JPM Emerging Markets Income Fund C - Net Accumulation

JPM Emerging Markets Income has strong features, including capable leadership, deep analytical resources, and a structured and well-codified approach. As such, the People and Process Pillar ratings have been retained at Above Average and High, respectively.

This strategy has been managed by Omar Negyal since May 2015, although he has been involved since 2012, working at that point alongside the now-retired Richard Titherington. Negyal has more than 20 years of emerging-markets experience, with previous analyst and portfolio management roles at HSBC, Lansdowne Partners, and F&C.

Isaac Thong, who had served as deputy manager on the strategy since June 2020, departed in March 2025. Thong’s departure is not critical, as Negyal has been the primary lead on the strategy. Following a comprehensive hiring process, Shuyu Gao joined Negyal in December 2025 as the new backup manager. She previously worked at Schroders from 2018 to 2025, where she specialized in China, Taiwan, and Korea.

Moreover, Negyal continues to be supported by Julie Ho and Ruben Lienhard, both members of the emerging-markets income team under his leadership. Further support is provided by the broader emerging-markets and Asia-Pacific team, comprising more than 100 analysts and portfolio managers.

This bottom-up, income-oriented strategy targets an overall dividend yield of 130% of that offered by the MSCI Emerging Markets Index. While most regional strategies run by the EMAP team have a distinct quality and growth tilt, emphasizing “premium” and quality” names via JPMorgan’s strategic classification system, this income strategy has more of a quality value style bias.

For any holding, Negyal must gain comfort with a firm’s returns on equity, free cash flow, and dividend policy before investing, as this ensures the dividend is sustainable and likely to grow over the long term. Indeed, the strategy does consistently have higher returns on equity than the index.

Given the focus on value and quality here, the strategy is expected to perform well in a broad market driven by fundamentals, as well as in down or moderately rising markets; conversely, it is expected to lag in high-growth markets given lower beta.

For example, the quality tilt helped the strategy to mitigate some relative downside in 2020, while the value/income bias and a disciplined focus on fundamentals contributed positively in 2021-23. This pattern was evident in 2025, when the strategy slightly underperformed as high-growth, artificial intelligence-driven markets—particularly in China (for example, Alibaba and Tencent)—outperformed, while its value and income bias and underweighting in such names held back returns.

Overall, the balanced approach with a focus on quality and income should help the strategy outperform over the cycle. The strategy’s long-term track record is strong over Negyal’s tenure.

The approach is well-codified and consistent, and the manager has implemented it to good effect. We maintain the Process rating at High.

This income-oriented strategy targets an overall dividend yield that is 130% of that offered by the MSCI Emerging Markets Index. To execute the approach, management leverages the team’s country specialists and sector/product analysts. Country specialists, who run the team’s suite of single-country mandates, conduct due diligence and rank stocks based on conviction levels. Meanwhile, sector/product analysts conduct fundamental research following JPMorgan’s strategic classification framework, which is based on a 98-point questionnaire, to assess the strength and stability of the business, competitive advantage, management quality, and cash flow generation. Analysts ultimately assign five-year expected total return targets through four sources: earnings growth, dividends, valuation multiples, and currency. For this income-oriented strategy, management invests in names where a significant portion of the expected total return is driven by the dividend element. Approximately 60% of the 50- to 80-stock portfolio will be held in names with a 3% to 6% yield, while there is also flexibility to hold names with yields outside of the range, with a target of 20% allocated to each. This flexibility of investing in stocks with different yield characteristics provides a better chance of achieving income and capital growth.

While the core quality-growth process remains unchanged, several enhancements have been implemented in 2025. These include the rollout of an industry framework to better challenge analysts’ forecasts and incorporate a more consistent macro perspective; the introduction of predetermined game plans to support investment-thesis monitoring and inform position sizing; and the creation of analysts’ hypothetical accounts, which highlight their highest-conviction ideas.

The portfolio is strategically constructed using a bottom-up approach, focusing on selecting stocks with robust fundamental qualities, strong balance sheets, and the capacity to sustain long-term dividend payments.

Naturally, certain segments present more favorable investment opportunities, leading to portfolio tilts toward specific sectors and markets. From a sectoral perspective, the most attractive income opportunities are typically found in technology, consumer staples, and financials, which are all overweight in the portfolio. Conversely, sectors such as materials, industrials, and healthcare are underweight.

The portfolio is overweight in Indonesia, Korea, and Mexico due to strong income opportunities from individual stocks. It is underweight in India, where long-term growth is positive and investor interest is high, but high valuations make it harder to find attractive income-paying investments.

This strategy is led by an experienced investor Omar Negyal, who is backed by wide resources at JPMorgan, earning it a People rating of Above Average.

This strategy has been managed by Negyal since May 2015, although he has been involved since 2012, working at that point alongside the now-retired Richard Titherington. Negyal has more than 20 years of emerging-markets experience, with previous analyst and portfolio management roles at HSBC, Lansdowne Partners, and F&C.

