JPMorgan Emerging Markets steps up buybacks to tackle persistent discount

JPMorgan Emerging Markets Investment Trust (JMG) has released a discount management update, in which its board expresses frustration that the trust’s shares continue to trade at a significant discount to net asset value (NAV) despite a consistent share buyback programme.

In response to the stubborn discount, the Board has substantially increased the scale of buybacks, authorising the repurchase of 28.2m shares in the quarter to 31 March 2025—an annualised rate of 10.5% of the shares in issue at the start of the quarter. This follows 27.1m shares repurchased in the second quarter (9.9% annualised) and 11.1m in the first (4.0%). The average daily discount to NAV has hovered between 11.1% and 13.5% over the period, with the most recent quarter averaging 12.7%.

JMG continues to use share buybacks as a central pillar of its discount control strategy, aiming to manage both the level and volatility of the discount. In addition to buybacks, the Board reminds shareholders that several structural tools are in place to support the share price:

• A three-yearly continuation vote (next due in 2026)
• A conditional five-year tender offer based on performance to 30 June 2029
• Ongoing investment in marketing to build long-term demand

The Board reiterated its commitment to narrowing the discount and confirmed it would provide further updates in the 2025 Annual Report & Accounts, expected in late September.

[QD comment MR: It’s encouraging to see JPMorgan Emerging Markets’ board taking a proactive and increasingly aggressive approach to managing its persistent discount. The trust’s sizeable buyback activity – over 66m shares repurchased in just three quarters – reflects the Board’s commitment to addressing the issue. The trust’s scale gives it a significant advantage here as this shouldn’t impact its ongoing charges ratio unduly and its size should mean that it remains relevant for many professional investors.

A smaller peer might struggle to match this level of intervention and remain viable. It will be interesting to see what additional measures the board proposes. The 2026 continuation vote is not that far away and this may be helping to focus the board’s attention right now. The 2029 tender will likely be beneficial in due course but that is still too far away to have a significant impact now, so plans to step up marketing make a lot of sense.]