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Jupiter Emerging and Frontier Income trust board proposes reforms to redemption facility to 'limit' future outflows


Following a shareholder consultation regarding JEFI’s redemption facility, the board is proposing that it be amended “so that it is offered every three years, next to occur in June 2024; and that the maximum number of redemption requests that may be accepted at each redemption event will in aggregate be 20% of the company’s outstanding ordinary share capital”.

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John Scott, chairman of JEFI, said: “When the Covid-19 pandemic struck in 2020, the markets into which JEFI invests were particularly badly affected, being quick to fall and slower than the developed markets to recover. 

“Having traded at, or close to, a premium for most of the time since our IPO in 2017, JEFI’s shares have subsequently traded at a significant discount, presenting the opportunity for investors to buy in at a discount, in the knowledge that they can redeem at close to the prevailing net asset value per share every June.”

Scott added: “The experience of 2021, when some 30% of JEFI’s shares were redeemed, served to demonstrate that the redemption facility as currently offered is incompatible with the long-term viability of the company.”

Alongside the proposed changes to redemptions, the board said it plans to implement a continuation vote every three years.

Shareholders will be asked to approve the changes at the next general meeting, at which the board said it will also put a resolution to shareholders in connection with the continuation of JEFI.

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Scott said: “Taking into account the views of shareholders, the board believes that the interests of the company and of shareholders as a whole will be better served by amending the redemption facility in a manner which will limit the scale of future outflows, while at the same time offering shareholders a range of protections, including a triennial redemption programme and continuation vote.

“We retain our confidence in Ross Teverson and his team and take great encouragement from the recovery both in JEFI’s net asset value and in the earnings from our investments.”

Teverson, fund manager of JEFI, added: “The company’s portfolio holdings have proven their resilience through what has been an unprecedented and challenging period for many emerging and frontier market businesses. 

“Income generation has already recovered to above pre-Covid levels and we believe that a combination of attractive portfolio valuations and continued earnings growth should be conducive to a positive outlook for total returns in 2022.”

In a research note published on 21 December 2021, QuotedData said that Teverson’s “long-held view that better value is available outside of China has worked in the trust’s favour, while its allocation to frontier markets offers an opportunity otherwise not available in the majority of its peers’ portfolios”.

According to QuotedData, JEFI is the top-yielding trust within the AIC’s Global Emerging Markets sector.



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