we are not just interested in the yield today, but also in the resilience of the dividend on a multi-year basis, and the potential for long term growth. On this front we are reassured that our portfolio companies have been delivering as expected. Payout ratios vary across the portfolio but on average, our portfolio companies distribute approximately half their earnings as dividends each year; the retained half can then be reinvested back into their businesses to fund future growth.
Our Engagement on Environmental, Social and Governance
Financially material environmental, social and governance (‘ESG’) considerations are a part of our investment process (please see the dedicated section in the full Annual Report). Examples of recent ESG engagement with portfolio companies can be seen in the full Annual Report.
Outlook
We are optimistic about the outlook for Emerging Markets, and for our Company. Despite geopolitical volatility and conflict in the Middle East, the performance of Emerging Markets has been robust, and most economies are coping relatively well with the resultant energy price shock. The earnings picture overall looks strong and underpins EM returns though we are also very cognisant of cyclicality which can work both ways. Any eventual de-escalation of Middle East tensions offers upside potential, as it could alleviate pressure on inflation and interest rates. However, nearer-term, persistent inflation pressures, interest rate increases, potential USD strength and broader geopolitical developments will remain key swing factors for sentiment.
The AI revolution will remain a significant driver for EM for the foreseeable future. EM technology companies, especially in South Korea and Taiwan, are integral to the global AI revolution. The sector encompasses world-leading companies in many AI-related areas including semiconductors, electronics, hardware, software, outsourcing and cloud technology. There seems little risk that their supremacy will be challenged in the near term. However, while our structural view of this sector is positive, we will remain cautious in our positioning as sentiment looks a little too buoyant. One other point to note is that the strong performance of AI-related stocks has meant that market concentration has increased, with just three stocks now accounting for more than a quarter of the Benchmark index. This is something for us to be mindful of as active investors in terms of how we build the portfolio.
Additionally, we are mindful of risks related to perceived ‘AI Losers’. We have already seen some IT services and software companies experiencing significant share price pressure due to fears that AI will render their business models obsolete. We will exercise ongoing care in sectors that might fall in this camp. But at the same time, we will be ready to take advantage of opportunities created by what we believe to be overly negative sentiment.
Another relevant area to highlight from our Income perspective is commodities, where we have increased our weighting. Central bank reserve diversification into gold could provide ongoing support for precious metals. Their role as a general hedge against inflation and geopolitical risks may also grow in significance given recent events in the Middle East. EM miners should benefit accordingly. There are several other reasons to expect EM commodity producers to maintain their recent strong performance. The global trend towards electrification is gathering momentum and will drive structural demand for a range of industrial metals. The prices for these commodities are also being boosted by acute supply disruptions at major mines globally and tariff-related stockpiling. China’s voracious appetite for bulk metals and materials has weakened in recent years due to the slump in the Chinese property market, but this adverse impact on commodity markets is being increasingly offset by rising demand from new economy drivers such as AI data centre infrastructure, EV adoption, and global energy grid modernisation.
Corporate governance reforms are another structural trend that will provide ongoing impetus to EM in the year ahead, and well beyond. A key frustration of the past decade has been the weak translation of EM GDP growth into corporate earnings increases. This can be attributed to weaker corporate governance, poor capital allocation, and deficient shareholder protections. However, there has been a marked shift in some markets, notably South Korea, where the authorities have initiated large scale reforms to lift relatively low valuations.
In the largest Emerging Market, China, we see persistent deflationary pressures, evidenced by low bond yields, compounded by a weaker than expected property market recovery. This has created a two-speed market: local financial institutions are hunting for income, while growth opportunities abound in AI infrastructure, semiconductor localisation, advanced manufacturing and industrial automation. Non-AI related valuations are looking increasingly attractive, and a slow march towards better governance and improved shareholder returns continues.
In India, structural reforms over the past decade are still underpinning the country’s long-term growth prospects. A mid-cycle slowdown in economic and earnings growth is compressing India’s valuation premium versus other EMs, and over time this will ensure the opportunity set broadens, as valuations begin to look more attractive in this historically expensive market.
In summary, the current investment environment seems supportive for Emerging Markets and is providing us with many interesting, varied and well-priced opportunities across countries and sectors. Our focus will remain on building a portfolio which provides shareholders with exposure to Emerging Markets’ exciting growth story, while also delivering an attractive yield and regular income.
We look forward to reporting on the portfolio’s further progress.
