Austin Forey, who has managed JPMorgan Emerging Markets (JMG) since 1994, takes an ultra-long-term approach to stock-picking, aiming to identify long-term structural winners and then be patient, ignoring macroeconomic noise and letting the extra growth potential in quality stocks come through.
He draws on the research of one of the largest emerging-markets research teams, who conduct standardised research across the emerging-markets stock markets, allowing cross-border comparisons and aiding the uncovering of the leading stocks in the hugely diverse region. Their process has led them to favour technology- and e-commerce-related names in recent years, as well as financials, and to avoid more asset-intensive and indebted sectors.
The result has been outstanding long-term returns, JMG having been the top performer in the AIC Global Emerging Markets sector over five- and ten-year periods. As we discuss in the Performance section, performance has been good in both rallying and troubled markets. In recent years some of the top-performing stock picks have been companies the trust has owned for one or two decades, illustrating the benefits of taking a long-term approach and avoiding the temptation to sell and book gains.
Austin has seen numerous crises in his career and has responded calmly to this latest one, making no changes to the portfolio except to examine the case for certain high-quality stocks which are now cheaper and might be good additions to the portfolio.
JMG trades on a slight premium to the sector, with the discount currently 9.7%, compared to a sector average of 12%, although discounts have been extremely volatile in the choppy markets following the emergence of the pandemic.