Publication of monthly factsheet

13 May 2025

UTILICO EMERGING MARKETS TRUST PLC

(LEI Number: 2138005TJMCWR2394O39)

Publication of monthly factsheet

The latest monthly factsheet for Utilico Emerging Markets Trust plc ("UEM" or the "Company") will shortly be available through the Company's website at:

https://www.uemtrust.co.uk/investor-relations/factsheet-archive

Monthly commentary

PERFORMANCE

UEM's NAV total return was up in April by 1.4% significantly outperforming the MSCI Emerging Markets total return Index which declined by 2.0% in Sterling terms during the month.

April was a volatile month for markets. Initially markets sold off sharply as US President Trump announced on "Liberation Day" a raft of what he described as "discounted reciprocal tariffs" to be imposed on most goods imported into the USA. China's tariff was initially 34%, Thailand's 36%, South Korea's 25% (joining Mexico and Canada at that rate) and Vietnam was allocated a rate of 46%. The rate for most countries was set at 10%. After China responded with increased tariffs on US imports, China's rate was raised, eventually reaching 145% with China imposing a 125% tariff on US goods. After a week of volatile markets which saw the US Dollar weaken and US treasury yields rise, President Trump postponed the introduction of tariffs on most markets (except China) by three months and by the end of the month, many markets were higher than they had been at the end of March.

The flipflopping of tariff rates has resulted in considerable uncertainty over where US trade policies will end up, whether the US and China will engage on trade talks, what the US consumer will do when stocks of Chinese made goods dry up or substantially increase in price and where China (and multinationals) will source and sell goods currently traded with the US. Uncertainty over tariffs that may (or may not) be imposed from July will inevitably weigh on economies globally and we expect corporates to defer investment decisions. The fall in commodity prices, with Brent Crude oil down by 15.5% and copper down by 9.4% in April, indicates that the market is expecting a global slowdown in economic activity. If energy prices remain low, inflationary pressures from the tariff should be dampened and in many markets interest rate reductions should continue. Notwithstanding the economic uncertainty, this should be positive for equity valuations.

Against this uncertain backdrop, investors during the month tried to separate potential winners and losers with markets seen as less exposed as relative beneficiaries. Brazil's Bovespa Index was up by 3.7%, the Mexico Bolsa IPC gained 7.2% and Chile's IPSA Index was up by 5.1%. In Asia, the India SENSEX rose by 3.7%, the Philippines PSEi gained 2.8% and Indonesia's JCI was up by 3.9%. Declining markets in Asia included Vietnam's Ho Chi Minh Index which declined by 6.2%, Hong Kong's Hang Seng Index down by 4.3% and China's Shanghai Composite declined by 1.7%. The Merval Index in Argentina declined by 10.2% and Turkey's BIST Index fell by 6.0% in April.

The US Dollar weakened especially against European currencies including Sterling. Sterling gained 3.5% against the US Dollar although it was 1.7% weaker against the Euro and 1.0% weaker against the Mexican Peso. Whilst gaining against the US Dollar, the Brazilian Real was down 2.2% against Sterling. Currencies which were weaker than the US Dollar in April included the Vietnamese Dong, Turkish Lira and Indian Rupee which fell by 5.1%, 4.6% and 2.2% respectively against Sterling and Argentina's Peso which devalued by 11.2% against Sterling.

PORTFOLIO

There were three changes to the top thirty holdings in April with NHPC, CTP and Helios Towers replacing Nilesat, Vietnam Holding and Shanghai International Airport.

NHPC, an Indian state-owned hydropower and renewables company, with 7,233MW of operational capacity, is a new entrant to the top thirty as is Helios Towers, which owns and operates over 14,000 telecoms tower sites in Africa and the Middle East and is currently demonstrating strong operational leverage. CTP, which has previously been a top thirty constituent, is an industrial property developer with a focus on logistics parks in Central and Eastern Europe. It has 13.4m sqm of operating assets with 1.9m sqm under construction. 

There were relatively large price movements in many of the portfolio holdings in the month. Most were positive in local currency terms and largely driven by investors rotating into sectors and countries seen as more defensive in the current environment. Brazilian stocks were particularly strong with Serena Energia up by 26.3%, Rumo up by 19.6%, Orizon up by 15.8%, SABESP up by 11.3% and Electrobras up by 8.6%. ISA in Colombia advanced by 11.1%. Many European stocks were strong with Piraeus Port up by 12.2% and Inpost up by 10.0%. In Asia, stocks were mixed but Manila Water advanced by 8.1%, Anhui Expressway was up by 6.6% and KINX was up by 7.2%.

Technology related stocks in the top thirty fell, with FPT down by 9.6%, SUNeVision down by 5.8% and Telelink Business Services down by 8.5%. Vietnam Opportunity Fund declined by 6.8% reflecting weakness in the Vietnamese market. Ocean Wilsons declined by 5.7% and TAV declined by 5.6%.

Portfolio purchases amounted to £11.9m and total realisations were £11.8m.

DEBT

UEM's debt position increased marginally to £17.8m during April, due to the stronger Euro. The facility remained drawn as EUR 15.0m and GBP 5.0m.

OTHER

UEM's share price increased by 0.9% in April, ending the month at 218.00p. The discount to NAV increased from 16.0% to 16.4%.

UEM bought back 229,000 shares at an average price of 212.38p in the month.

Name of contact and telephone number for enquiries:

ICM Investment Management Limited +44(0)1372 271486

Charles Jillings, Jacqueline Broers, Alastair Moreton

Montfort Communications

Gay Collins, Nita Shah +44(0)20 3770 7913

[email protected]