Omar Negyal
Shuyu Gao
Portfolio Managers
J.P. Morgan Asset Management 26th October 2026
PRINCIPAL RISKS AND UNCERTAINTIES
The Board has overall responsibility for reviewing the effectiveness of the Company’s system of risk management
and internal control. The Board is supported by the Audit and Risk Committee in the management of risk. The risk management process is designed to identify, evaluate, manage, and mitigate the significant risks that the Company faces. Whilst the Board believes that it has a robust framework of internal controls in place, this can provide only reasonable, and not absolute, assurance against material financial misstatement or loss and is designed to manage, not eliminate, risk.
In order to monitor and manage risks facing the Company, with the assistance of the Manager, the Audit and Risk Committee maintains a risk matrix, which, as part of the risk management and internal controls process, details the principal and emerging risks that have been identified to face the Company at any given time, together with measures put in place to monitor, manage or mitigate against them as far as practicable. The Audit and Risk Committee considers the Company’s risk matrix at each meeting, and holds a third meeting each year dedicated to a thorough review of the risk matrix.
The risk matrix sets out the risk, which is then rated by the likelihood of occurrence and possible severity of impact, together with the mitigations in place. The Directors, through the Audit and Risk Committee, confirm that they have carried out a robust assessment of the principal and emerging risks facing the Company, including those that would threaten its business model, future performance, solvency or liquidity.
The Audit and Risk Committee conducted a thorough review of the risk matrix during the year to ensure that there is a clear focus on the principal and emerging risks facing the Company. This review led to two changes in how the principal risks are presented. First, Financial Risk has been removed as a separate principal risk, the Committee having concluded that the relevant risks are adequately captured within the Company’s other principal risks. Second, the Committee concluded that the Income and Foreign Currency risks, previously reported separately, are closely interlinked and have therefore been combined, with foreign currency risk now addressed within the Income principal risk.
The principal and emerging risks, along with the financial risks detailed in note 23 to the financial statements in the full Annual Report, facing the Company, how they have changed during the year, the mitigating activities in place, and how the Board, through the Audit and Risk Committee, aims to manage or mitigate these risks are set out below.
The assessed level of risk is classed as high, medium or low. Any change in risk status since it was reported in last year’s Annual Report & Financial Statements is indicated below.
|
|
|
Change in risk status |
Principal risk |
Description |
Mitigating activities |
during the year |
Political and Economic |
The Company’s returns, both capital and revenue, are affected by changes in economic, political and corporate conditions, which can cause market and exchange rate fluctuations. Sustained underperformance of Emerging Markets as an asset class may result from risks such as the imposition of tariffs and other trade barriers, restrictions on the free movement of capital, ability to pay corporate dividends and change in legislation. Economic, political and military conflicts are an ever present reality. So too are the risks of social dislocation or civil unrest within countries. These bring with them risks to economic growth, to investors’ risk appetites and, consequently, to the valuations and distributions of companies in the portfolio. |
This risk is managed to some extent by diversification of investments both by geography and sector, and by regular communication with the Investment Manager on matters of investment strategy and portfolio construction which will directly or indirectly include an assessment of these risks. The Board receives regular reports from the Manager and Corporate Broker regarding market outlook and considers thematic and factor risks, stock selection and levels of gearing on a regular basis. |
This risk remains high. |
Strategy |
If the Company’s business objective and strategy is no longer appropriate or there is increased competition from alternative investment products, it may lead to a lack of investor demand. This may result in the Company’s shares trading at a wider discount to NAV to that which is acceptable. A widening discount out of line with the industry may lead to hostile action by shareholders or arbitrageurs. The Company employs gearing in the form of loans and CFDs. An inappropriate gearing strategy may lead to suboptimal returns; poor performance if over-geared in weak markets or performance foregone if under-geared or not geared at all in strong markets. |
The Board holds a separate meeting devoted to strategy each year. The Board seeks to narrow the discount by undertaking measured buybacks of the Company’s shares. The Company has authority to buyback its existing ordinary shares to enhance the NAV per ordinary share for its shareholders and to reduce the absolute level of discount and discount volatility. The Company and Manager work with the Corporate Broker to seek to increase demand for the Company’s ordinary shares. The Company has in place a sales and marketing programme to promote the Company to retail and institutional investors. This is supported by the Manager. The Board has set a gearing range within which the Investment Managers employ the Company’s gearing on a strategic basis. Gearing levels are detailed in the monthly investment restrictions and guidelines report provided to the Board and the level of gearing is discussed at each Board meeting. |
This risk remains high. The Board continued to undertake buybacks of the Company’s own shares during the year. |
Investment performance |
Inappropriate investment decisions, for example poor stock selection or asset allocation may lead to underperformance against the Company’s Benchmark index and peer companies. |
The Board manages this risk by diversification of investments through its investment restrictions and guidelines, which are monitored and reported by the Manager. The Investment Manager provides the Directors with timely and accurate management information, including performance data and attribution analyses, revenue estimates, currency performance, liquidity reports and peer group analyses. The Board monitors the implementation and results of the investment process with the Portfolio Managers, who attend Board meetings, and review data which show statistical measures of the Company’s risk profile. The Board holds a separate meeting devoted to strategy each year. |
