JMG Jpmorgan Emerging Markets Investment Trust Plc

LONDON STOCK EXCHANGE ANNOUNCEMENT

JPMORGAN EMERGING MARKETS INVESTMENT TRUST PLC

HALF YEAR REPORT & FINANCIAL STATEMENTS

FOR THE SIX MONTHS ENDED 31ST DECEMBER 2024

Legal Entity Identifier: 5493001VPQDYH1SSSR77

Information disclosed in accordance with the DTR 4.2.2

JPMorgan Emerging Markets Investment Trust plc (the 'Company') announces its half year results for the period ended 31st December 2024.

Highlights

·    Net asset value ('NAV') per share on a total return basis was 2.8%, while total return to shareholders was 2.1%. This compares with a 1.0% increase in the Benchmark, the MSCI Emerging Markets Index with net dividends reinvested, in sterling terms.

·    In the five years ended 31st December 2024, the Company has delivered an annualised total return of 3.6% on a NAV basis, outpacing the Benchmark, which returned 2.8% on the same basis.

·    The Board has declared an interim dividend of 0.65 pence (2023: 0.60 pence), to be paid on 25 April 2025 to shareholders on the register as at the close of business on 14 March 2025.

·    The Company has received notable recognition, including winning the AJ Bell Investment Awards 2024 for Emerging Markets Equity Active, a recommendation from Winterflood, and coverage in Investors Chronicle, Shares, and MoneyWeek. It is also featured in Hargreaves Lansdown's '5 Investment Trusts to Watch for 2025' and has a 'Buy' rating on the AJ Bell Select List.

Aidan Lisser, Chairman of JMG, commented:

"While Emerging Markets equities showed a positive performance over the full calendar year, the combination of a strong US equity market, rising bond yields, and a strengthening US dollar, along with other macroeconomic and geopolitical factors, contributed to a challenging period in the second half of the year, culminating in a weak final quarter of 2024. It is encouraging to report that both the Net Asset Value (NAV) and share price outperformed the benchmark, albeit in an environment of low absolute returns."

"We have learnt to expect the unexpected and the outlook for emerging markets continues to be uncertain. The Portfolio Managers' focus continues to be on identifying high-quality, globally competitive companies, leveraging J.P. Morgan's extensive proprietary emerging markets research insights to drive long-term value for our shareholders."

JMG's Porfolio Managers, Austin Forey and John Citron, commented:

"In an era of heightened political risks in many parts of the world, our focus must remain on finding companies that create value for shareholders by offering value to their customers with the products or services that they sell.

In all but the most extreme economic scenarios, it is what companies achieve that produces the biggest difference in outcomes, in our experience. We believe that your portfolio owns many of the best businesses that can be found in emerging markets, and in an uncertain world, investing in companies that give customers something that they want and value is one way to look forwards to the future with confidence, regardless of the uncertainty that it always holds."

CHAIR'S STATEMENT

Positive first half despite a challenging backdrop

In a difficult period for emerging markets, your company benefitted from strong technology sector performance as well as gains from several Indian company holdings. Overall, while Emerging Markets equities showed a positive performance over the full calendar year, the combination of a strong US equity market, rising bond yields, and a strengthening US dollar, along with other macroeconomic and geopolitical factors, contributed to a challenging period in the second half of the year, culminating in a weak final quarter of 2024. All in all a 'noisy environment', as aptly described in our Portfolio Managers' report.

Investment performance ahead of benchmark

It is encouraging to report that both the Net Asset Value (NAV) and share price outperformed the benchmark, albeit in an environment of low absolute returns. The Company's NAV total return over the six months to 31st December 2024 was +2.8%, while the total return to shareholders was +2.1%. This compares with a 1.0% increase in the benchmark, the MSCI Emerging Markets Index with net dividends reinvested, in sterling terms.

In our last Annual Report, we discussed the Board's deep dive review into the Company's performance, highlighting adjustments to the portfolio, certain enhancements to the Manager's existing research capabilities, and the identification of new opportunities. In their Portfolio Managers' report, Austin and John discuss the factors contributing to returns exceeding the benchmark, as well as the future focus of the portfolio.

Enhanced share buybacks

During the period, the Company's shares traded at an average discount to NAV of 12.3%. The discount ranged between 8.8% and 15.0% and ended the period at 12.8%.

