Over the month the fund appreciated by 4.3%. A third quarter dividend of £0.216591 was also declared giving a twelve-month trailing yield of 8.44%. This was a positive end to a strong quarter, during which time the fund posted a total return of 8.1% which compares favourably with broader indexes and alternative asset classes. We will be publishing a more in-depth quarterly analysis shortly.
Over the month Taiwanese technology continued to lead the gains, but there was also good performance from our Brazilian and South Korean holdings all of which were either flat or positive. Energy was also strong led by Petrobras and OMV Petrom in Romania. The most notable area of weakness was in Poland ahead of the general elections in October and a surprise interest rate cut, which was seen to be politically motivated.
Our largest single stock profit came from the Mexican real estate company Fibra Uno which announced a restructuring that was positive for both corporate governance and strategic direction. The two main proposals were to internalise and simplify the contentious existing management contract and to separately list the industrial assets, given the strong demand from near-shoring companies. The stock moved 20% in a day which we subsequently used to take some profit as we already have clear exposure to the industrial sector with Fibra Macquarie (which already has excellent governance), and we have some concerns that the asset separation will not pan-out as positively as anticipated.
In other portfolio changes, we reduced some of our positions that have performed well and were near fair value such as Jumbo (Greece), Chicony (Taiwan) and some of the resource names. We have also started to trim Citic Telecom (Macau) which has been one of our largest positions since launch and has performed well in both absolute and relative returns. We are still very positive on the company but have been recycling profits into other Hong Kong names. Elsewhere, we used the proceeds from Fibra Uno to buy the Mexican bank Ban Bajio, which continues to enjoy very high net interest margins (7.2%) whilst the outlook for loan growth and credit quality both remain strong. The bank has a very solid balance sheet with clear excess capital and yet still generates a return on equity well above 20%. It pays a 10% dividend and has a lower withholding tax than Mexican REITs such as Fibra Uno. In Poland we also added to our position in Bank Pekao given the weakness in the market and the similarly strong fundamentals and attractive yield spread.
More broadly, the move in the dollar and US Treasuries over the past few months has thankfully had a relatively benign impact on the portfolio. Some countries are clearly more sensitive to these factors than others, with China being the most relevant. The irony is that whilst the US continues to pursue restrictive monetary policy, China is doing the exact opposite. Last month saw further measures including a rate cut to existing (rather than new) mortgages. We continue to see smoke signals that the economy is slowly recovering despite the problems in the real-estate sector. The September PMI survey remained over 50, electricity demand in September was up 9.9% year on year, which is a big number and has gathered momentum through the year. This is being increasingly corroborated by our bottom-up company interactions, where our holistic impression is that business activity is challenging but certainly better than the consensus view.
We remain sceptical about the longer-term prospects for China but continue to cautiously add to compelling individual opportunities. We have a strong preference for Hong Kong domiciled companies where there’s a significantly better tax and currency framework. We also expect to see some further supportive measures specific to Hong Kong real-estate to be announced in October.