Utilico Emerging Markets Trust plc

UEM's NAV total return increased by 1.6% in July, whilst the MSCI Emerging Markets Net Total Return GBP Index declined by 4.4% primarily due to the partial unwinding of the AI-related market theme. Given UEM's focus is predominantly on infrastructure and utilities which are typically more defensive in nature, the fund continues to weather significant market volatility. The reversal in sentiment toward AI-related names was driven by renewed concerns over the sustainability of AI capex, financing and monetisation. The Korean Kospi Index continued to see 5-10% daily movements and ended the month down by 22.2% – albeit it was actually down 34.0% before a sharp upward rally on the last day of July. For similar reasons, the Taiwanese TWSE Index fell 6.5% and the Nasdaq Composite Index also declined 3.2% over the month. While the S&P 500 Index proved more resilient, down by 0.1% over the period and hitting an all time high during the month as second quarter earnings results were better than expected, supporting market sentiment.