High and consistent yield makes it a standout offering: JPMorgan India Growth & Income (JIGI)

JPMorgan India Growth & Income (JIGI) is the only trust focussed on Indian equities offering a competitive yield, as a result of its enhanced Dividend strategy, which pays out 4% of the year-end NAV as equal quarterly payments over the next year. This approach does not affect managers Amit Mehta and Sandip Patodia’s approach of identifying high-quality companies from across the Indian market, which they back with conviction in a relatively concentrated Portfolio of 50 to 60 holdings. Their flexible approach has meant that whilst the trust has one of the highest percentages of large caps in the peer group, there is still a notable amount in small and mid caps.

In the past year, the managers have added to stocks that align with some of the structural drivers of the Indian economy, including an increase in consumer spending and ongoing financial inclusion as the country and the population become wealthier. This has resulted in an overweight to the financial sector, although stocks will always be selected on a bottom-up basis, with the managers looking for high-quality firms with growth potential that are trading at a reasonable valuation.

The new dividend strategy was introduced in 2025 alongside a number of strategic initiatives, including a name change to JPMorgan India Growth & Income to reflect the new policy, a reduction in the Charges, an increase in share buybacks and a triannual tender offer, with the next one coming in 2028. This resulted in the Discount narrowing notably to its current level of c. 7%, considerably narrower than the trust’s own five-year average of 16%.

JIGI’s bold approach of paying an enhanced Dividend means the trust is now a standout option in the India sector, in our view, as it has broadened its appeal to a much wider pool of investors. We believe there are a number of factors supporting this appeal.

For one, JIGI’s high income stands out in a high-growth but low-yielding Indian market, meaning the trust currently yields about 4x that of the index. In addition, the drivers of India’s growth are very domestically focussed, meaning an allocation to the trust is likely to offer considerable diversification benefits as part of a wider portfolio, especially an income-orientated one which is highly unlikely to have any India exposure. Furthermore, the portfolio’s growth style bias means it offers further diversification against other equity income vehicles, which are typically tilted to the value style. Finally, this growth focus means the trust should continue to appeal to investors still in their capital appreciation phase, as the approach for constructing the underlying Portfolio has not changed, offering existing shareholders continuity.

Whilst this approach, along with other initiatives, has contributed to an improved rating, the trust continues to trade at a Discount, albeit one that we think is considerably de-risked, as a result of the commitments to considerable buybacks and triennial tender offers. In the context of the wider market issues, we believe this adds considerably to JIGI’s appeal at this juncture. After years of strong performance, the Indian market has endured a pullback over the past c. 18 months. However, we believe this hasn’t changed the long-term growth potential of the market; therefore could prove an attractive entry point to a high-quality market with considerable long-term upside, at a more attractive valuation level.