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).
Fund performance
The Fund Manager writes
The Frontier Markets (FM) index sidestepped the heavy sell-off in global equities last month, with a 2.6% rise thanks to a rebound in Argentina (+ 13.55%) and continued strength in Kuwait (+ 4.01%) ), as investors await a ruling from the index provider later in June on Kuwait’s potential reclassification to Emerging Markets (EM). By contrast, emerging and developed markets were 6.8% and 5.2% lower, all measured in euro on the basis of total return.
Within the universe of FM, the performance in the last 12 months varies considerably. The resilience of FM is mainly due to the strong performance of Kuwait (+ 36% 12m return), while various FM have fallen 10-30% in the last 12 months, including Pakistan, Argentina, Nigeria and Sri Lanka. That is also the reason why the TCM Global fund has struggled to keep up with the index in recent months. While the index has a weighting of 30% in Kuwait, the diversification across countries within the fund is much less concentrated with a maximum of 20% per country. In the long term, this will benefit the risk / return ratio. The fund currently has (equal weighted) positions in 82 shares in 22 different countries.
Now that Argentina has been promoted to the EM index on May 28, the weighting in the country will be reduced in favour of Morocco and Kenya, among others. Vietnam remains the largest position in terms of country weighting (12.33%) within the fund. The country appears to be the winner in the trade war between the US and China. Vietnamese exports to the US have grown by more than 50% over the past year. Research Institute Capital Economics has therefore increased the economic growth forecast for this year from 6% to 6.5%. In its World Economic Outlook, the IMF even holds it at 7.1%.
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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.
