The year to the end of September 2015 was a tough one for emerging European markets. Baring Emerging Europe saw its net asset value fall by 20.5% and its share price fall by 17.6% over this period but this was better than their benchmark index, the MSCI EM Europe 10/40 Index which fell by 23.0%. They are paying a dividend of 23p, up from 19p in the previous year. this figure includes 2p of withholding tax recoveries though which the statement says are unlikely to recur in the new financial year.
During the year the Board rejected the idea of a wholesale inclusion of North Africa and the Middle East in the fund’s remit but did increase the amount the manager is permitted to invest there to 5%.
They have deployed $17m of the fund’s $20m borrowing facility to bring the gearing level to 9% at the year end.
The manager’s report says, overall, stock selection contributed the lion’s share to relative outperformance, most of it stemming from successful stock picking in Poland. Further, the underweight position in Greek equities added to relative performance, while the portfolio’s overweight position in Turkey and underweight position in Hungary both contributed negatively to performance. The Russian stock market’s influence on relative performance was neutral.
Unfortunately the report doesn’t identify which holdings contribute to the fund’s performance.
BEE : Baring Emerging outperforms falling markets