Over the six-month period 38,187,509 shares (representing 3.6% of the opening share capital ('OSC') were bought back into Treasury at an average discount of 12.3% and at a cost of £42.0 million. Your board increased the rate of share buybacks as a percentage of OSC in the final quarter of 2024 to an average annualised rate of 10% (up from 4% in the previous quarter), noting difficult market conditions in the UK as well as the complex emerging markets environment, outlined above. Share repurchases have continued since the period end at an annualised rate of 11.8%.

Shares repurchased are held in Treasury and such Treasury shares and any new ordinary shares will only be sold or issued at a premium to NAV.

The Board regards regular and consistent implementation of share buybacks as a key component of our discount management strategy, and regularly assesses the merits of buying back shares.

As shares are only bought back at a discount to the prevailing NAV, share buybacks do enhance the NAV per share for the remaining shareholders and also play a role in reducing volatility. These actions help to align the share price more closely with the underlying value of the portfolio, benefiting our shareholders and ensuring the long-term success of the Company.

As highlighted in our last Annual Report, share buybacks are one of several measures we employ to manage the discount and enhance demand for our shares. Our comprehensive approach includes a focus on long-term outperformance, competitive fees, effective marketing, as well as mechanisms such as our three-yearly continuation vote and the five-year performance-related conditional tender offer for the period up to 30th June 2029.

Revenue and dividend increase

The Company's primary focus is to generate a total return for shareholders, in line with its investment objective, rather than targeting a particular level of income. Dividends received in sterling terms can fluctuate according to the underlying earnings of portfolio holdings, as well as changes in the composition of the portfolio and currency movements. This means that the level of dividends may vary.

In respect of the financial year to 30th June 2024 an interim dividend of 0.60 pence per share and a final dividend of 1.30 pence per share were paid to shareholders in April 2024 and November 2024 respectively, amounting to a total dividend of 1.90 pence per share for the full year. This represented an increase of 15.2% on the total of 1.65 pence per share paid in the previous year.

Net revenue after taxation for the six months to 31st December 2024 was £8.15 million (2023: £8.03 million) and earnings per share were 0.75 pence (2023: 0.70 pence). The Board has declared an interim dividend of 0.65 pence (2023: 0.60 pence), to be paid on 25 April 2025 to shareholders on the register as at the close of business on 14th March 2025. The ex-dividend date will be 13th March 2025.

Appointment of new Director

As previously reported, Andrew Page retired fr om the Board at the Annual General Meeting held in November 2024 following completion of his nine-year tenure. The Board is grateful to Andrew for the very significant contribution he provided to the Company during his tenure.

The Board gives considerable time to succession planning in order to ensure it retains an appropriate balance of skills, knowledge and diverse perspectives. To this end, we were delighted to appoint Dean Buckley as a Non-Executive Director with effect from 2nd January 2025. Dean is an experienced investment professional who has held senior positions in a number of asset management firms during his career and brings with him a wide range of experience to benefit the Board, including in the investment trust arena. He is currently the Non-Executive Chairman of Alliance Witan PLC, Fidelity Special Values PLC and Evelyn Partners Fund Solutions Limited. He is also a Non-Executive Director of Baillie Gifford & Co. Limited.

The Board can confirm that its current composition is compliant with all applicable diversity targets for UK companies listed on the London Stock Exchange. It is the intention that this will continue to be the case.

2025 Annual General Meeting (AGM), shareholder engagement and voting

I would like to take this opportunity to express our gratitude to the shareholders who participated in our AGM in November 2024, both in person and online. Your engagement and the quality of your questions are important to us, and they play a vital role in shaping the future of our company.

Looking ahead, I can confirm that our AGM in 2025 will be held on Friday 7th November. We hope this date will be convenient for many of you, and we assure you that there will be plenty of refreshments available to make the event enjoyable and welcoming.

The ability for shareholders to engage and express their views through voting is one of the benefits of our investment company structure. Recent activity in the sector has highlighted the significance of voting and we cannot overstate the importance of shareholders making their views known and voting on their intentions. Your input is critical and we encourage all shareholders to actively participate in the decision-making process.

