London, UK, 25 April 2019
Edison issues review on Utilico Emerging Markets Trust (UEM)
Utilico Emerging Markets Trust (UEM) has been managed by Charles Jillings at ICM Group since the fund was launched in 2005. He continues to find interesting infrastructure and utility investment opportunities in emerging markets. The manager notes that investee companies have strong earnings growth, supporting higher dividend payments; however, he says that company valuations have not kept pace with earnings growth, providing opportunities for revaluation. Jillings is constructive on the outlook for emerging market equities, and comments that a resolution to the US-China trade dispute would be beneficial for most regions. He is optimistic regarding a positive outcome, given the high importance to both parties in reaching an agreement.
UEM's current 11.0% discount to cum-income NAV compares with the 9.3% to 12.8% range of average discounts over the last one, three, five and 10 years. The trust has a progressive dividend policy; annual distributions have increased or been maintained since the fund was launched (July 2005). UEM currently offers a dividend yield of 3.2%. It can gear and has a £50m committed bank facility (1.1% net debt position at end-March 2019).
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