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.
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
Frontier markets had a positive month in September. The fund returned 2.22% and the Frontier and Emerging ETFs rose by 2.09% and 0.86% respectively measured in euro. Within the Frontier Markets universe, the stock markets in Vietnam (+4.85%) and Kuwait (+4.32%) in particular performed well. Kuwait stocks benefited from a final inflow before the country is promoted to the Emerging Market Index in November. The fund no longer has a position in the country.
Nigeria took the cake this month: the All Share index showed a rebound of almost 10% after the central bank unexpectedly cut interest rates by one percentage point. Within the portfolio, Nigeria Breweries was an outlier with an increase of 36% measured in euro. Heineken, the largest shareholder of the largest brewery in Nigeria, bought 3.3 million shares in September.
Within the portfolio we have reduced the position in Elsewedy. The Egyptian cable company is involved in the construction of a dam in Tanzania in a World Heritage Site. This can damage the ecosystem and increases the risks to the project and possibly the company. As a result, the company no longer meets our sustainability criteria. In the past month we have taken a new position in Malaysian media & entertainment company Astro. The stock trades at 8 times earnings with a 7% dividend yield. Such a distribution will cost the company approximately RM313 million, while the consensus profit forecast is at RM548 million for next year.
Currently the fund has 70 (equally weighted) stocks in portfolio, which are spread over 23 different countries. The countries with the largest weightings are now Vietnam (18.67%), Pakistan (9.57%) and Morocco (8.97%). These markets currently contain the most interesting high dividend stocks that meet the quality requirements. This weighting is therefore mainly determined by the relative attractiveness of the market compared to the other countries. The fund can therefore deviate significantly from the benchmark index.
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.