Barings Emerging EMEA Opportunities PLC on Monday said it delivered a ‘significant total net asset value return’ as it highlighted expectations of a supportive economic environment.

The investment trust seeks capital growth through investing in emerging and frontier equities listed or traded on Eastern European, Middle Eastern and African securities markets.

For the financial year ended September 30, the trust achieved an annualised total NAV return of 17%, whilst its benchmark, the MSCI EM EMEA Net Index, returned 8.5% over the same period.

NAV per share for the period grew on-year by 14% to 706.4 pence from 617.7p.

The trust also outperformed the benchmark last financial year when it realised a 0.5% total NAV return compared with the benchmark’s minus 3.4%.

The trust said its outperformance in the period can be largely attributed to stock selection based on its investment manager’s ‘bottom-up investment process’.

Providing an example of this, the trust highlighted how the Turkish equity market edged lower throughout the period, stating that its portfolio was underweight in exposure relative to the benchmark and adding that the Turkish stocks within its portfolio actually delivered positive double-digit returns.

It proposed an upping of its final dividend for the period by 14% to 12.5p per share from 11p the previous year.

Chair Frances Daley said: ‘It gives me great pleasure to report that our investment manager delivered a significant NAV total return of 17.3%, outperforming the benchmark by 8.8%.

‘Amid all the uncertainty, the economic environment should be supportive. In the US and most other developed markets, inflation has been brought under control without causing a recession, allowing central banks to stimulate activity by reducing interest rates.

‘Lower rates will squeeze the profitability of the region‘s financial services companies that form the portfolio’s single largest sector weighting. This negative effect will be partially offset, however, by rising consumption and a reduction in credit risks for most banks.’

Shares in the trust were down 0.7% at 623.30p on Monday afternoon in London.

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