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C share global EM income from JPMorgan

The JP Morgan global emerging markets income trust has issued further shares through a C Share offer in response to demand from investors who found it difficult to invest through the secondary market.

The trust, which was launched last year, invests in dividend-paying companies across global emerging markets. It invests mainly in emerging market equities, but can have some exposure to other assets such as fixed-interest securities and cash.

The trust comprises 50 to 70 holdings and has the freedom to invest in any market, sector or region within global emerging markets. It can also invest in companies based elsewhere that have substantial exposure to emerging markets.

Despite the absence of specific weightings, there are some rules to ensure investment risk is spread within a diverse portfolio. No more than 15 per cent of the portfolio can be invested in any one company or group, while the limit for investment in unlisted securities and other listed closed-ended funds is 10 per cent. It can be geared by up to 20 per cent of its net asset value on a tactical basis to enhance returns.

JP Morgan says the trust provides new income opportunities with diversification away from the UK. It says emerging markets can be volatile but expects them to provide long-term growth and to provide a rising level of income as companies become more inclined to distribute profits to shareholders.

The conversion of C shares to ordinary shares will increase the number of ordinary shares potentially available to investors on the secondary market. Investors looking to sell shares and those looking to buy on the secondary market will benefit from improved liquidity, while existing investors will benefit from fixed costs being spread over a greater number of shares.

Emerging markets continue to perform well and look a good prospect for the long term. However, rapid growth has led to concerns about rising inflation in some regions and it is too early to see whether trying to control inflation will have a positive impact on markets or impact negatively on growth.


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