Barings Emerging EMEA Opportunities (BEMO)

Barings Emerging EMEA Opportunities (BEMO) provides investors with access to the underappreciated markets of Emerging Europe, the Middle East and Africa (EMEA), where returns are increasingly shaped by commodity cycles, domestic reform backed by capital investment and global and regional political developments. This differentiated opportunity set, combined with relatively low correlation to broader global markets and diversification across a wide range of economies, has supported strong longer-term returns, with BEMO outperforming the MSCI EM EMEA Index by roughly 16 percentage points over three years. Performance over the past 12 months has been closer, with NAV and share price total returns of 26.0% and 32.7%, respectively, compared to 25.8% for the benchmark. Strong contributions came from South African resource companies, emerging European financials and selective investments across the Middle East, although the trust has experienced some volatility following the Iran conflict.

Following the 2025 continuation vote, both the board and managers have taken steps to sharpen BEMO’s overall proposition. One notable change comes via the Portfolio. The managers are now committed to running a more concentrated portfolio, with fewer holdings and greater emphasis on building higher-conviction positions. Additionally, the option to employ Gearing through index futures has been reintroduced. Although not yet deployed, this gives the managers greater flexibility to take advantage of periods where markets become materially dislocated from fundamentals.

BEMO is managed with a clear focus on capital growth rather than income generation, but dividends play a prominent role within the overall proposition. A new progressive Dividend policy commits the trust to annual dividend growth, funded through both portfolio income and capital. For FY2025, the board recommended a total dividend of 19.5p, an increase of 5.4% year-on-year.

At the same time, the board has introduced additional shareholder protections, including a revised tender offer mechanism, annual continuation votes and more active use of share buybacks. BEMO currently trades on a 12.3% Discount, narrower than its five-year average of 16.7%.