Jonathan Groocock, Deputy Portfolio Manager at Utilico Emerging Markets Investment Trust (UEM), provides and update for the Utilico Emerging Markets shareholders. UAMS net asset value total return increased by 2.3% in September, and this was again ahead of the MSCI Emerging Markets index, which in sterling terms was up 1%.
Hello, and welcome to the September monthly update for you Utilico Emerging Markets. I'm Jonathan Groocock, deputy Portfolio Manager.
UEM's net asset value total return increased by 2.3% in September, and this was again ahead of the MSCI Emerging Markets index, which in sterling terms was up 1%. This takes UEM's six month return to 6% significantly outperforming the MSCI em index, which was actually down over that period.
And what's been driving markets in September? Well, in the US, the Fed has indicated that interest rates will be higher for longer and this has seen the US Dollar strengthened, which is typically negative for em. And indeed, Chinese markets fell. The Hang Seng was down 3.1% And the Shanghai Composite nought point 3%. Although we do note that there are glimmers of hope on the economic front as factory activity expanding for the first time in six months, we also saw weakness in the Vietnamese market, with the Ho Chi Minh index falling 5.7% and the Mexican bolsa down 4%.
Bucking the trend, the Romanian BET market was up 8.2% following a major IPO, of greater consequences to UEM is the Brazilian market, which managed to deliver modest positive return following a second consecutive interest rate cut. Most EM currencies appreciate against Sterling in September, which is more a reflection of concerns of economic slowdown in the UK.
Within UEM's portfolio, it was notably strong share price performances. ICON Energy up 17.6% TTS up 11.2% and KINX up 10.7%. VAMOS shares were particularly weak, down 16.5%. UEM's quarterly dividends of 2.15p was paid to shareholders in the month and 1.2 million shares were bought back and this takes a total buyback effective since March to 4.4 million shares or 2.1% of the opening share capital. For more details. Please do read UAM September facts sheet