TCM Global Frontier High Dividend Equity invests in stocks listed on the local exchanges of the Frontier Markets Universe. To set up the portfolio the fund will make a selection of countries on the basis of quantitative and qualitative screening. By using these selection criteria the fund will have a diversified portfolio invested in several countries and sectors. The equally weighted portfolio will be re-weighted and re-allocated on a periodically scale. The risk profile is high, due to investment in equities and Frontier Markets.
In principle, the fund will pay out dividend twice a year with an expected dividend yield of approximately 5% per annum. The benchmark of the fund is the Frontier Market Index (Total Return).
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
The price of the fund rose by 1.86% in January. The benchmark index went up by 2.39% over the same period, both measured in euro on the basis of total return. The number of outstanding shares went up by 1,975 shares to 2,267,908 shares.
In the first month of the year, the Vietnam and Nigeria stock exchanges were particularly successful. The Ho Chi Minh Stock index increased by 9.48% measured in euro. The fund currently has the largest weighting in Vietnam. We have slightly reduced this weighting in January by taking profits from Ho Chi Minh City Infrastructure (CII) and Ho Chi Minh Securities (HCM). Both shares have risen considerably and as a result of this rise the stock does not longer meets our dividend criteria. HCM was one of the best performing stocks in January with a return of more than 30%. Nigeria is also back on the radar of investors. After the exchange rate has been reset and a recovery in the oil price, the economy seems to have passed through the recession. Especially the Tier-1 banks have the interest of investors and those stocks belonged to the best performing positions within the portfolio in January. For example, Access Bank (19.36%), United Bank for Africa (+ 18.76%) and Guaranty Trust Bank (16.17%) showed considerable increases.
Within the fund we have taken new positions at Kaz Mineral in Kazakhstan and Stalexport Autostrady in Poland. The latter is an operator of toll roads and is also active in road construction. The share currently stands at 7.4x the expected profit with a dividend yield of more than 4%. We also expect that the dividend will be higher this year.
The fund currently holds (equally weighted) positions in 83 shares across 23 different countries. The countries with the largest weightings are now Vietnam (12.78%), Bangladesh (11.46%) and Egypt (10.96%). 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 attractiveness of the market relative to the other countries. The fund can therefore deviate significantly 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.