Ashoka WhiteOak Emerging Markets Trust (AWEM) has published its annual results for the year ended 31 March 2025, reporting a NAV total return of 8.8% for the period, 3.0 percentage points ahead of its benchmark, the MSCI Emerging Markets (GBP) Index. Since its IPO in May 2023, AWEM’s NAV is up 21.7% compared with a 14.5% return from the index, which the trust says puts it firmly in the top decile of the broader open- and closed-ended EM peer universe. (Note: at the time of writing, only a summary of the report was available on RNS and the full report was yet to be published on the company’s website, which obviously limits our ability to comment on the results here.)
Aided by tight discount control and demand from investors, AWEM’s share price rose from 105.0p to 122.5p over the year, producing a share price total return of 16.7%.
Strong stock selection drives outperformance
The manager’s stock selection was the primary driver of returns during the year, particularly within industrials, financials, healthcare, and materials. Notably, small and mid-cap holdings outperformed their large-cap counterparts – despite that segment lagging the broader market index overall.
Key stock contributors included: KRN Heat Exchanger and Refrigeration (India), Awfis Space Solutions (India), Alibaba Group (China), Taiwan Semiconductor Manufacturing Co, and Hong Kong Exchanges & Clearing. In total, 55% of portfolio holdings contributed positively to relative performance.
Premium rating supports capital growth
The trust has continued to trade close to or at a premium to NAV throughout the year, underpinned by AWEM’s annual redemption facility. AWEM says that its discount control mechanism has helped attract new capital, allowing the trust to issue 3.28m new shares across 18 placements during the year, equivalent to 10.2% of the starting share capital. It adds that, post year-end, a further 1.33m shares have been issued, raising an additional £1.6m, bringing total issuance since launch to over 4.6m shares.
Navigating a volatile post-year-end environment
Since 31 March 2025, the trust has returned 3.8% on a NAV basis to 19 June 2025, weathering recent tariff-driven volatility in emerging markets. Chair Martin Shenfield noted that while macro risks remain elevated, the manager continues to find compelling opportunities in high-quality, under-researched small and mid-cap names. He added that emerging markets remain attractively valued on a historical basis and under-owned by global investors, presenting a favourable backdrop for active stock pickers.
[QD comment Matthew Read: It is still early days for AWEM but, having outperformed its benchmark for the first two years of its life and the fact that it is tends to trade at a premium – no small feat in current markets – the message seems to be, so far so good for AWEM. It also appears that the redemption facility has helped anchor the share price close to NAV and enabled continued issuance, which also bodes well for further growth. For investors looking for active, benchmark-aware exposure to emerging markets, AWEM is one to watch.]