This risk remains medium. The Board continued to monitor the performance of the portfolio over the financial year, which it noted outperformed the Benchmark. Furthermore, the Board takes comfort from the Company’s strong performance. Further details are set out in the full Annual Report. |
Income |
Income related risks are the risk that the Company does not generate sufficient local currency income from the portfolio and the impact of foreign exchange rate risk. Adverse currency movements can affect both the performance of the Company and the income available to pay dividends to shareholders. The Company receives its income in Emerging Market currencies and US dollars, while paying dividends to shareholders in sterling. A strengthening of sterling against these currencies would reduce the sterling value of the income received. |
The Investment Manager has an investment process which is designed to maximise the performance of the portfolio in meeting the investment objective and delivery of income. The Investment Manager does not hedge currency risk. The Board regularly reviews investment and financial reports, including revenue estimates, as well as the impact on income of movements in major currencies, and considers sensitivity analysis of major currency changes. The Company's revenue reserves may be used to support dividend payments should income in any particular year be insufficient. |
This risk remains medium. Given the level of income, the Board has increased the dividend for the financial year, which was wholly funded by the revenue earned in the year. |
Environmental, Social and Governance |
The Board acknowledges that there are risks associated with investments in companies which fail to conduct business in a responsible manner. Insufficient consideration given to financially material ESG factors may lead to poor performance, and a reduction in demand for the Company’s shares as investors seek greater ESG oversight in their portfolios. Climate change may have a disruptive effect on the business models and profitability of individual investee companies, and indeed, whole sectors. |
The Manager has integrated the consideration of financially material ESG factors into the Company’s investment process. Further details are set out in the full Annual Report. |
This risk remains medium. |
Artificial Intelligence |
Artificial Intelligence (‘AI’) has become a powerful tool that will impact a huge range of areas. The pace of AI and its adoption could, and most likely will, impact how portfolio companies transform and evolve their business models. It could also act as a disrupter to current business models and processes leading to emerging uncertainty in corporate valuations. |
The Board works with the Manager to monitor developments concerning AI and its impact on the portfolio, the Company’s service providers and the wider market. The Board receives regular reports from the Investment Manager on the impact of AI on portfolio companies, together with updates from the Manager on the adoption of AI by the Company’s service providers and on developments in the wider market. |
This risk remains medium. |
Accounting, Legal and Regulatory |
Loss of its investment trust status and, as a consequence, gains within the Company’s portfolio could be subject to UK Capital Gains Tax. A breach of the UK Companies Act 2006 could result in the Company and/or the Directors being fined or the subject of criminal proceedings. Breach of the UK Listing Rules or Disclosure, Guidance and Transparency Rules (‘DTRs’) could result in the Company’s shares being suspended from listing which in turn would breach Section 1158 of the Corporation Tax Act 2010. |
The Section 1158 qualification criteria are continuously monitored by the Manager and the results reported to the Board at each Board meeting. The Board relies on the services of its Company Secretary, the Manager and its professional advisers to ensure compliance with the UK Companies Act 2006, the Listing Rules, DTRs and the Alternative Investment Fund Managers’ Directive. |
This risk remains medium. |
Operational and cybercrime |
The Company is dependent on third parties for the provision of services and systems. Disruption to, or failure of, the Manager’s accounting, dealing or payments systems or the depositary’s or custodian’s records could prevent accurate reporting and monitoring of the Company’s financial position. There is also the potential for fraud, errors or control failures at the Company’s Manager and/or third-party service providers, which could result in damage to the Company’s reputation or result in losses. The threat of a cyber-attack is regarded as at least as important as more traditional physical threats to business continuity and security. In addition to threatening the Company’s operations, such an attack is likely to raise reputational issues which may damage the Company’s share price and reduce demand for its shares. |
The Board regularly monitors the services provided by the Manager, its associates and third-party service providers. The key elements designed to provide effective internal control of the Manager and its associates are included within the Risk Management and Internal Control section of the Corporate Governance Report in the full Annual Report. The Manager has in place service level agreements with its service providers that are attested to on an annual basis. The Company benefits directly and/or indirectly from all elements of JPMorgan’s Cyber Security programme, these controls are regularly tested and updates are shared with the Company’s Audit and Risk Committee. The Audit and Risk Committee also reviews a summary of the independently audited controls reports received from the Manager and the key service providers on a six monthly basis. The Company is subject to an annual external audit. |
This risk remains medium. |
EMERGING RISKS
The AIC Code of Corporate Governance (the ‘AIC Code’) requires the Board to put in place procedures to identify and manage emerging risks facing the Company. At each meeting, the Board, through the Audit and Risk Committee, considers whether any emerging risks, which it defines as potential trends, sudden events or changing risks which are characterised by a high degree of uncertainty in terms of occurrence probability and possible impacts on the Company, have arisen. Horizon scanning and ongoing monitoring of the business environment, industry trends, and regulatory changes helps the Audit and Risk Committee to identify emerging risks. Once identified, as the impact of emerging risks is understood, they may be entered on the Company’s risk matrix and mitigating activities considered as necessary.
