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 the third quarter, the fund rose 5.77% measured in euro on a total return basis, ahead of the Frontier 100 ETF, which rose 4.62%. The positions in Vietnam, Morocco and Turkey in particular contributed positively to the result, while the holdings in Thailand weighed on returns.
In the past month, Nobai Cargo Terminal (NCT) was one of the eyecatchers in the portfolio with an increase of 14.79%. The company is a cargo handling service provider based at Noi Bai International Airport and is benefiting from the resumption of air traffic after the pandemic. The stock is currently trading at a P/E of 10.5 with a dividend yield of 7.5%.
Another notable riser in the portfolio is the Turkish Tofas. The share rose in the third quarter by more than 75% measured in euro. Tofas Turk Otomobil produces cars and car parts under license from Fiat. The company benefits from improved efficiency in production and sales. In addition, there are opportunities in the production of electric vehicles and targeting different export markets, such as Africa. The stock is trading at a P/E of 8.8x with a 7.5% dividend yield.
In Ghana, President Nana Akufo-Addo announced that the economy grew by 8.9% in the second quarter from an initial estimate of 5%. This makes the country one of the fastest growing economies in the world. Ghana's economy has remained relatively strong during the corona pandemic. While most countries were in recession, GDP growth in Ghana remained positive at 0.4% over the full year. Within the portfolio, we have exposure to Cal Bank and Ecobank Ghana which are up 27% and 20% respectively so far this year, measured in euro on a total return basis. Despite this, both banks still trade at a P/E of less than 2x with a dividend yield of around 15%.
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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.