The Board is fully supportive of recent initiatives aimed at removing barriers and facilitating shareholder voting on retail platforms, including the Association of Investment Companies' (AIC) 'My share, my vote' campaign. We believe these efforts will enhance shareholder engagement and ensure that your voices are heard. The AIC website provides some very helpful information on how to go about the process of voting (www.theaic.co.uk)

Ongoing communication

The Board continues to focus on activities to engage existing shareholders and attract new investor interest.. Over the past year, we have increased our efforts to communicate with retail investors. We participated in the JPMorgan Investment Trusts event for retail investors and encourage shareholders to meet us in person at the AGM or view it online.

In addition, the Company undertakes an active investor relations programme aimed at wealth managers, institutions and other professional investors. If at any time shareholders wish to communicate with the Board directly, you can do so by contacting the Company Secretary in the first instance at invtrusts.cosec@jpmorgan.com

We encourage you to visit our company website www.jpmemergingmarkets.co.uk where we regularly post insight articles and market commentary from the Portfolio Management team, as well as monthly performance and portfolio updates and sponsored research. Both existing and potential shareholders can sign up to receive regular email updates providing news and views, as well as the latest performance information. Subscribe via the website by visiting https://tinyurl.com/JMG-Sign-Up, or scan the QR code shown in the Half Year Report.

Awards and recommendations during the period

We are pleased that in the second half of the year, the Company received a number of awards and endorsements. These include the AJ Bell Investment Awards 2024, Winner Emerging Markets Equity Active, a recommendation from Winterflood, and press coverage in respected publications such as Investors Chronicle, Shares, and MoneyWeek. Additionally, we are proud to be featured in Hargreaves Lansdown's '5 Investment Trusts to Watch for 2025', the firm's top investment trust picks for 2025 and beyond, as well as in the AJ Bell Select List with a 'Buy' rating.

Outlook - the narrative remains uncertain but with potential

As Austin and John point out in their report, we have learnt to expect the unexpected and the outlook for emerging markets continues to be uncertain. US interest rates may not ease to the degree previously predicted and the dollar could move higher still. Meanwhile the effect of recent trade and tariff skirmishes are hard to read but unlikely to be favourable. On the other hand, the valuation gap between EM and developed markets is wide and earnings growth prospects over the long term are strong. Structural factors such as favourable demographics, urbanisation and rapid digital adoption continue to underpin the sector's long-term potential.

Against this backdrop, the imperative for skilled, active portfolio management is clear. The Portfolio Managers' focus continues to be on identifying high-quality, globally competitive companies, leveraging J.P. Morgan's extensive proprietary emerging markets research insights to drive long-term value for our shareholders.

Aidan Lisser

Chair                                                                                                                                           24th February 2025

PORTFOLIO MANAGERS' REPORT

The last six months have been a busy period in emerging markets, featuring attempts at an economic stimulus package in China, continued currency woes in Brazil and Mexico, and ongoing efforts to make radical economic reforms in both Turkey and Argentina. Late in the year, of course, the US election result raised fresh questions about America's trade policy and geopolitical stance, and how that will affect the countries that your Company invests in.

In this noisy environment, returns from your portfolio exceeded those from the benchmark index, with the net asset value per share up a little less than 3%, compared to an index return of 1%. We can explain some of the main contributors to this outcome. First, the extraordinary performance of businesses in America linked to AI (artificial intelligence), most notably Nvidia, would not be possible without the manufacturing capabilities of companies in Korea and Taiwan, and this has been reflected in share prices. The performance of the technology sector in emerging markets has been strong, and dominated especially by Taiwan Semiconductor (TSMC); in fact TSMC alone accounted for more than half the return of the entire emerging markets index in 2024. Your fund, fortunately, has had a large investment in TSMC for many years, and in a number of other businesses in the hardware supply chain, and these investments were a notable contributor to performance in the latest period.

The two markets, however, which have dominated outcomes for the trust over the last couple of years have been India and China. In China, the overall contribution to performance was negative over the last six months, though stock price moves were heavily influenced by the government's attempts to shore up a struggling economy. These produced a very sharp rally at the end of September, though the market subsequently drifted back down as the effectiveness of the policies began to be questioned. Our structural view on China remains a negative one; while there are some very impressive businesses in China that we are happy to own in your portfolio, political risk remains an ever-present factor, and the economy is facing significant challenges as a result of over-investment and high levels of debt.