At the time of the publication of this report, the Audit and Risk Committee has identified rising global bond yields as an emerging risk. Long-term yields in several major markets have reached multi-decade highs, reflecting a combination of factors, including a substantial and rapidly growing volume of corporate debt issuance to fund artificial intelligence infrastructure, alongside elevated government borrowing and inflation concerns. Should yields remain elevated for longer than anticipated or continue to rise, or should returns on AI-related investment disappoint, shares and other higher-risk investments could fall in value as investors favour the higher returns available from safer assets. This could lead to heightened volatility in stock markets, including Emerging Markets, and adversely affect the Company's net asset value and share price. The Committee also continues to note the heightened level and evolving nature of the geopolitical risks facing the Company and is monitoring these accordingly.
TRANSACTIONS WITH THE MANAGER
Details of the management contract are set out in the Directors’ Report in the full Annual Report. The management fee payable to the Manager for the year was £3,785,000 (2025: £3,243,000) of which £nil (2025: nil) was outstanding at the year end.
Included in administration expenses in note 6 in the full Annual Report are safe custody fees amounting to £306,000 (2025: £270,000) payable to JPMorgan Chase Bank, N.A. of which £50,000 (2025: £44,000) was outstanding at the year end.
The Manager may carry out some of its dealing transactions through its group subsidiaries. These transactions are carried out at arm’s length. The commission payable to JPMorgan Securities Limited for the year was £4,000 (2025: £5,000) of which £nil (2025: £nil) was outstanding at the year end.
Stock lending income amounting to £56,000 (2025: £73,000) was receivable by the Company during the year. The commissions in respect of such transactions amounted to £6,000 (2025: £8,000) payable to the lending agent, JPMorgan Chase Bank, N.A.
Other capital charges (handling charges) on dealing transactions amounting to £48,000 (2025: £30,000) were payable to JPMorgan Chase Bank, N.A. during the year of which £7,000 (2025: £5,000) was outstanding at the year end.
The Company also invests in the JPMorgan USD Liquidity Fund, which is managed by JPMorgan Asset Management (Europe) S.à r.l. At the year end this was valued at £18,407,000 (2025: £6,267,000). Income amounting to £303,000 (2025: £159,000) was receivable during the year of which £nil (2025: £nil) was outstanding at the year end.
At the year end, total cash of £1,071,000 (2025: £1,723,000) was held with JPMorgan Chase Bank, N.A. A net amount of interest of £18,000 (2025: £8,000) was receivable by the Company during the year from JPMorgan Chase Bank, N.A. of which £nil (2025: £nil) was outstanding at the year end.
STATEMENT OF DIRECTORS’ RESPONSIBILITIES
The Directors are responsible for preparing the annual report & financial statements in accordance with applicable law and regulations.
Company law requires the Directors to prepare financial statements for each financial year. Under that law, the Directors have elected to prepare the financial statements in accordance with United Kingdom Generally Accepted Accounting Practice (United Kingdom Accounting Standards and applicable law) including FRS 102 ‘The Financial Reporting Standard applicable in the UK and Republic of Ireland’. Under Company law the Directors must not approve the financial statements unless they are satisfied that, taken as a whole, the Annual Report & Financial Statements are fair, balanced and understandable, provide the information necessary for shareholders to assess the Company’s performance, business model and strategy and that they give a true and fair view of the state of affairs of the Company and of the total return or loss of the Company for that period. In order to provide these confirmations, and in preparing these financial statements, the Directors are required to:
• select suitable accounting policies and then apply them consistently;
• make judgements and estimates that are reasonable and prudent;
• state whether applicable UK Accounting Standards have been followed, subject to any material departures disclosed and explained in the financial statements; and
• prepare the financial statements on the going concern basis unless it is inappropriate to presume that the Company will continue in business,
and the Directors confirm that they have done so.
