Jacqueline Broers, Deputy Portfolio Manager of UEM, looks back at September’s portfolio performance.

In September, UEM’s NAV total return decreased marginally by 0.1%, underperforming the MSCI Emerging Markets Total Return Index, which was up 4.4% in Sterling terms.

Global markets in September on the whole, ended in positive territory. The US market, the S&P Index, despite the slow start to the month, on the back of softer macroeconomic data, ended up 2% driven by the long-anticipated start of the US Federal Reserve rate cutting cycle, the ECB also lowered rates during the month whilst the Bank of England held rates.

The big shift in the month, though, was the Chinese market. The Chinese market during the month started sluggishly as retail sales and industrial production all continued to slow. However, on the 24th of September, the Chinese Central Bank, the PBOC, announced a slew of measures to revive growth. The epic stimulus package helped to boost the markets with the Hang Seng and Shanghai Composite Index both recovering at the end of the month, up by 17.5% and 17.4% respectively, the easing of the US and Chinese monetary policy helped many other emerging markets deliver solid market performances.

The Philippines PSEi Index was up by 5.4% for the month, benefiting also from the Philippines Central Bank cutting interest rates as inflationary pressure continues to trend downwards, whilst the Thai SET Index was up by 6.6%.

The Indian market was also up by 2.3% as macro conditions remained favorable, Brazil was one of the outliers for the month of the market down by 3.1%.

The Brazilian Central Bank bucked the trends being witnessed in most countries and raised interest rates the first time in over two years, to 10.75% with a Central Bank indicating that there are more increases ahead as they tackle a challenging inflationary outlook driven by stronger than expected economic activity. Further, the Brazilian market was also had not helped by concerns around the government's loosening fiscal discipline.

The Turkish market was also down by 1.7% as inflation continues to run higher than expected, complicating the outlook for monetary policy decisions.

Within UEM, there was only one change the top 30 during the month, Vietnam Holding Ltd replaced China Datang due to share price appreciation and a reduction in position on China Datang.

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