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 August the share price of the fund declined 0.67% whereas the benchmark index fell by 1.16% over the same period, both measured in euro and based on total return. During the month the fund had a net inflow, the amount of outstanding shares rose with 3,287 to 605,098 shares. The fund AUM is currently 8.2 million euro. Since the start of the year the fund (+10.76%) outperformed the index (+7.79%). It’s the fifth consecutive year that the fund records an outperformance.
Kenya dominated the news because in a historic ruling and the first in Africa, Kenya’s Supreme Court nullified the re-election of a sitting president, ordering a new vote to be held within 60 days after finding that the outcome last month had been tainted by irregularities. This means that controlling the rising budget deficit will be delayed and fear for unrest arises. The first reaction of the market was negative, but after that things calmed down quickly and local buyers came into the market. In Egypt there was better news to report as the foreign reserves rose to USD 36.1b and is thereby back to a pre-crisis level. The economic recovery in Egypt and Nigeria is good news for the portfolio as these are the biggest countries weights within the fund.
The fund currently has positions in 35 shares, divided into 7 different countries. The countries with the greatest weightings are now Egypt (28.09%), Nigeria (24.43%), Morocco (14.75%) and Kenya (14.01%). 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.
Among the biggest winners in the portfolio were Exxaro Resources (+ 20.82%) in South Africa, Telecom Egypt (+15.68%) and KCB Group (+10.60%) in Kenya. Among the losers were Misr Cement (-19.82%) in Egypt and Total Nigeria (-19.83%), all measured in euro and based on total return.
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.