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'Strong nerves' pay off for Jupiter's emerging income trust

'Strong nerves' pay off for Jupiter's emerging income trust

"Strong nerves" demonstrated by the investment manager of Jupiter’s Emerging and Frontier Income trust (JEFI) have paid off, as investor sentiment has swung back in favour of the trust.

The trust reported a share price total return of 26.9 per cent compared with its benchmark (the MSCI emerging markets index) seeing a 7.7 per cent return for the six months to March 31. The trust saw a net asset value total return of 23.9 per cent.

In a statement to the stock exchange this morning (June 26), John Scott said: "A year ago, I said that this was a time for strong nerves, and in the 12 months that have passed these have been demonstrated by the company's investment adviser, which has broadly stuck to its guns and adhered to its investment philosophy - with excellent results.

"While investment patterns rotate, a consistent, repeatable investment process underpinned by sound principles tends to deliver superior returns over the long term.

"Happily, we are now seeing good recovery in our revenue account, which should allow us to revert to the progressive dividend policy we intend to offer to shareholders."

The trust said its portfolio benefitted from being underweight in China and overweight in Mexico, as well as seeing its small cap allocation as a key performance driver as companies that were disproportionately impacted by the sell-off in the first half of 2020 continued to recover.

The trust added three new holdings to its portfolio including two Egyptian firms (banking group Credit Agricole Egypt, and dairy products manufacturer Obour), along with Taiwanese chip designer Elan.

JEFI will pay a second quarterly interim dividend of 1p per share today (June 25).

Ross Teverson, fund manager of JEFI, added: "In a world where the valuations for many asset classes look high relative to history, the opposite continues to hold true for many companies and sectors within emerging and frontier markets, despite the potential for strong long-term growth. 

“As investors continue to look past the impact of the pandemic, we expect that the scope for operational recovery and rerating from attractive valuations will be positive for stock performance."

sally.hickey@ft.com