Isaac Thong, who had served as deputy manager on the strategy since June 2020, departed in March 2025. Thong’s departure is not critical, as Negyal has been the primary lead on the strategy. Following a comprehensive hiring process, Shuyu Gao joined Negyal in December 2025 as the new backup manager. She previously worked at Schroders from 2018 to 2025, where she specialized in China, Taiwan, and Korea. Moreover, Negyal continues to be supported by Julie Ho and Ruben Lienhard, both members of the emerging-markets income team under his leadership.

There is further support from the wider EMAP equities team, which comprises more than 100 investment members. As part of a broader review of the China research platform aimed at improving stock selection, David Gleeson was appointed the head of China research in 2024. This prompted a restructuring of the analyst team over the past 18 months, including several departures and the hiring of six senior analysts to strengthen research capabilities.

J.P. Morgan continues to build a track record of strong stewardship, supporting a Parent rating upgrade to High from Above Average.

With more than USD 4 trillion in assets under management (including USD 1.3 trillion in money market funds) and a broad reach, J.P. Morgan is among the largest active asset managers in the US, Europe, and Asia. Although some multi-asset offerings have struggled over the past five years, prompting new leadership to make changes to investment teams, its equity and fixed-income teams boast long-tenured portfolio managers who practice repeatable investment processes that have generally produced strong long-term results. Most of its funds are core building blocks with long lifetimes, though its lineup around the world also includes more-specialized options: Two options-based equity-income exchange-traded funds, launched in 2020 and 2022, are now among the firm’s largest. J.P. Morgan has been an early mover in offering active ETFs, having converted 12 of its open-end mutual funds to the structure and launching others. It isn’t always at the forefront of emerging trends. While it has filed registration statements with the Securities and Exchange Commission for an interval fund and an ETF investing in private markets, it hasn’t yet introduced such an option for all investors, whether on its own or in partnership with another asset manager, unlike some of its closest competitors.

To support the firm’s diverse investment offerings, J.P. Morgan has invested heavily in both portfolio management tools and its client organization. Over the past 10 years, the firm has developed robust proprietary technology with advanced analytics and broad buy-in from investment analysts, portfolio traders, and portfolio managers, all of whom have easy access to the platform. The firm also stands apart for its demonstrated commitment to clients. In the early 2000s, J.P. Morgan began pivoting its engagement with financial advisors to adopt a more consultative approach, supported by its sought-after Guide to the Markets research series that focuses on investor education, not product pitches. This perspective can help clients stay the course, supporting positive investor outcomes.

Incentives reinforce alignment with fundholders. Beginning more than 10 years ago, investment team compensation is tied to three-, five-, and 10-year performance, and portfolio managers must invest at least half of their deferred compensation in J.P. Morgan strategies. Many firms encourage portfolio managers to invest alongside fundholders, but J.P. Morgan goes a step further in requiring client-facing individuals to invest substantial portions of their incentive compensation in the funds.

Although some funds still face high cost hurdles, more than half of share classes charge competitive fees relative to peers.

The strategy's performance has been strong over the manager's tenure. Since Omar Negyal was appointed lead manager on May 1, 2015, through Feb. 28, 2026, the strategy (via the C Net Acc share class) delivered 9.7% annualized returns, compared with the 8.2% and 2.7% respective returns for the Morningstar Emerging Markets Target Market Exposure index and the global emerging-markets equity Morningstar Category average.

In 2024, the fund was slightly behind the Morningstar Emerging Markets Target Market Exposure Index, but ahead of peers. Stock selection was weak in financials, especially the fund’s holdings in Bank Rakyat Indonesia, B3, and Banco Do Brasil. Not holding some of the e-commerce names that don't pay a dividend, such as Meituan and Xiaomi, also hurt. On the positive side, stock selection in Taiwan, South Korea, and India was strong.

In 2025, JPM Emerging Markets Income underperformed the index and peers. Performance was held back by the fund’s bias toward higher-yield, dividend-paying stocks, which lagged a market increasingly driven by fast-growing internet and AI companies—particularly in China. Investor sentiment shifted sharply toward tech following “DeepSeek”-style AI momentum, boosting names like Alibaba and Tencent, where the fund remained underweight due to their relatively low dividend profiles. At the same time, weaker performance from Indian IT services firms such as Infosys and Tata Consultancy Services further weighed on returns.

JPM Emerging Markets Income C Net Acc's Representative Cost Ex Transaction Fee is 0.89% per year. It places it in the second-cheapest quintile of the Morningstar EAA Fund Global Emerging Markets Equity Category, where the median fee is 1% per year. This cost positioning translates into a Medalist Rating Price Score of 0.56, which reflects its relative price positioning within the category. The Price Score ranges from -2.50 (most expensive) to +2.50 (cheapest), with higher scores indicating better cost competitiveness.