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Utilico Emerging Markets lags index

Utilico Emerging Markets Limited’s net asset value total return per ordinary share was positive at 13.3% in the six months to 30 September 2016, below the MSCI Emerging Markets Total Return Index’s positive 19.8%. Earnings per share of 5.10p comfortably cover the dividends of 3.25p in respect of this period. The cumulative retained revenue reserves increased to GBP14.6m (31 March 2016 GBP10.5m), equivalent to 6.8p per share. In view of this the Directors propose to increase the quarterly dividends to 1.70p in the second half of the year. For the year to 31 March 2017 this will result in a dividend of 6.65p, an increase of 3.9%.

UEM says that the constituents of the top twenty investments saw two changes with the Brazilian rail-based logistics operator Rumo Logistica Operadora Multimodal S.A. (“Rumo”) and Mexican airport concessionaire Grupo Aeroportuario del Centro Norte, S.A.B. de C.V. (“OMA”) replacing Gasco S.A. (“Gasco”) and The Egyptian Satellite Company (“Nilesat”). UEM has exited Gasco in its entirety following a demerger of its two main business lines and the subsequent tender offer for both operations by their respective parent companies. Nilesat has dropped out of the top twenty due to relative underperformance.

The top twenty total, as a percentage of the portfolio, decreased slightly from 67.2% to 65.0% in the six months to 30 September 2016. Unlisted investments accounted for 3.0% of the total portfolio as at 30 September 2016, broadly unchanged over the period. The number of investments reduced from 86 to 84.

China (including Hong Kong) remains UEM’s largest country investment, although its weighting has reduced in the past six months from 26.3% to 24.6% of the portfolio. This reflects a mix of relative performance, realisations, additional investment and currency fluctuations. UEM is predominantly invested in China through the Hong Kong Stock Exchange, where the Hang Seng Index rose by 24.5% in Sterling terms.

A detailed look at the fund’s top 20 holdings is contained in the interim report.

UEM : Utilico Emerging Markets lags index

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