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
The fund was able to add 6.50% in November, amply outperforming both the benchmark index (+1.41%) and the FM100 ETF (+0.83%). In the portfolio the positions in Vietnam and Thailand mainly contributed to the return. Thailand's stock exchange, the SET index, rose a whopping 18.31% in November, aided by positive news that tourism in the country has gotten back on track. That this is important is evident from the figures of 2019 (Ministry of Tourism) when 40 million tourists visited the country and spent more than 60 billion dollars.
Perhaps more importantly, the Regional Comprehensive Economic Partnership (RCEP) was signed by 15 Asian countries including Vietnam, Thailand, China, Japan and South Korea in November. The RCEP is the largest trade bloc in the world, creating one market for 30 percent of the world's population and 30 percent of the global economy. According to the American Johns Hopkins University this agreement will increase world income by $200 billion and add $500 billion to the volume of world trade by 2030.
The fund bought new positions in Indonesia and Malaysia, countries that are part of the RCEP, last month. In Indonesia we bought United Tracktors, a manufacturer of construction equipment. The stock is listed at 12x the expected profit with a dividend yield of 4%. We also bought Malaysian auto parts manufacturer Bermaz Auto. We expect profit growth of at least 20% for the coming years and an increasing dividend to above 5%.
Currently the fund has 77 equally weighted stocks in portfolio, which are spread over 21 different countries. The countries with the largest weightings are now Vietnam (18.09%), Pakistan (10.1%) and Nigeria (9.35%). 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 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.