India is almost a mirror image of China: the economy has been growing robustly and the equity market has been on fire, with rising valuations contributing half of the market's 50% rise in the last couple of years. We felt that share prices were getting stretched in many places, and did not capture all of that rise; but in the last six months, as the momentum in the market has stalled and many stocks began to correct, your company's investments eked out some small gains while the market as a whole declined. As a result, India was the market with the largest positive contribution to the company's relative performance in the latest half year.

As always, there are many other factors that we could comment on, but in the interests of brevity, we should perhaps finish with a brief comment about the outlook. After many years investing in emerging markets, we have learnt to expect the unexpected. We question whether anybody can predict the actions of the new US administration or how they will affect emerging markets; most probably, interest rates around the world will remain higher for longer, but in an era of heightened political risks in many parts of the world, our focus must remain on finding companies that create value for shareholders by offering value to their customers with the products or services that they sell. In all but the most extreme economic scenarios, it is what companies achieve that produces the biggest difference in outcomes, in our experience. We believe that your portfolio owns many of the best businesses that can be found in emerging markets, and in an uncertain world, investing in companies that give customers something that they want and value is one way to look forwards to the future with confidence, regardless of the uncertainty that it always holds.

Austin Forey

John Citron

Portfolio Managers                                                                                                                     24th February 2025

INTERIM MANAGEMENT REPORT

The Company is required to make the following disclosures in its half year report:

Principal and Emerging Risks and Uncertainties

The principal and emerging risks and uncertainties faced by the Company have not changed from those reported in the Annual Report and Financial Statements for the year ended 30th June 2024 ('AFR') and fall into the following broad categories: investment underperformance; loss of investment team or investment manager; political and economic; strategy/business management; operational and counterparty failure and cyber crime; share price discount; change of corporate control of the manager; legal and regulatory; corporate governance and shareholder relations; and financial. Information on each of these areas is given in the Business Review within the AFR.

Related Parties Transactions

During the first six months of the current financial year, no transactions with related parties have taken place which have materially affected the financial position or the performance of the Company.

Going Concern

The Directors believe, having considered the Company's investment objectives, risk management policies, capital management policies and procedures, nature of the portfolio and expenditure projections, that the Company has adequate resources, an appropriate financial structure and suitable management arrangements in place to continue in operational existence for the foreseeable future and more specifically, that there are no material uncertainties pertaining to the Company that would prevent its ability to continue in such operational existence for at least 12 months from the date of the approval of this half year financial report. For these reasons, they consider there is reasonable evidence to continue to adopt the going concern basis in preparing the accounts.

Directors' Responsibilities

The Board of Directors confirms that, to the best of its knowledge:

(i)      the condensed set of financial statements contained within the half yearly financial report has been prepared in accordance with FRS 104 'Interim Financial Reporting' and gives a true and fair view of the state of affairs of the Company and of the assets, liabilities, financial position and net return of the Company, as at 31st December 2024 as required by the UK Listing Authority Disclosure and Transparency Rules 4.2.4R; and

(ii)     the interim management report includes a fair review of the information required by 4.2.7R and 4.2.8R of the UK Listing Authority Disclosure and Transparency Rules.

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 accounting 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.

For and on behalf of the Board

Aidan Lisser

Chair                                                                                                                                           24th February 2025

CONDENSED STATEMENT OF COMPREHENSIVE INCOME

All revenue and capital items in the above statement derive from continuing operations. No operations were acquired or

discontinued in the period.

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.

The net return/(loss) after taxation represents the profit/(loss) for the period and also the total comprehensive income.

CONDENSED STATEMENT OF CHANGES IN EQUITY

¹     This reserve forms the distributable reserve of the Company and is used to fund distributions to investors.

²     During the period, the Company undertook an Asset Reunification Program to reunite inactive shareholders with their shares and unclaimed dividends. In accordance with the Company's Articles of Association, the Company exercised its right to forfeit the shares belonging to untraced shareholders for a period of 12 years or more. These shares were sold in the open market and the net proceeds returned to the Company. In addition, any unclaimed dividends older than 12 years from the date of payment of such dividend were forfeited and returned to the Company.

CONDENSED STATEMENT OF FINANCIAL POSITION

¹     Cash at bank in the Statement of Financial Position has been restated to exclude the investment in the JPMorgan USD Liquidity Fund of £6,480,000 for the period ended 31st December 2023 and £4,844,000 for the year ended 30th June 2024, and to disclose this separately as Current asset investments to conform with the statutory format as required by the Companies Act. There is no impact on other line items in the Statement of Financial Position nor on the total current assets.

