The Nigeria Stock Exchange All Share Index has dropped 10% this year, compared with a 15% gain in an index of frontier markets. Foreign investors are frustrated over a lack of policy progress since Pr... Read more
TCM Africa High Dividend Equity is an equity fund, investing in listed shares in the northern and sub-Sahara regions of Africa. Initially it will focus on Egypt, Morocco and Nigeria. In addition, it will invest in Kenya, Ghana, Botswana and Mauritius. In principle, its portfolio will have limited exposure to South Africa. The relationship between global financial markets and African markets is low, because the latter are less sensitive to international developments. The funds investment policy will be aimed at achieving capital growth as well as dividend pay outs. The benchmark of the fund is the Africa ex South Africa Index (Total Return). The risk profile is very high, due to investments being channelled into frontier/emerging markets in Africa.
TCM Africa High Dividend Equity is a subsidiary fund of Intereffekt Investment Funds N.V (IIF)., established with a so-called umbrella 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).
In October the share price of the fund rose 3.65% whereas the benchmark index increased by 1.10% over the same period, both measured in euro and based on total return. Since the start of the year the fund (+18.07%) outperformed the index (+7.69%). It’s the fifth consecutive year that the fund records an outperformance. Morningstar rates the fund at 5 stars over this 5 year period.
This month the fund benefited from the stock picks in Egypt as Palm Hills (+29.33%), MM Group for Industry (+24.04%) and Alexandria Mineral Oils (+20%). These stocks were among the best performers. Thereby, they showed better returns than the EGX30 index which rose 5.25%, all measured in euro and based on total return. Although Egypt was the best performing market in our Africa universe, all eyes were on Kenya were Kenyatta claimed the election victory with 98 percent of the votes. A new vote was held after finding that the outcome in August had been tainted by irregularities. In spite of the unrest, Safaricom rose 3.8%. This month we took some profits as the stock rose over 23% year to date and the dividend yield has declined.
Within in the fund we have bought Lucara Diamond. The stock of this diamond miner fell over 30% in a year, but has become attractive at these levels according to our model. The company has projects in Botswana and Lesotho and trades 9.7 times earnings at a dividend yield of 4%. Recently the company was in the news when they sold the biggest diamond in the world for 45 million euro.
The fund currently has positions in 36 shares, divided into 8 different countries. The countries with the greatest weightings are now Egypt (33.55%), Nigeria (25.25%), Morocco (13.20%) and Kenya (12.44%). In these markets there are currently the most interesting high dividend shares that meet the quality requirements. Thus, the weighting of a country is mainly determined by the relative attractiveness of the market relative to the other countries. The fund can thus deviate significantly from the benchmark.
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 IIF has obtained a licence for this fund from the Netherlands Authority for the Financial Markets in accordance with the provisions of the Financial Supervision.