JPMorgan Emerging Europe, Middle East & Africa Securities (LSE:JEMA) posted a net asset value total return of 3.2% for the six months ended 30 April, outpacing the S&P Emerging Europe, Middle East & Africa BMI Net Return index, which rose 2.5% over the same period.
The investment trust, which invests across equity markets in emerging Europe, the Middle East and Africa, attributed the margin of outperformance to asset allocation and stock selection, with an underweight to Gulf Cooperation Council markets proving particularly beneficial after Iranian attacks on UAE, Saudi and Qatari ports and energy infrastructure drove volatility across the region from late February.
Portfolio managers Oleg Biryulyov and Luis Carrillo reduced GCC exposure and closed positions in names directly hit by the conflict, including Saudi Ground Services and ADNOC Logistics, while adding oil refiners and precious metals producers to capture the commodity price surge.
Hungarian equities were a standout, after opposition leader Peter Magyar defeated Viktor Orban in April parliamentary elections, improving the country's prospects for receiving frozen EU structural funds; the managers opened a position in OTP bank to capture the resulting rally.
Over three years since the trust repositioned following Russian sanctions, the portfolio has delivered a cumulative annualised NAV return of 13.6%, against 11.0% for the reference index over the same period.
Russian court proceedings remain a material overhang: a Russian court has upheld VTB Bank's $439.5 million claim against JPMorgan entities including the company, though enforcement has not yet been undertaken and the appeal remains suspended.
