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.
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 the fourth quarter of 2020, the fund increased 8.9% while the benchmark index rose 7.9%. In Egypt (-2.2%), the stock market fell over the last month, but sentiment was positive in Nigeria (+9.8%), Kenya (+4.7%) and Morocco (+2.3%). The biggest riser was Ecobank Ghana, the share gained 40.7%.
Sentiment on the Nigerian stock market was again very positive this month. Local pension funds have always underweight stocks with an average of approximately 5% of invested capital. But now that bond yields are falling, local pension funds are investing more in (dividend) stocks with a higher yield. Another positive contribution to the equity rally was the increase in oil prices (+6.8%).
Morocco and the United States signed two major cooperation agreements in December. The purpose of the new agreements is to promote investments in Morocco and Africa. The first agreement is for a sum of $ 3 billion, which will be used to provide financial and technical support for private investment projects in Morocco and North Africa. In addition, a letter has been signed by which the country and the US announce that they will work closely together on the "Prosper Africa" program.
The central bank of Kenya wants to stimulate the use of digital money transactions and is asking providers of digital financial services to cooperate. Especially in times of corona, digital payment is preferred. In addition, the central bank wants to apply a maximum interest rate for mobile loans (microcredit taken out via mobile phone). Safaricom (mobile telecom provider, in portfolio) can benefit from this because a lower borrowing rate will ultimately increase the transaction activity of these types of loans.
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.