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Investment Trust Insider on Utilico Emerging Markets

Investment Trust Insider on Perpetual Income and Growth

Investment Trust Insider on Utilico Emerging Markets – James Carthew: emerging markets with utilities twist

Utilico Emerging Markets (UEM) was launched in 2005 as a sister fund to Utilico Limited (UIL). Utilico had been making investments in utilities for some time and the manager could see a role for a fund dedicated to the sector in emerging markets. Last year UEM moved its domicile to the UK from Bermuda and formally became an investment trust.

UEM sits in the Association of Investment Companies’ Global Emerging Markets sector and tops the leader board for its total returns on net assets over ten years, having returned 10.7% a year over that period. Of course, ten-year performance numbers are distorted by the events of the global crisis, but its five-years figures stack up well too, ranking it second out of 10 trusts.

UEM’s focus on utilities and infrastructure (transport and communications) stocks makes it quite different to rivals in the AIC sector. In that respect it is also worth comparing it with Ecofin Global Utilities and Infrastructure (EGL) and Premier Global Infrastructure (PGIT).

Ecofin, which tends to favour utilities and infrastructure stocks in developed markets, has outperformed UEM since it listed in September 2016. Premier, which has a mixed portfolio of developed market and emerging market stocks and is highly geared by its zero dividend preference shares, has lagged UEM. Of the three, UEM offers the lowest yield (3.2%) but it is by far the largest, with a market value of £512 million.

When putting the portfolio together, Charles Jillings, UEM’s… read more here