²     The July 2024 Indian Budget announced an increase to the capital gains tax (CGT) rates. With effect from 23rd July 2024, the short term CGT rate was increased from 15% to 20% and the long term CGT rate was increased from 10% to 12.5%. As these rates had not been enacted as at 31st December 2023 and 30th June 2024, CGT balances at those dates continued to be measured at 15% and 10% for the short-term and long-term CGT rates, respectively. The increased CGT rates have since been applied and reflected in the tax provision as at 31st December 2024.

CONDENSED STATEMENT OF CASH FLOWS

¹ The term 'cash and cash equivalents' is used for the purposes of the Statement of Cash Flows, and represents Cash at bank and funds held in the JPMorgan USD Liquidity Fund (shown as Current asset investments in the Condensed Statement of Financial Position). 

NOTES TO THE CONDENSED FINANCIAL STATEMENTS

For the six months ended 31st December 2024

1.  Financial statements

The information contained within the condensed financial statements in this half year report has not been audited or reviewed by the Company's auditors.

The figures and financial information for the year ended 30th June 2024 are extracted from the latest published financial statements of the Company and do not constitute statutory accounts for that year. Those financial statements have been delivered to the Registrar of Companies and including the report of the auditors which was unqualified and did not contain a statement under either section 498(2) or 498(3) of the Companies Act 2006.

2.  Accounting policies

The financial statements have been prepared under the historical cost convention, modified to include fixed asset investments at fair value, and in accordance with the Companies Act 2006, FRS 102 'The Financial Reporting Standard applicable in the UK and Republic of Ireland' of the United Kingdom Generally Accepted Accounting Practice ('UK GAAP') and with the Statement of Recommended Practice 'Financial Statements of Investment Trust Companies and Venture Capital Trusts' (the revised 'SORP') issued by the Association of Investment Companies in July 2022.

FRS 104, 'Interim Financial Reporting', issued by the Financial Reporting Council ('FRC') in March 2015 has been applied in preparing this condensed set of financial statements for the six months ended 31st December 2024.

All of the Company's operations are of a continuing nature.

The accounting policies applied to this condensed set of financial statements are consistent with those applied in the financial statements for the year ended 30th June 2024.

3.  Return per share

4.  Dividends paid

¹     As a result of the Asset Reunification Program to reunite inactive shareholders with their shares and unclaimed dividends, any unclaimed dividends older than 12 years from the date of payment of such dividend were forfeited and returned to the Company.

All dividends paid in the period have been funded from the revenue reserve.

An interim dividend of 0.65p (2024: 0.60p) per share amounting to £6,962,000 (2024: £6,814,000), has been declared payable in respect of the six months ended 31st December 2024. The interim dividend will be paid on 25th April 2025 to shareholders on the register at the close of business on 14th March 2025. The ex-dividend date will be 13th March 2025.

5. Net asset value per share

6.  Fair valuation of instruments

The fair value hierarchy disclosures required by FRS 102 are given below.

¹     The Level 3 investment relates to the Company's holdings in the Russian stock Sberbank of Russia. The haircut applied for valuation is now 100%.

There have been no transfers between Levels 1, 2 or 3 during the period.

¹     The Level 3 investment relates to the Company's holdings in the Russian stock Sberbank of Russia.

As at 31st December 2024, the holding in the Russian stock Sberbank of Russia has been written down to nil due to the prolonged conflict with Ukraine and the sanctions imposed on Russia since 25th February 2022. For the previous periods ending 31st December 2023 and 30th June 2024, the fair value of this stock was determined by taking the live market price as at 25th February 2022 and applying a 99% reduction to the valuation.

7.  Analysis of change in net cash/(debt)

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

24th February 2025

For further information, please contact:

Divya Amin

For and on behalf of

JPMorgan Funds Limited

Telephone: 0800 20 40 20 or 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 half year will be submitted to the National Storage Mechanism and will shortly be available for inspection at https://data.fca.org.uk/#/nsm/nationalstoragemechanism

The Half Year Report will also shortly be available on the Company's website at www.jpmemergingmarkets.co.uk where up to date information on the Company, including daily NAV and share prices, factsheets and portfolio information can also be found.