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I'm Emily Whiting.
I work as an Investment Specialist on the emerging
markets in Asia-Pacific team at JPMorgan Asset Management,
which is a role I've been fortunate enough
to do since 2006.
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JPMorgan China Growth & Income first
started life back in the mid-1990s
as the JPMorgan China Trust.
At the time, it was the first dedicated China investment
trust for private investors in the UK.
Now, what we've been able to do is
actually adjust the remit of the trust
and add in that word "income."
So back in 2020, we renamed the trust
to the current name, JPMorgan China Growth & Income.
And that didn't actually change what the portfolio managers
were looking to do, which was invest
in long-term, quality-orientated names that can deliver growth
in China.
But one of the benefits of the investment trust structure
allows you to pay out a dividend.
So what we now do with JCGI is pay out
a dividend of 4% of the net asset
value of the trust on an annual basis.
So it contributes both to clients' income stream
as well as the growth of the capital market.
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So what we are looking for is to find high conviction
in names across the broader China investment universe.
Think of that as really two main buckets--
firstly, your Hong Kong listed shares, the H-shares,
which historically were the key way to gain exposure
to Chinese equities.
But also, we're able to gain exposure
through the domestic onshore Chinese A-share market.
Now, this is a hugely dynamic and new area of opportunity
for international investors.
Think of the domestic onshore market
as the portion of the market most directly
tied to the consumption habits and the service habits
of 1.4 billion Chinese, so really broad and deep hunting
ground for us, and it's a part of the world that has really
enhanced the diversification that we can offer across JCGI.
So when we put it all together, we
end up with a very diversified, bottom-up-driven,
stock-selection-orientated trust that's
very much about focusing on the companies that we like,
finding those winners, but, as importantly,
avoiding the losers or the companies
that we're not so comfortable with.
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Why do people need exposure to the Chinese economy?
Well, it's the second largest economy globally.
If you combine that with the sheer size of the population,
from a global perspective, it really is too big to ignore.
Now, there are often concerns about China,
as there are with so many emerging markets.
Volatility is inherent and is of a higher level
than we would recognize in a developed
market, such as the UK.
Geopolitics casts a cloud and creates headlines.
China was one of the markets globally that hung on to zero
COVID the longest, almost famously.
And when it reopened, the expectation across the world
would there be a very sharp bounce in the market.
And it's fair to say, so far in 2023,
that's been underwhelming.
However, there is still a lot of pent-up demand.
There are a lot of excess savings made by the Chinese
through their periods of lockdown.
We know that the government have the ability
to stimulate and get involved to keep the economy going.
And to us, it doesn't change that long-term story
of GDP per capita, so the amount that the individual earns,
growing and people demanding more choice, ease,
and convenience.
But as investors, as long as you have a long-term horizon,
you can look through a lot of that.
These are still companies, industries,
sectors offering compelling returns,
offering products that are required and needed
and consumed across the world.
And so to us, China isn't a market
that you want to be short term in or tactical.
But for long-term investors, as part
of a diversified portfolio, I would use that phrase again,
too big to ignore.
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So why consider JCGI?
In one sentence, China remains too big to ignore.
It's a market that nearly 20% of the world's population
live, work, and consume in.
It's a market that, for international investors,
is quite hard to get your head around because of the language,
because of the culture.
And that's where you want an experienced, dedicated
portfolio manager--
individuals who speak the language,
individuals who are based on the ground,
individuals who are backed by a team that gives them
the ability to differentiate between the winners
and the losers, which is so important
for long-term returns.
China, by nature of being an emerging market,
is inherently volatile, and it also has geopolitics.
But that, to me, isn't a reason for investors
not to be thinking about JCGI in China
if you have a long-term investment horizon
and if you have the patience to really live
through certain periods of volatility that are natural.
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