It has a lower-than-average total expense ratio (TER) – a measure of the total cost of investing in the trust – of 1.32 per cent and an annual management charge of 1 per cent. Its FE Risk Score is 85.
Performance of trust since launch vs sector
Source: FE Analytics
Since launch the trust has returned 18.9 per cent, while its peers in the IT Global Emerging Markets Equities sector have returned an average of 6.9 per cent. The investment trust has done especially well in the past six months. It was caught up with most vehicles in August’s market rout, but it has rebounded faster than its peers.
While a number of emerging market vehicles hold UK- or US-listed companies, claiming their expansion into China is providing investors with exposure to the region, manager Richard Titherington has bought companies such as Saudi Arabian Fertilizer, Petrochina and Malaysian-listed betting group Berjaya Sports Toto Berhad, giving investors real access to growing economies.
All of this comes at a price, however; our data shows the investment trust trading at a premium of 2.15 per cent. This is still cheap compared with its average premium of 3 per cent and its high of 7.9 per cent.
Alternatives
Investors who like the theme of growth from emerging markets with the added bonus of an income could also take a look at Aberdeen Asian Income or Schroder Oriental Income. Both have a longer track record than the JPM trust, having launched in 2005, and a similar yield of 3.7 per cent and 3.9 per cent respectively. The Aberdeen IT is on a premium of 4.3 per cent, expensive compared to its average of 3.5 per cent, while the Schroder IT is slightly cheaper than usual, at 0.5 per cent premium compared to an average of a 1.1 per cent premium.
The main difference is that Titherington’s fund invests across the globe, with 12.5 per cent in Europe ex UK, 9 per cent in South Africa and 50 per cent in the Pacific basin, for example, while the Aberdeen and Schroders investment trusts are Asia-focused.
Performance of trusts vs sector over 5-yrs
Source: FE Analytics
This remit hasn’t been to their detriment, though. Since 2005 the Aberdeen fund has returned 109 per cent and the Schroders investment trust has returned 82 per cent, while the average fund in the IT Asia Pacific ex Japan Equities sector has returned 71.4 per cent. Both lost less than their peers in the credit crisis, and the Aberdeen fund held up fairly well in August’s slump.
The IFA’s view
"The JPM investment trust was a good launch, and the vehicle is already a decent size. Its yield has been around 4.8 per cent and it’s got a strong manager," said Stephen Peters, investment trust analyst at Charles Stanley.
"The investment trust is doing something different and it’s in a great place where the sector is offering something better than OEICs. The yield, performance and fees are similar, but it’s larger than many open-ended emerging market income funds."
Verdict
The JPMorgan Global Emerging Markets Income Trust has got off to a great start since its launch. Volatility is not too high and the prospect of income makes the vehicle all the more attractive.