Utilico Emerging Markets seeks long-term total return predominantly through investing in infrastructure, utility and related sectors, mainly in emerging markets. The manager follows a primarily bottom-up approach independent of index weightings. The company has an indefinite life subject to five yearly continuation votes. Performance fees are calculated by reference to the post-tax yield on FTSE Actuaries Govt. Securities UK Gilt 5-10 years plus inflation plus 2%, and company publications compare performance with the MSCI EM index.
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.