Emerging markets offer more high yield investment stocks than UK companies

Global emerging markets offer four times the number of high yielding stocks than that of UK domiciled companies, according to new data from JPMorgan.

Managers of the JP Morgan Global Emerging Markets Income Trust, which offers access to a diversified portfolio of dividend paying companies, believe that the sector, which has historically been viewed purely as a source of growth for investors, is maturing into consistent income generators.

According to Richard Titherington, manager of the JPMorgan Global Emerging Markets Income Trust, this is due to emerging market companies adopting an increasingly disciplined approach to both managing their balance sheets and corporate governance, which has been reflected in falling levels of debt and a willingness to pay dividends.

‘The opportunities we are identifying in global emerging markets from an income perspective are compelling. Over recent years, we have witnessed significant growth in the number of emerging market stocks, growing more than four fold since 2003, therefore facilitating healthy diversification and an ever increasing universe for generating income,’ he said.

‘The figures speak for themselves. Our data reveals there are substantially more high yielding stocks available across a universe of up to 3,500 stocks compared with a universe of over 800 UK domiciled companies of similar liquidity,’ he added.

David Barron, head of Investment Trusts at JP Morgan Asset Management explained that as a result of the equity income opportunities in emerging markets they have seen continued investor demand since the launch of the JPMorgan Global Emerging Markets Income Trust in July 2010.

The action taken by The Board of the investment trust in offering conversion shares (C shares) is aimed to meet this demand from new and existing investors. ‘This is an exciting growth area which the Board and the managers of the Trust have conviction in from a long term perspective,’ he said.

The JPMorgan Global Emerging Markets Income Trust seeks to offer a progressive dividend (the Company recently announced its first interim dividend to shareholders of 1.00 pence per share for the period to 28th January 2011). The investment trust holds between 50 and 80 stocks with a diverse sector and geographical breakdown.

The prospectus for the C Share issue is now available and the offer period will be open for investors throughout the current ISA season and also for early bird 2011/12 ISA applications. The offer for subscription closes on 13 April. If investors wish to invest through JP Morgan Asset Management's online wealth management service. Applications must be in by 08 April.