Asia Equity Dividend Fund | J.P. Morgan Asset Management

FOCUS ON ASIA FOR DIVIDEND OPPORTUNITIES

Which is why JPMorgan Asia Equity Dividend Fund invests in carefully selected Asian stocks and real estate investment trusts (REITs) that we expect will pay relatively high dividend yields, capturing income opportunities and long-term capital appreciation potential in the Asia Pacific region excluding Japan.

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WHY ASIAN DIVIDENDS?

1. Asia – improved economic environment with opportunities from developed and emerging markets

A combination of improved global growth and mild global inflation provides a supportive backdrop for risk assets in general. Meanwhile, the diversity of Asian economies presents varying dividend opportunities from both developed and emerging worlds.

Home to key REIT markets, the developed Asia is characterised by a strong dividend culture. Meanwhile, investors in the emerging Asia are set to benefit from dividend reforms with Korea and China pushing for enhancement in shareholder returns.

chart-asia-equity-dividend-fund-chart1 — Source: IMF, J.P. Morgan Asset Management. *Forecasts are from the IMF's April 2017 World Economic Outlook. Guide to the Markets – Asia 3Q 2017. Data reflect most recently available as of 30.06.2017.

2. Asia as the go-to place for equity dividends

The Asia Pacific ex-Japan region comfortably outpaces Japan, the US and Europe in terms of number of companies distributing yields ranging from 1% to 7%, making it the most fertile ground for high dividend opportunities among all regions.

chart-asia-equity-dividend-fund-chart2 — Source: MSCI, Morgan Stanley Research, J.P. Morgan Asset Management, as of 30.06.2017. Positive yield does not imply positive return. Yield is not guaranteed.

3. Asian valuations remain reasonable

Relative to the developed markets, emerging market equities continue to enjoy a valuation advantage after years of underperformance. Currently, Asia ex-Japan valuations still look reasonable with the price-to-book ratio below the long-run average.

chart-asia-equity-dividend-fund-chart3 — Source: FactSet, MSCI, J.P. Morgan Asset Management. Guide to the Markets – Asia 3Q 2017. Data reflect most recently available as of 30.06.2017.

4. Weaker US Dollar supports Asian equities

Historically, Asian equities tend to outperform developed markets when the US Dollar depreciates. With a retracement in the US Dollar, the backdrop for Asian equities has become more favourable.

chart-asia-equity-dividend-fund-chart4 — Source: FactSet, MSCI, J.P. Morgan Asset Management. Past performance is not indicative of future performance. *All data represent price return in local currency terms with data since January 1997. MSCI AC APxJ is the MSCI All Country Asia Pacific ex-Japan index. DM is represented by the MSCI World index. REER stands for real effective exchange rate. Guide to the Markets – Asia 3Q 2017. Data reflect most recently available as of 30.06.2017.

WHY INVEST IN JPMORGAN ASIA EQUITY DIVIDEND FUND?

Income opportunities in a rising rate environment

While the US Federal Reserve has started to raise rates gradually, Asia continues to provide ample income opportunities as there are more cyclicals and financials than defensives in the region's high dividend universe.

"Value" and "low-beta" strategies to offer income and upside potential

Typically, attractively valued stocks offer higher capital appreciation potential while low-beta stocks provide a measure of cushion against market fluctuations. This combination allows for opportunities to capture upside and brace for downside.

Tap into opportunities from both developed and emerging Asia

Free from country or sector constraint, the fund managers seek to tap into the varying opportunities available from developed and emerging Asian markets.

Focus on risk-adjusted returns

With a focus on dividend yield strategy, the fund managers seek to offer competitive risk-adjusted returns. They may also use hedging techniques to reduce the impact of currency volatility.