TCM Africa High Dividend Equity is a high dividend equity fund, investing in listed shares in the northern and sub-Sahara regions of Africa. Initially it will focus on Egypt, Morocco and Nigeria. In addition, it will invest in Kenya, Ghana, Botswana and Mauritius. In principle, its portfolio will have limited exposure to South Africa.
The funds investment policy will be aimed at achieving capital growth as well as dividend pay outs. In principle, the fund will pay out dividend once a year with an expected dividend yield of approximately 4-5% per annum.The benchmark of the fund is the Africa ex South Africa Index (Total Return).
The risk profile is high, due to investments being channelled into frontier/emerging markets in Africa. The relationship between global financial markets and African markets is low, because the latter are less sensitive to international developments.
TCM has entered into an agreement with Sustainalytics for the screening of the portfolios of the TCM equity funds on ESG criteria (UN Global Compact and Controversial Weapons).
The Fund Manager writes
In January the fund price rose 4.18% while the benchmark index rose 2.72% over the same period, both measured in euro and based on total return. The number of outstanding shares increased by 11,585 to 581,023 units in the past month.
The outlook for Sub-Saharan African economies is improving, according to research firm Capital Economics. More countries are showing increasing growth and inflation is expected to fall on the continent, allowing central banks to pursue an expanding monetary policy. However, growth in the region is mainly driven by Nigeria and South Africa. Nigeria made a strong start this year. The Nigerian Stock Exchange Main-Board index rose 11.97% in January, measured in euro. The economy shows signs of improvement now the exchange rate has been reset and the price of oil is rising.
Especially the Tier-1 banks were the strongest risers in the portfolio in January. For example, Acces Bank (19.36%), United Bank for Africa (+ 18.76%) and Zenith Bank (16.45%) showed considerable increases. We have slightly reduced the weight in these banks this month, because the rapid price rises led to a relative large exposure.
We have also acquired a new position within the portfolio. It concerns Reunert in South Africa (Electrical Engineering, ICT etc.). The share currently trades at 9.35 times the expected profit with a dividend yield of 6.62%.
The fund currently holds positions in 33 shares in 8 different countries. The countries with the largest weightings are now Egypt (32.46%), Nigeria (22.13%), Morocco (12.65%) and South Africa (10.67%). These markets currently have the most interesting high dividend stocks that meet the quality requirements. The weighting of a country is therefore mainly determined by the relative attractiveness of the market compared to other countries. The fund can therefore deviate strongly from the benchmark.
No rights may be derived from this publication. You are referred to the prospectus and Key Investor Information Document for the fund's terms and conditions. These documents may be obtained from the website or the address mentioned below. The manager of the fund has obtained a licence for this fund from the Netherlands Authority for the Financial Markets in accordance with the provisions of the Financial Supervision.