Evli Emerging Frontier

Equity fund investing in rapidly growing developing economies

NAV
12.09.2019
Return %
Year-To-Date
Return %
1 y
Return % p.a.
3 y
Return % p.a.
5 y
Return % p.a.
Since start
125.586 12.80 7.16 1.32 5.77 7.57
NAV
12.09.2019
Return %
Year-To-Date
Return %
1 y
Return % p.a.
3 y
Return % p.a.
5 y
Return % p.a.
Since start
154.126 12.80 7.16 1.32 5.77 7.57
NAV
12.09.2019
Return %
Year-To-Date
Return %
1 y
Return % p.a.
3 y
Return % p.a.
5 y
Return % p.a.
Since start
103.297 13.55 8.18 - - 1.11

Risk

5/7

Morningstar

0/5

Recommended Investment Horizon

9 years or more

Administrative fees

1.90 % p.a.

+ a daily determined performance fee of 20% of the return that exceeds 8% p.a., which is used as a reference return, applying the High Water Mark principle for a minimum period of 24 months.


Suitable for investors

  • investors who wish to benefit from economic growth in the emerging economies
  • investors who wish to benefit from the world’s fastest growing consumer markets
  • investors who seek high returns and can tolerate the risks associated with the emerging markets
  • as a part of a diversified investment portfolio due to the high risk level

Invest

min. 1 000 € or 50 €/month

Evli Emerging Frontier Fund is an equity fund that invests its assets in the equities and equity-linked securities of companies operating in the emerging markets and in the frontier markets of the emerging economies. The fund’s geographical investment coverage consists of emerging economies or markets in Asia, Africa, Central Asia, the Middle East and Latin America. The fund may invest in derivatives contracts both for hedging purposes and as part of its investment strategy.

The fund’s investment strategy is active and is based on stock selection. Investments are made in consumer-focused companies with growing cash flow and low market valuations.

The strategy’s target markets are generally less known and less accessible for investors, while their economic growth is forecast to outperform that of the developed economies. This offers investors good diversification and an opportunity for high return.

 

 

The portfolio is managed by

Evli Fund Management Company

Investment Objective and Risks

The fund’s investment activities are aimed at maximizing the increase in the value of assets. The fund does not have an official benchmark index.

As the fund’s return expectation and risk level are high, we recommend the fund to experienced investors with long investment horizons. All the fund’s assets are invested in emerging economies’ equity markets, which means that the fund’s value may fluctuate abruptly within a short period as a result of the general performance of the target markets and exchange rate fluctuations. To minimize the fund’s risks, its investments are diversified extensively on a geographical basis and across different industries.

Monthly review

31.08.2019

We spent the entire month in Indonesia, visiting companies, undertaking due diligence site visits, meeting regulators at the central bank and ministry of state-owned enterprises, attending industry forums, and discussing the economy's prospects with domestic investors and  members of the local business community.

One company we met with was a media business we own. Its P/E ratio is only 7x despite its dominant position in the market, strong progress in the digital space (its news website overtook Google this month as the most visited site in Indonesia), and the recent return of the founding CEO who had been key to the success of the business before taking a hiatus to focus on politics. We believe there is potential for future earnings growth and valuation increase, and we built our position further.

August was a particularly turbulent month for investors with exposure to Argentina as the pro-market incumbent president lost in the primaries, which resulted in the country’s stocks falling 50% in euro terms, the second worst ever single-day loss of a stock exchange on record. Earlier this year, we ran a project whereby we analyzed all major emerging market currency devaluations over the past 30 years. We looked for common causes to develop a sophisticated macro risk management framework to integrate into our investment process. This project led us to sell our holdings in Argentina several months ago, partially because we found that political transitions tend to be a particularly likely time for crises to occur. As a result, while the closest index to our strategy (which started the month with 8% exposure to Argentina) fell by 4%, we were protected. Even though we remain focused on bottom-up stock selection, we have found that avoiding the wrong countries can generate significant value relative to investing in passive investment strategies.

Fund facts

Type of fund Equity fund investing in emerging markets (UCITS)
Investment activity began 08.10.2013
Benchmark index No official benchmark index
Profit distribution Fund-units are divided into A and B units. Profit share of at least 4% is distributed on A units annually.

Downloadable files

Invest

min. 1 000 € or 50 €/month