Fund Spotlight: A dividend-quality tilt with JPMorgan's Emerging Markets Dividend Fund

• We hold a constructive view on emerging markets, supported by attractive relative valuations and a dividend yield premium over developed market indices.
• The fund itself offers a trailing 12-month dividend yield of 3.47% (as of 30 June 2026), nearly double the 1.93% yield of its MSCI Emerging Markets Index benchmark.
• The valuation case remains intact: the MSCI Emerging Markets Index trades on 12.7x forward earnings and a 1.93% dividend yield, versus 18.5x and 1.57% for the MSCI ACWI, and 20.4x and 1.52% for the MSCI World.
• The JPMorgan Funds – Emerging Markets Dividend A (acc) – USD offers a bottom-up, conviction-driven way to access this opportunity, with a dividend-focused mandate that tilts the portfolio toward quality income and away from the most expensive, lowest-yielding growth names.
• The fund has generated competitive long-term returns (5-year annualised return of 7.9% vs 6.4% for the index and 5.1% from peer funds, in SGD terms), while also posting a lower 5-year downside deviation than both the index and peer average.

Emerging market (EM) equities have been one of the standout asset classes in 2026. As of 30 June 2026, the MSCI Emerging Markets Index had returned 24.8% (SGD terms) year to date, outperforming both the MSCI ACWI (+12.2%) and the MSCI World Index (+10.6%) over the same period.

Against this backdrop, we highlight our recommended fund for income-seeking EM investors, the JPMorgan Funds – Emerging Markets Dividend A (acc) – USD, a fund with a dividend-quality mandate across emerging markets.

Figure 1: 1H2026 performance across various equity markets (in SGD terms)

The case for emerging markets: a valuation and yield story

Even after a strong rally, emerging market equities continue to screen cheaply relative to developed markets.

Figure 2: Valuation discount gap exists for emerging markets

As of 30 June 2026, the MSCI Emerging Markets Index trades on a forward P/E of 12.7x, below Global (18.5x), Developed Markets (20.4x) and the US (21.7x). The index also trades modestly below its own 10-year average of around 13.2x, whereas many developed markets continue to trade above their historical averages.

Within the EM universe, valuations remain uneven. Taiwan commands a premium valuation, while South Korea, Hong Kong and China continue to trade at lower multiples. These differences reflect a combination of market-specific fundamentals, investor sentiment, corporate governance considerations and macroeconomic factors, rather than a single common driver.

Within this backdrop, a dividend-focused approach to EM allows investors to participate in the region's growth and valuation re-rating while tilting the portfolio toward companies with more resilient cash flows and shareholder returns – a useful buffer, given the volatility that has historically characterised the asset class (EM's 10-year annualised standard deviation stands at 17.4%, per MSCI, versus 14.7% for ACWI and 14.9% for World).

The fund also distributes considerably more than its benchmark: as of 30 June 2026, the JPMorgan Funds – Emerging Markets Dividend A (mth) – USD share class carries a trailing 12-month dividend yield of 3.47%, nearly double the index's 1.93%.

Related article: Asia and EM Outlook 2H26: AI powers the next leg higher as valuation remains attractive

Portfolio construction: built for income and value

The  JPMorgan Funds – Emerging Markets Dividend A (acc) – USD ’s objective is to provide income by investing primarily in dividend-paying equity securities of companies in emerging markets, while participating in long-term capital growth. It uses a fundamental, bottom-up stock selection process and a conviction-oriented approach to identify the best investment ideas, seeking to balance an attractive dividend with capital growth. The fund (via its mth share class) carries a trailing 12-month dividend yield of 3.47% as at 30 June 2026.