The Directors are responsible for keeping proper accounting records that are sufficient to show and explain the Company’s transactions and disclose with reasonable accuracy at any time the financial position of the Company and to enable them to ensure that the financial statements comply with the UK Companies Act 2006. They are also responsible for safeguarding the assets of the Company and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.
The financial statements are published on the www.jpmorganemergingmarketsdividendincome.co.uk website, which is maintained by the Company’s Manager. The maintenance and integrity of the website maintained by the Manager is, so far as it relates to the Company, the responsibility of the Manager. The work carried out by the Auditor does not involve consideration of the maintenance and integrity of this website and, accordingly, the Auditor accepts no responsibility for any changes that have occurred to the financial statements since they were initially presented on the website. The financial statements are prepared in accordance with UK legislation, which may differ from legislation in other jurisdictions.
Under applicable law and regulations the Directors are also responsible for preparing a Directors’ Report, Strategic Report and Directors’ Remuneration Report that comply with that law and those regulations.
Each of the Directors, whose names and functions are listed in the full Annual Report confirm that, to the best of their knowledge:
• the financial statements, which have been prepared in accordance with United Kingdom Generally Accepted Accounting Practice (United Kingdom Accounting Standards and applicable law), give a true and fair view of the assets, liabilities, financial position and return of the Company; and
• the Strategic Report includes a fair review of the development and performance of the business and the position of the Company, together with a description of the principal risks and uncertainties that it faces.
The Board confirms that it is satisfied that the Annual Report & Financial Statements taken as a whole are fair, balanced and understandable and provide the information necessary for shareholders to assess the Company’s position and performance, business model and strategy.
For and on behalf of the Board
Elisabeth Scott
Chair
26th October 2026
STATEMENT OF COMPREHENSIVE INCOME
|
For the year ended |
For the year ended |
|||||
|
31st July 2026 |
31st July 2025 |
|||||
|
Revenue |
Capital |
Total |
Revenue |
Capital |
Total | |
|
£’000 |
£’000 |
£’000 |
£’000 |
£’000 |
£’000 | |
Net gains on investments held at fair value through |
|
|
|
|
|
| |
profit or loss |
— |
150,357 |
150,357 |
— |
40,075 |
40,075 | |
Net losses on derivative financial instruments |
— |
(410) |
(410) |
— |
— |
— | |
Net foreign currency gains |
— |
403 |
403 |
— |
899 |
899 | |
Income from investments |
19,602 |
— |
19,602 |
19,987 |
236 |
20,223 | |
Income from derivative financial instruments |
335 |
— |
335 |
— |
— |
— | |
Interest receivable and similar income |
377 |
— |
377 |
240 |
— |
240 | |
Gross return |
20,314 |
150,350 |
170,664 |
20,227 |
41,210 |
61,437 | |
Management fee |
(1,135) |
(2,650) |
(3,785) |
(973) |
(2,270) |
(3,243) | |
Other administrative expenses |
(954) |
— |
(954) |
(919) |
— |
(919) | |
Net return before finance costs and taxation |
18,225 |
147,700 |
165,925 |
18,335 |
38,940 |
57,275 | |
Finance costs |
(552) |
(1,287) |
(1,839) |
(613) |
(1,431) |
(2,044) | |
Net return before taxation |
17,673 |
146,413 |
164,086 |
17,722 |
37,509 |
55,231 | |
Taxation |
(1,574) |
(1,038) |
(2,612) |
(1,749) |
219 |
(1,530) | |
Net return after taxation |
16,099 |
145,375 |
161,474 |
15,973 |
37,728 |
53,701 | |
Return per ordinary share (Note 3) |
6.12p |
55.24p |
61.36p |
5.69p |
13.43p |
19.12p | |
All revenue and capital items in the above statement derive from continuing operations.
The ‘Total’ column of this statement is the profit and loss account of the Company and the ‘Revenue’ and ‘Capital’ columns represent supplementary information prepared under guidance issued by the Association of Investment Companies. Net return after taxation represents the profit for the year and also the total comprehensive income.
