Utilico Emerging Markets Trust Reports Strong NAV Return of 25.9% and Dividend Increase

Utilico Emerging Markets Trust has put in a very solid set of annual results on the board. For the year to 31 March 2026, net asset value – or NAV, the value of the portfolio after debts – delivered a total return of 25.9%, while NAV per share jumped 21.9% to 313.54p.

That is a sharp recovery from last year’s weak showing, and it came in a period that management says was full of geopolitical noise, tariff disruption and late-year volatility. For retail investors, the simple takeaway is this: UEM’s specialist focus on emerging markets infrastructure and utilities held up well, generated strong income, and kept the dividend growth story intact.

Utilico Emerging Markets Trust annual results 2026: the key numbers investors need

Metric	2026	2025
NAV total return per share	25.9%	-2.9%
NAV per share	313.54p	257.28p
Share price total return	30.2%	1.8%
Gross assets	£572.7 million	£497.4 million
Revenue EPS	13.57p	9.95p
Ordinary dividends per share	9.585p	9.125p
Special interim dividend	2.50p	Not disclosed
Discount to NAV	13.6%	16.0%
Net gearing	1.4%	2.8%

Why UEM’s 25.9% NAV return is strong, even if it slightly trailed the MSCI EM Index

There is a nuance here worth understanding. UEM’s 25.9% NAV total return is excellent in absolute terms, but it was a touch behind the MSCI EM Index, which rose 26.8% over the same period.

Normally, that might take a bit of shine off the result. But the board makes a fair point: UEM is not trying to hug the benchmark, and it had less direct exposure to the AI and technology names in Asia that drove a lot of index excitement this year. In other words, this was not a momentum-chasing portfolio, and it still delivered a very strong year.

More importantly, the longer-term numbers remain impressive. Over five years, UEM’s NAV total return was 61.8% versus 25.4% for the MSCI EM Index. Since inception, the trust says NAV total return is 564.2% compared with 411.7% for the index. That matters because it suggests the strategy has added value across cycles, not just in one good year.

Dividend increase, special payout and full earnings cover: income investors will like this

The dividend story is one of the biggest positives in this RNS. UEM increased its ordinary dividend by 5.0% to 9.585p per share, marking the 11th consecutive annual increase. On top of that, it announced a special interim dividend of 2.50p per share.

Better still, those dividends were fully covered by earnings. Revenue earnings per share rose 36.4% to 13.57p, and total revenue income climbed 29.0% to £30.7 million.

That said, investors should not assume this year’s income growth is entirely repeatable. The company explicitly says revenue was boosted because several Brazilian companies brought forward dividend payments before higher withholding tax took effect on 1 January 2026, and because Umeme paid a significantly higher dividend. That is good news, but it also looks at least partly timing-driven rather than a clean new run-rate.

The board seems aware of that. Its decision to pay a special dividend, while still protecting the ability to grow the regular quarterly dividend over time, looks sensible rather than reckless.

Portfolio winners in Brazil, Chile and ports drove performance for Utilico Emerging Markets Trust

The best performers came from exactly the sort of assets UEM specialises in: essential infrastructure with pricing power, cash flow and long-term demand. The top contributor was Orizon in Brazil, adding 4.6% to NAV total return, followed by International Container Terminal Services at 3.7% and Sabesp at 3.3%.

Axia and Alupar also made strong contributions. Across the portfolio, Latin America was a clear sweet spot, helped by stronger local equity markets, a weaker US Dollar and improved political sentiment in places like Chile and Brazil.

Sector-wise, Social Infrastructure rose to 34.7% of total investments, while Energy Growth and Transition increased to 30.2%. Digital Infrastructure fell to 20.0%, partly because UEM exited InPost and remained more focused on the underlying digital plumbing – data centres, fibre and towers – than on the fashionable AI software trade.

That approach has logic. Boring but essential assets often age better than hype.

Not everything went right

There were some obvious weak spots. FPT reduced NAV contribution by 1.3%, Petalite by 0.8%, and SUNeVision, Converge and NHPC also detracted.

The bigger red flag is the unlisted book. Level 3 investments fell to £8.2 million from £13.4 million, and both Petalite and Conversant Solutions were written down to zero. Management has repeated that no new unlisted investments will be made except in exceptional circumstances, which feels like a quiet admission that this area has not covered itself in glory.

Share buybacks, narrower discount and low gearing improve the investment case

One of the frustrations with investment trusts is that even when the portfolio performs well, the share price can still lag if the discount to NAV stays stubbornly wide. UEM made progress here.

The discount narrowed from 16.0% to 13.6%, while the share price total return was 30.2%, ahead of the NAV total return. The company bought back 10.8 million shares at a total cost of £27.6 million, and says the buyback added 0.7% to total return.

That matters because buybacks at a discount can be accretive – meaning they can increase NAV per share for continuing holders. The board is clearly serious about tackling the discount and says it wants to maintain a single-digit discount in normal market conditions on a sustainable basis.

Balance sheet risk also looks modest. Net gearing was just 1.4%, down from 2.8%, and although borrowings rose to £21.8 million, the year-end cash balance also increased to £14.1 million. This is not a trust swinging wildly with leverage.

Geopolitical risk is real, but UEM’s Middle East exposure is low

The main near-term concern is macro and geopolitical risk. Management highlights the wider conflict in the Middle East, rising energy prices and tougher inflation outlooks for emerging markets that import energy.

That said, UEM’s direct Middle East exposure was only 1.4% of total investments at year end, down from 1.7% a year earlier. So while the fund cannot avoid global knock-on effects, it is not heavily exposed to the region itself.

My take on Utilico Emerging Markets Trust’s 2026 results

This is a good result, full stop. Strong NAV growth, strong share price performance, higher income, a rising ordinary dividend, a special payout and a narrowing discount is a very decent combination.

The only real caution flags are that revenue growth had some one-off help, and the write-downs in unlisted investments show that not every idea lands cleanly. Also, while 25.9% is excellent, it is still worth noting the trust slightly lagged the MSCI EM Index in this particular year.

Still, the broader picture looks positive. UEM continues to offer something fairly distinctive in the UK market: specialist exposure to emerging markets through utilities and infrastructure rather than through the usual big tech-heavy route. If you want emerging markets with a bias to real assets, income and long-term essential services, these results suggest the trust is doing what it says on the tin.