Geographic exposure

China, Taiwan and South Korea make up the three largest country exposures at 23.8%, 23.3% and 22.6% of assets respectively, as at 30 June 2026. China is a notable overweight (+7.9 percentage points (pp) versus the MSCI Emerging Markets Index), reflecting stock-level conviction in dividend-paying names such as NetEase, Lenovo and Tencent, while Taiwan (-4.0pp) and South Korea (-1.1pp) are modest underweights. Brazil is a meaningful overweight at +3.8pp, while India is the largest underweight at -6.5pp. This reflects the portfolio's dividend-quality investment approach, as Indian equities generally trade at higher valuations and offer lower dividend yields. The overweight in Greece (+1.3pp) is entirely attributable to a single position, National Bank of Greece, which at 1.8% of the portfolio accounts for the fund's whole country allocation there.

Figure 3: Geographical breakdown vs. benchmark (as of 30 June 2026)

Sector allocation

Information Technology is the largest sector exposure at 41.8% of the portfolio, but this is a notable underweight relative to the index's 45.3% (-3.5pp), reflecting selectivity around the highest-multiple, lowest-yielding technology names. In its place, the fund is overweight Financials (22.5% vs. 18.4% index, +4.1pp), Communication Services (8.1% vs. 6.0%, +2.1pp) and Consumer Discretionary (8.9% vs. 7.2%, +1.7pp) – sectors that typically include more established dividend payers. The fund carries no exposure to Health Care (versus 2.4% for the index) and is meaningfully underweight Industrials (2.1% vs. 6.7%, -4.6pp).

Figure 4: Sectoral breakdown vs. benchmark (as of 30 June 2026)

Top holdings: quality income anchored in Asian tech and financials

The fund's top ten holdings account for approximately 44.3% of the portfolio (as of 30 June 2026) and are concentrated in Asian technology names, alongside a handful of positions outside the index's largest constituents.

TSMC (9.9%) and Samsung Electronics (9.3%) are the two largest positions; TSMC is a meaningful underweight relative to the index's 15.1% weight, while Samsung Electronics is a modest overweight versus its 8.2% index weight. SK Hynix (6.7%) is a slight underweight versus the index's 7.7%, while Tencent (3.8%) and MediaTek (3.0%) are both overweight relative to their index weights of 2.7% and 1.6% respectively.

The remaining five names – ASE Technology, Lenovo, Realtek Semiconductor, NetEase and National Bank of Greece – sit outside the MSCI Emerging Markets Index's own top ten, but using the iShares MSCI Emerging Markets ETF (NYSE: EEM) as a proxy for index-level weights, each is a modest but clear overweight: ASE Technology (3.1% vs. 0.6%), NetEase (2.2% vs. 0.4%), Lenovo (2.3% vs. 0.2%), National Bank of Greece (1.8% vs. 0.1%) and Realtek Semiconductor (2.2% vs. 0.1%), underscoring the manager's stock-specific conviction well beyond the largest index constituents.

Table 1: Top ten holdings of the fund

Company	Sector	Fund	Index
TSMC	Information Technology	9.9%	15.1%
Samsung Electronics	Information Technology	9.3%	8.2%
SK Hynix	Information Technology	6.7%	7.7%
Tencent	Communication Services	3.8%	2.7%
ASE Technology	Information Technology	3.1%	0.6%*
MediaTek	Information Technology	3.0%	1.6%
Lenovo	Information Technology	2.3%	0.2%*
Realtek Semiconductor	Information Technology	2.2%	0.1%*
NetEase	Communication Services	2.2%	0.4%*
National Bank of Greece	Financials	1.8%	0.1%*
*Not among the MSCI Emerging Markets Index's ten largest constituents; index weight proxied using iShares MSCI Emerging Markets ETF (EEM) holdings. Source: JPMorgan Asset Management factsheet, MSCI Emerging Markets Index factsheet, iShares EEM holdings, all as of 30 June 2026.

Performance: a value and income tilt with a genuine defensive edge

The fund's performance should be read through the lens of its dividend-quality mandate: not to chase the highest-beta names in a rally, but to deliver income and capital growth with a more resilient risk profile. On that basis, the record is mixed in the short term but compelling over longer periods.

In SGD terms, the fund returned 23.1% year-to-date to 30 June 2026, trailing the MSCI Emerging Markets Index (24.8%) and the peer average (26.7%), as the rally has been led by higher-momentum technology and India-related names that the fund is underweight. Over one year, the fund returned 41.9%, versus 46.0% for the index and 49.5% for peers.

