Global Frontier
Fund profile
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.
To achieve its objective, the Fund invests 95% to 100% of its total assets through TCM Investment Funds Luxembourg in units of TCM Global Frontier 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
In October, the fund managed to add +3.64%, bringing the total return for 2021 so far to +22.79%. The holdings in Vietnam contributed most to the positive result, while stocks in Bangladesh and Kenya were under pressure.
Policymakers in Vietnam are considering a $35 billion stimulus package and looser monetary policy to help the economic recovery after the pandemic. The Vietnamese Prime Minister predicts that economic growth will pick up next year to a range of 6% - 6.5% after an estimated growth of 2.5% - 3% for this year. The target has also been set to achieve a vaccination coverage of 80% of the population in the first quarter of next year.
The trendsetter in the portfolio this month was Namlong Investment, a real estate developer that develops affordable housing. Despite a fourth wave of Covid-19 infections, the company reported figures for the first 9 months that were at the higher end of expectations. The stock shot up almost 40% in October bringing the year-to-date return to +112%, measured in euro. We partly took a profit on this, because otherwise the position would become too large within the portfolio.
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.
Finally, we funded a new position on Lafarge Africa from the dividends received from Nigeria. The company supplies cement products, aggregates and construction materials and is trading at 7.7x expected earnings for FY22 on a 7.2% dividend yield.
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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.
