Different dividends

In JPMorgan Emerging Markets Dividend Income (JEMI), every one of the companies pays a dividend, providing the opportunity for regular income. Collectively, this income helps the trust generate a dividend that is paid out quarterly to shareholders. In addition to looking for dividend-paying stocks, JEMI looks for high-quality companies that are trading at attractive valuations.

JPMorgan Emerging Markets Growth & Income (JMGI) does not require companies to pay a dividend. Instead, the investment strategy focuses on long-term quality growth. The investment trust pays a quarterly dividend equivalent to 1% of the trust’s net asset value. However, this dividend is paid out of a combination of income and capital, allowing JMGI to focus on growth-oriented companies, rather than dividend-paying stocks.

Diverging sector focus

The JEMI and JMGI portfolio managers generally aren’t even looking in the same part of the emerging market equity universe: JEMI is focused on the core value and JMGI on core growth.

JEMI’s focus on stocks with a dividend yield—preferably higher than the market—leads the portfolio managers toward companies with reliable and growing dividends. Many banks pay relatively high dividends and trade at reasonable valuations, while also featuring quality characteristics, such as high returns on equity and strong balance sheets. As a result, financials are the biggest overweight position, with roughly 30% of the portfolio invested in the sector. Top active positions include the National Bank of Greece and TISCO Financial, a small auto-finance company based in Thailand.

JMGI also has a large allocation to financials—roughly a quarter of the portfolio—and is overweight the sector, led by positions in AIA, a life insurance company based in Hong Kong that is benefiting from higher savings rates, and BBVA, a Spanish bank with significant operations in Spanish-speaking emerging markets.

However, JMGI’s largest exposure is to the technology sector, where the trust maintains a long-standing overweight, given the strong growth prospects for many companies driven by the investment in AI. Semiconductor companies TSMC and SK Hynix are the two single largest active positions in the portfolio. The portfolio managers acknowledge that valuations have become more extended in the technology sector, however, they believe many companies will ultimately meet their revenue and earnings expectations.

In contrast, while over a quarter of the JEMI portfolio is invested in technology stocks, this represents a meaningful underweight the technology sector. Top positions in the portfolio include Samsung Electronics, a dominant Korean technology manufacturer, and ASE Technology, a Chinese semiconductor packaging company. The portfolio does not own SK Hynix and its position in TSMC is meaningfully smaller than the benchmark’s and significantly smaller than JMGI’s. This positioning is a big change from two years ago, when JEMI was overweight the technology sector. High valuations have pushed down dividend yields and the investment team decided to trim the technology position.

Another big change is the way the JEMI portfolio managers are thinking about many of the commodities companies in the materials sector. Although the portfolio is still slightly underweight the sector, JEMI has been adding position over time as the portfolio managers have become more comfortable with dividend policies of some companies involved in mining copper, gold and iron. These companies have highly attractive free cash flow, which they pay out to shareholders as dividends.

Once again, the JMGI portfolio managers view the same sector through a different lens. JMGI is underweight materials stocks due to the companies’ dependency on commodity prices, which can be volatile. The portfolio managers prefer to invest in companies with more predictable earnings.

Complementary country positioning

At first glance, the portfolios may seem to have more in common at the country level but a closer look reveals notable differences in positioning.

JEMI has typically been underweight India, largely due to valuations. JMGI is now also slightly underweight India, but this is a notable change from a historical overweight. The portfolio managers have been reducing the position due to high valuations but acknowledge they have a long list of Indian companies they are keen to take positions in at more attractive valuations. Buying opportunities may indeed emerge as India, a big oil importer, faces headwinds from high oil prices due to the conflict in the Middle East.

JEMI and JMGI are also both overweight Brazil, but through very different holdings. JEMI finds many attractive companies in Brazil, such as TIM Brazil, a mobile communications company, thanks to the country’s regulation that companies must have a 25% payout ratio. This requirement encourages management teams to think about cost of capital and capital allocation.

