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
In November the fund returned 6.61% thereby outperforming the index (+2.56%) and the tracker (+4.62%). The extra return came mainly from value shares. For example, positions in Pakistan and banks from Nigeria were among the strongest gainers. Pakistan's KSE-100 Index rose 16.42% in euro over the past month; reaching the highest level in seven months. The country is recovering from a crisis which required a $6 billion dollar loan from the IMF to stabilize the economy. Cheap valuations and high dividend yields are now attracting foreign investors who bought $64 million dollars in Pakistani shares this year. It is the first positive net inflow since 2014. Shares in Sri Lanka also performed well, after the results of the elections on 16 November were well received by investors. The Sri Lanka Colombo All Share Index rose nearly 6% (in euro) during the month.
Within the portfolio the share price of Airtel Africa increased by almost 30%. The telecom company, which is mainly active in East Africa, reported excellent half-year figures. Profit before tax amounted to $316 million dollars compared to $122 million dollars in the same period the year before. Furthermore the company passed the milestone of 100 million customers. During the month the fund reduced the weight in Hatien Cement in Vietnam. The share price rose by almost 25% since the start of the year and now the stock is reset to a more equal weighting within the portfolio. From the proceeds we added to the position in Bank of Georgia. The stock trades at only 6 times the expected earnings with a dividend yield of almost 5%.
The fund currently has positions in 72 shares across 23 different countries. The countries with the largest weightings are now Nigeria (11.67%), Vietnam (11.16%) and Kenya (8.39%). In these markets there are currently the most interesting high dividend shares 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 considerably 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.