Should you buy shares in Utilico Emerging Markets trust?27 May 2026 10:34
From a recent Times article on UEM...
Should you buy shares in Utilico Emerging Markets trust?
Utilico Emerging Markets Trust (UEM) shares steamed from 200p to 300p between November 2024 and this February, but have been wobbling since then. Should investors be worried?
The firm has been touted as the ideal vehicle for those who fancy a dabble in notoriously volatile emerging markets, but want to sleep at night. These markets arise in countries experiencing rapid economic growth as they move from “developing” to “developed”. But those transitions have often been punctuated by setbacks violent enough to shake investors.
UEM tries to soothe such worries by concentrating on essential services: water, waste management, electricity grids and toll roads, often government-regulated, with inflation-linked revenue streams. The formula has generally worked; dividends have grown every year for the past decade, thanks to 80 per cent of the portfolio’s holdings paying dividends to the fund.
The South African-born Jillings believes that drastic devaluations are a thing of the past in Brazil, shielded by high interest rates, so UEM can hook into South America’s urbanisation, energy transition, social infrastructure and expanding middle classes.
But the region is not the only part of the world benefiting from those trends; they apply equally strongly to southeast Asia and other parts of the developing world. So Jillings and his team scour the developing world, applying a bottom-up policy to eyeball the best prospects, although they avoid the volatile Africa and Russia.
“We reduce every opportunity to a common framework so we can compare EV/ebitda [the enterprise multiple] globally,” he says. “If something comes up that looks compelling, we make room for it. If not, we don’t.”
Read the full article here - https://www.thetimes.com/business/companies-markets/article/tempus-utilico-emerging-markets-trust-xr9v9x3t8
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