STATEMENT OF CHANGES IN EQUITY
|
Called up |
Share |
Capital |
|
|
|
|
|
share |
premium |
redemption |
Other |
Capital |
Revenue |
|
|
capital |
account |
reserve |
reserve1 |
reserve1 |
reserve1 |
Total |
|
£’000 |
£’000 |
£’000 |
£’000 |
£’000 |
£’000 |
£’000 |
At 31st July 2024 |
2,973 |
222,582 |
13 |
90,611 |
102,329 |
20,116 |
438,624 |
Repurchase of ordinary shares into Treasury |
— |
— |
— |
(27,505) |
— |
— |
(27,505) |
Net return after taxation |
— |
— |
— |
— |
37,728 |
15,973 |
53,701 |
Dividends paid in the year (note 2) |
— |
— |
— |
— |
— |
(15,298) |
(15,298) |
At 31st July 2025 |
2,973 |
222,582 |
13 |
63,106 |
140,057 |
20,791 |
449,522 |
Repurchase of ordinary shares into Treasury |
— |
— |
— |
(19,929) |
— |
— |
(19,929) |
Net return after taxation |
— |
— |
— |
— |
145,375 |
16,099 |
161,474 |
Dividends paid in the year (note 2) |
— |
— |
— |
— |
— |
(18,745) |
(18,745) |
At 31st July 2026 |
2,973 |
222,582 |
13 |
43,177 |
285,432 |
18,145 |
572,322 |
1 These reserves form the distributable reserves of the Company and may be used to fund distributions to investors.
STATEMENT OF FINANCIAL POSITION
|
At |
At |
|
31st July 2026 |
31st July 2025 |
|
£’000 |
£’000 |
Fixed assets |
|
|
Investments held at fair value through profit or loss |
555,434 |
466,501 |
Investments on loan held at fair value through profit or loss |
23,466 |
5,553 |
Total investments held at fair value through profit or loss |
578,900 |
472,054 |
Current assets |
|
|
Derivative financial instrument assets |
1,365 |
— |
Debtors |
7,694 |
1,296 |
Current asset investments |
18,407 |
6,267 |
Cash at bank |
1,071 |
1,723 |
|
28,537 |
9,286 |
Current liabilities |
|
|
Creditors: amounts falling due within one year |
(34,224) |
(31,423) |
Derivative financial instrument liabilities |
(45) |
— |
Net current liabilities |
(5,732) |
(22,137) |
Total assets less current liabilities |
573,168 |
449,917 |
Provision for liabilities |
(846) |
(395) |
Net assets |
572,322 |
449,522 |
Capital and reserves |
|
|
Called up share capital |
2,973 |
2,973 |
Share premium account |
222,582 |
222,582 |
Capital redemption reserve |
13 |
13 |
Other reserve |
43,177 |
63,106 |
Capital reserve |
285,432 |
140,057 |
Revenue reserve |
18,145 |
20,791 |
Total equity shareholders’ funds |
572,322 |
449,522 |
Net asset value per ordinary share (Note 4) |
221.6p |
166.7p |
STATEMENT OF CASH FLOWS
|
For the |
For the |
|
year ended |
year ended |
|
31st July 2026 |
31st July 2025 |
|
£’000 |
£’000 |
Cash flows from operating activities |
|
|
Net return before finance costs and taxation |
165,925 |
57,275 |
Adjustment for: |
|
|
Net gains on investments held at fair value through profit or loss |
(150,357) |
(40,075) |
Net losses on derivative financial instruments |
410 |
— |
Net foreign currency exchange gains |
(403) |
(899) |
Dividend income |
(19,602) |
(20,223) |
Interest and stock lending income |
(377) |
(167)1 |
Income from derivative financial instruments2 |
(335) |
— |
Realised (losses)/gains on foreign currency exchange transactions |
(146) |
60 |
Realised foreign currency exchange gains/(losses) on the JPMorgan USD |
|
|
Liquidity Fund |
218 |
(81) |
Increase in other debtors |
(10) |
(11) |
Increase/(decrease) in accrued expenses |
73 |
(4) |
Net cash outflow from operating activities before dividends, interest and taxation |
(4,604) |
(4,125) |
Dividends received |
17,614 |
19,567 |
Interest and stock lending income received |
377 |
1671 |
Overseas withholding tax recovered |
146 |
55 |
Indian capital gains tax paid |
(587) |
(409) |
Net cash inflow from operating activities |
12,946 |
15,255 |
Purchases of investments |
(184,174) |
(115,590) |
Sales of investments |
225,657 |
149,340 |
Income received from derivative financial instruments2 |
100 |
— |
Proceeds from settlement of derivative financial instruments2 |
1,121 |
— |
Payments on settlement of derivative financial instruments2 |
(2,851) |
— |
Net cash inflow from investing activities |
39,853 |
33,750 |
Dividends paid |
(18,745) |
(15,298) |
Repurchase of ordinary shares into Treasury |
(20,543) |
(26,892) |
Repayment of loan |
— |
(31,935) |
Drawdown of loan |
— |
31,870 |
Interest paid on bank loans and overdrafts |
(1,668) |
(1,989) |
Interest paid on derivative financial instruments2 |