JMGI has a position in Nu Holdings, the largest digital bank in the world with major operations across Brazil, Mexico and Columbia, which is listed on the US. The company pays no dividend and instead is investing all of its capital in growth. The portfolio also holds Weg, a Brazilian industrial company that is benefiting from the global electrification and infrastructure buildout.

Investing in emerging markets

Interest in emerging market equities has picked up following strong performance of the asset class in 2025. Investors have many ways to access the enormous range of companies across the emerging markets—from small, fast-growing technology companies to large, established banks offering high dividend yields. JEMI and JMGI offer two complementary options to participate in emerging market equities while also collecting income.

*The companies mentioned are for illustrative purposes only, their inclusion is no recommendation to buy or sell.

JPMorgan Emerging Markets Growth & Income plc

Summary Risk Indicator

The risk indicator assumes you keep the product for 5 year(s). The risk of the product may be significantly higher if held for less than the recommended holding period.

Investment Objective:

This Company aims to maximise total returns from Emerging Markets and provides investors with a diversified portfolio of shares in companies which the Manager believe offer the most attractive opportunities for growth. The Company can hold up to 10% cash or utilise gearing of up to 20% of net assets where appropriate.

Risk Profile:

• Exchange rate changes may cause the value of underlying overseas investments to go down as well as up.
• Investments in emerging markets may involve a higher element of risk due to political and economic instability and underdeveloped markets and systems. Shares may also be traded less frequently than those on established markets. This means that there may be difficulty in both buying and selling shares and individual share prices may be subject to short-term price fluctuations.
• Where permitted, a Company may invest in other investment funds that utilise gearing (borrowing) which will exaggerate market movements both up and down.
• External factors may cause an entire asset class to decline in value. Prices and values of all shares or all bonds and income could decline at the same time, or fluctuate in response to the performance of individual companies and general market conditions.
• This Company may utilise gearing (borrowing) which will exaggerate market movements both up and down.
• This Company may also invest in smaller companies which may increase its risk profile.
• The share price may trade at a discount to the Net Asset Value of the Company.
• The Company may invest in China A-Shares through the Shanghai-Hong Kong Stock Connect program which is subject to regulatory change, quota limitations and also operational constraints which may result in increased counterparty risk.

JPMorgan Emerging Markets Dividend Income plc

Summary Risk Indicator

The risk indicator assumes you keep the product for 5 year(s). The risk of the product may be significantly higher if held for less than the recommended holding period.

Investment objective:

The Company aims to provide a dividend income, together with the potential for long-term capital growth from a diversified portfolio of emerging markets investments. It is free to invest in any particular market, sector or country in the global emerging markets universe and there are no fixed limits on portfolio construction. The Company has the ability to use borrowing to gear the portfolio to up to 20% of net assets where appropriate. Gearing may magnify gains or losses experienced by the Company.

Risk profile:

• Exchange rate changes may cause the value of underlying overseas investments to go down as well as up.
• Investments in emerging markets may involve a higher element of risk due to political and economic instability and underdeveloped markets and systems. Shares may also be traded less frequently than those on established markets. This means that there may be difficulty in both buying and selling shares and individual share prices may be subject to short-term price fluctuations.
• This Company may invest in non-investment grade bonds which increases the capital risk and may have an adverse effect on the performance of companies which invest in them.
• External factors may cause an entire asset class to decline in value. Prices and values of all shares or all bonds and income could decline at the same time, or fluctuate in response to the performance of individual companies and general market conditions.
• This Company may utilise gearing (borrowing) which will exaggerate market movements both up and down.
• This Company may also invest in smaller companies which may increase its risk profile.
• The share price may trade at a discount to the Net Asset Value of the Company.
• The Company may invest in China A-Shares through the China-Hong Kong Stock Connect program which is subject to regulatory change, quota limitations and also operational constraints which may result in increased counterparty risk.
• As the portfolio is primarily focused on generating income, it may bear little resemblance to the composition of its benchmark.