Similarly, over the past three years, the fund underperformed both its benchmark (21.3%) and the peer average (20.0%). However, the fund achieved this with lower annualised volatility (15.5% versus 17.9% for the benchmark). As a result, despite the modest performance lag, the fund delivered a comparable risk-adjusted return, with both the fund and the benchmark recording a Sharpe ratio of 0.99.

Looking beyond the past three years, the picture reverses: the fund's 5-year annualised return of 7.9% is ahead of both the index (6.4%) and the peer average (5.1%).

Figure 5: Performance comparison, in SGD terms (as of 30 June 2026)

This is primarily due to the fund’s exceptional year in 2021. The MSCI Emerging Markets Index returned -0.6% and the peer average -1.1%, while the fund delivered +9.4%. Its emphasis on higher-quality, dividend-paying companies, alongside favourable stock selection, likely supported performance during a year when many growth-oriented EM names struggled. The fund also outperformed in 2023, returning +11.7% versus both the index (+8.2%) and peer average (+5.8%).

By contrast, the fund lagged during strong momentum-led rallies of 2024 and 2025, returning 10.0% and 21.6% respectively, versus 11.4% and 25.7% for the index. In 2022, amidst the broad EM sell-off driven by tightening financial conditions, the fund declined 21.0%, marginally more than the index's 20.6% fall but outperforming the peer average's 22.9% decline.

Figure 6: Calendar year performance comparison, in SGD terms

This asymmetry – giving up some upside in momentum-led rallies while holding up better, or performing more in line, during weaker years – is a defining characteristic of a dividend-tilt strategy, and is broadly consistent with the fund's longer-term positioning.

Risk measures

The fund's 3-year risk statistics indicate an annualised volatility of 15.5%, below the MSCI Emerging Markets Index's 17.9%, suggesting investors experienced lower return fluctuations than the broader EM market. Its beta of 0.85 also indicates that the portfolio has been less sensitive to market movements, participating less fully in both market rallies and downturns. Despite taking lower absolute risk, the fund delivered a Sharpe ratio of 0.99, matching the benchmark and indicating that it generated a similar level of return per unit of risk.

Over the 5-year period, annualised volatility increased modestly to 16.8%, with the fund maintaining a beta below one at 0.88, suggesting its defensive characteristics remained intact over a longer market cycle. While the fund's 5-year Sharpe ratio declined to 0.36 amidst a more challenging investment environment, it remained ahead of the benchmark's 0.28, indicating that the fund generated slightly stronger risk-adjusted returns over the longer term.

The fund's downside-risk profile over three and five years also compares favourably with peers. Its 3-year and 5-year downside deviation of 8.9%/9.0% is marginally lower than both the index (9.0%/9.1%) and the peer average (9.4%/9.7%), indicating a slightly smoother ride during periods of market weakness.

Figure 7: Downside deviation (as of 30 June 2026)

Conclusion

For investors seeking exposure to emerging markets through a valuation-disciplined, income-oriented lens, the  JPMorgan Funds – Emerging Markets Dividend A (acc) – USD offers a bottom-up, conviction-driven approach that tilts away from the most expensive, lowest-yielding growth names in the index.

This has translated into similar or stronger risk-adjusted returns over the past three years and five years. The trade-off has been relative underperformance during the sharpest, most momentum-led legs of the recent EM rally – evident in the fund's YTD, 1-year, 3-year and 2025 calendar-year figures – a pattern consistent with its dividend-quality mandate rather than a shift in strategy.

Declaration: This research report was prepared with the assistance of artificial intelligence (AI) tools. iFAST Financial Pte Ltd does not rely exclusively on AI for content generation; the content of this report – including all investment theses, ratings, price targets and conclusions – has been independently reviewed and verified by the research analyst(s) to ensure accuracy and professional integrity.

For specific disclosure, at the time of publication of this report, IFPL (via its connected and associated entities) and the analyst who produced this report hold a NIL position in the abovementioned securities.