(183) |
— |
Net cash outflow from financing activities |
(41,139) |
(44,244) |
Increase in cash and cash equivalents |
11,660 |
4,761 |
Cash and cash equivalents at start of year |
7,990 |
3,160 |
Foreign currency exchange movements |
(172) |
69 |
Cash and cash equivalents at end of year |
19,478 |
7,990 |
|
|
|
Cash and cash equivalents consist of: |
|
|
Cash at bank |
1,071 |
1,723 |
Current asset investments in the JPMorgan USD Liquidity Fund |
18,407 |
6,267 |
Total |
19,478 |
7,990 |
1 For the year ended 31st July 2025, stock lending income amounting to £73,000 was not recognised in the Statement of Cash Flows. This omission does not affect cash flows as presented and, accordingly, no restatement has been made.
2 These relate to CFDs.
NOTES TO THE FINANCIAL STATEMENTS
For the year ended 31st July 2026.
1. Accounting policies
(a) Basis of accounting
The financial statements are prepared under the historical cost convention, modified to include fixed asset investments at fair value, and in accordance with the UK Companies Act 2006, United Kingdom Generally Accepted Accounting Practice (‘UK GAAP’), including FRS 102 ‘The Financial Reporting Standard applicable in the UK and Republic of Ireland’ and with the Statement of Recommended Practice ‘Financial Statements of Investment Trust Companies and Venture Capital Trusts’ (the ‘SORP’) issued by the Association of Investment Companies in July 2022.
All of the Company’s operations are of a continuing nature.
During the year ended 31st July 2026, the Company entered into contracts for difference (‘CFDs’) and the new accounting policies have been included below.
Except for the addition of accounting policies in respect of CFDs, all other policies applied in these Financial Statements are consistent with those applied in the preceding year.
Going Concern
The financial statements have been prepared on a going concern basis. In forming this opinion, the Directors have considered the Company’s investment objective, risk management policies, capital management policies and procedures, the nature of the portfolio and revenue as well as cashflow and expenditure projections, taking into account the ongoing impact of worldwide geopolitical instability on the revenue expected from underlying investments in these projections. The Company has adequate resources, an appropriate financial structure and suitable management arrangements in place to continue in operational existence for the foreseeable future. The Company’s investments are in quoted securities which are readily realisable and exceed its liabilities significantly. Gearing levels and compliance with loan covenants are reviewed by the Board on a regular basis. The Board has considered the Company’s adherence with its current lending covenants and concluded that these can be readily met. The Company’s loan facility matures in November 2026 and the Board has resolved to repay it on maturity rather than seek an extension, with future gearing to be achieved through CFDs. Gearing will remain within the limits set by the Company’s investment policy, repayment of the facility can be made given the liquidity of the portfolio referred to above, and any margin calls on CFD positions could likewise be met from the portfolio. The Board is therefore satisfied that the use of CFDs for gearing does not affect the Company’s going concern status. The Company’s key third-party suppliers, including its Manager, are not experiencing any operational difficulties to adversely affect their services to the Company. The Board is mindful of the economic outlook and geopolitical landscape, and the longer term impact this may have on the global economy, including Emerging Markets and the sectors in which the Company operates. These risks continue to be monitored through the Company’s risk matrix and are supplemented with horizon scanning where applicable. For these reasons, the Directors consider that there is reasonable evidence to continue to adopt the going concern basis in preparing the financial statements. They have not identified any material uncertainties to the Company’s ability to continue to do so over a period of at least 12 months from the date of approval of these financial statements to 26th October 2027.
