Africa
Fund profile
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% per annum.
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.
To achieve its objective, the Fund invests 95% to 100% of its total assets through TCM Investment Funds Luxembourg in units of TCM Africa High Dividend Equity (Lux). The Fund qualifies as feeder-structure.
Sustainability
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
During the month of October, the fund was up 0.2% and the benchmark index 4.3%. With the exception of Kenya (-3.9%), sentiment was positive in African countries such as Egypt (+4.9%), Nigeria (+4.6%) and Morocco (+2.7%). The biggest increase this month was the Egyptian share Commercial International Bank (+20.6%). The lender announced the 2nd quarter figures, a profit increase of 24% compared to last year.
Shares of Airtel Africa reached a new high last month, after better-than-expected figures came in here too. Earnings for the past quarter rose 20%, driven by strong growth in mobile money transactions. Airtel is listed in London and is one of the largest telecom operators in the sub-Sahara region with a number 1 or 2 position in 11 of the 14 markets in which it operates. After the figures, the share shot up 12%, bringing the annual result to +57%, measures in euro.
In Nigeria, the Purchasing Managers Index (PMI) rose to 54.1. The PMI report attributed the increase to improvements in global economic demand, which led to higher exports. Demand for Nigeria-made goods and services rose for the third month in a row this year. Faster increases in production, new orders, purchases and employment supported growth. The Stanbic IBTC report also noted that the employment index rose.
The fund currently holds 31 stocks in 7 different countries. The countries with the largest weightings are Egypt (30%), Nigeria (21.4%) and Morocco (18.8%), and. These markets currently have the most interesting high-dividend stocks that meet the quality requirements.
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Disclaimer
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.