2. Dividends
(a) Dividends paid and declared
|
2026 |
2025 | ||
|
Pence |
£’000 |
Pence |
£’000 |
Dividends paid |
|
|
|
|
Fourth interim dividend in respect of prior year |
2.60 |
6,968 |
2.40 |
6,930 |
First interim dividend paid |
1.50 |
3,943 |
1.00 |
2,859 |
Second interim dividend paid |
1.50 |
3,943 |
1.00 |
2,790 |
Third interim dividend paid |
1.50 |
3,891 |
1.00 |
2,719 |
Total dividends paid in the year |
7.10 |
18,745 |
5.40 |
15,298 |
Dividends declared |
|
|
|
|
Fourth interim dividend declared |
1.50 |
3,870 |
2.60 |
6,968 |
In respect of the year ended 31st July 2026, the fourth interim dividend of 1.50p per ordinary share amounting to £3,870,000 (2025: 2.60p per ordinary share amounting to £6,968,000) was declared with an ex-dividend date of 10th September 2026 and paid on 16th October 2026. In accordance with the accounting policy of the Company, this dividend will be reflected in the Financial Statements for the year ending 31st July 2027.
(b) Dividend for the purposes of Section 1158 of the Corporation Tax Act 2010 (‘Section 1158’)
The requirements of Section 1158 are considered on the basis of dividends declared in respect of the financial year, shown below.
|
2026 |
2025 | ||
|
Pence |
£’000 |
Pence |
£’000 |
First interim dividend |
1.50 |
3,943 |
1.00 |
2,859 |
Second interim dividend |
1.50 |
3,943 |
1.00 |
2,790 |
Third interim dividend |
1.50 |
3,891 |
1.00 |
2,719 |
Fourth interim dividend |
1.50 |
3,870 |
2.60 |
6,968 |
Total dividends for Section 1158 purposes |
6.00 |
15,647 |
5.60 |
15,336 |
The current year revenue available for distribution by way of dividend for the year is £16,099,000 (2025: £15,973,000). The revenue reserve after payment of the fourth interim dividend will amount to £14,275,000 (2025: £13,823,000).
3. Return per ordinary share
The Revenue, Capital and Total return shown below is the Net return after taxation in the Statement of Comprehensive Income in the full Annual Report.
|
2026 |
2025 |
|
£’000 |
£’000 |
Revenue return |
16,099 |
15,973 |
Capital return |
145,375 |
37,728 |
Total return |
161,474 |
53,701 |
Weighted average number of ordinary shares in issue during the year |
263,141,015 |
280,885,971 |
Revenue return per ordinary share |
6.12p |
5.69p |
Capital return per ordinary share |
55.24p |
13.43p |
Total return per ordinary share |
61.36p |
19.12p |
4. Net asset value per ordinary share
|
2026 |
2025 |
Net assets (£’000) |
572,322 |
449,522 |
Number of ordinary shares in issue |
258,226,421 |
269,640,266 |
Net asset value per ordinary share |
221.6p |
166.7p |
5. Analysis of changes in net debt
|
|
|
Foreign |
|
|
|
|
currency |
|
|
As at |
|
exchange |
As at |
|
31st July 2025 |
Cash flows |
movements |
31st July 2026 |
|
£’000 |
£’000 |
£’000 |
£’000 |
Cash and cash equivalents |
|
|
|
|
Cash at bank |
1,723 |
(652) |
— |
1,071 |
Current asset investments1 |
6,267 |
12,312 |
(172) |
18,407 |
|
7,990 |
11,660 |
(172) |
19,478 |
Borrowings |
|
|
|
|
US$40 million ICBC loan – maturing November 2026 |
(30,226) |
— |
503 |
(29,723) |
|
(30,226) |
— |
503 |
(29,723) |
Total net debt |
(22,236) |
11,660 |
331 |
(10,245) |
1 JPMorgan USD Liquidity Fund, a AAA rated money market fund which seeks to achieve a return in line with prevailing money market rates whilst aiming to preserve capital consistent with such rates and to maintain a high degree of liquidity.
JPMORGAN FUNDS LIMITED
27th October 2026
For further information, please contact:
Joel Clopon
For and on behalf of
JPMorgan Funds Limited
Telephone: 0800 20 40 20 or +44 1268 44 44 70
Neither the contents of the Company’s website nor the contents of any website accessible from hyperlinks on the Company’s website (or any other website) is incorporated into, or forms part of, this announcement.
ENDS
A copy of the annual report will be submitted to the National Storage Mechanism and will shortly be available for inspection at https://data.fca.org.uk/#/nsm/nationalstoragemechanism
The Annual Report will also shortly be available on the Company’s website at www.jpmorganemergingmarketsdividendincome.co.uk where up to date information on the Company, including daily NAV and share prices, factsheets and portfolio information can also be found.
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