Evli Emerging Frontier

Equity fund investing in rapidly growing developing economies

NAV
02.07.2020
Return %
Year-To-Date
Return %
1 y
Return % p.a.
3 y
Return % p.a.
5 y
Return % p.a.
Since start
113.506 -9.33 -4.38 -4.36 0.74 5.68
NAV
02.07.2020
Return %
Year-To-Date
Return %
1 y
Return % p.a.
3 y
Return % p.a.
5 y
Return % p.a.
Since start
145.111 -9.33 -4.38 -4.36 0.74 5.68
NAV
02.07.2020
Return %
Year-To-Date
Return %
1 y
Return % p.a.
3 y
Return % p.a.
5 y
Return % p.a.
Since start
98.003 -8.89 -3.46 -3.44 - -0.54

Risk

5/7

Morningstar

2/5

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

31.05.2020

The fund returned 10% in May and is up 39% since the bottom of the crisis in March (while the closest index was up 1% in May and 21% from the bottom), the second month in a row in which the fund’s return was the highest of nearly 800 listed emerging market funds globally.

Of 632 companies we met in the past year, the four medical glove manufacturers in Malaysia (where 65% of the world’s supply is produced) stood to benefit most from the COVID-19 pandemic as the demand for personal protective gear and hospital supplies has skyrocketed. Of these four, one – which had just recently announced a land acquisition to expand capacity – was trading at 22x LTM EPS while competitors traded at 53x, 43x, and 28x. Its stock price was shockingly flat since the beginning of the crisis and we were surprised that almost no sell-side research had recognized the opportunity. Since we acquired this position at the end of March, the stock has increased by 400%, requiring us to trim our position twice.

In addition to finding compelling investment opportunities through a bottom-up approach, we have also spent a lot of time analyzing the impact of the crisis on the countries in which we invest. We compiled our research on the number of coronavirus cases and measures taken by the governments, how much GDP growth estimates have been revised, the amount of monetary and fiscal policy stimulus announced and how much room exists for further stimulus, the adequacy of the countries’ reserves and overall financial strength, and reliance on remittances, commodities, and tourism. We have reduced our exposure to the countries in which we see the greatest risks and have benefited from 40% of our portfolio being invested in four countries which have been more resilient (averaging only -11% since the crisis started, compared to the average EM country which has lost -24%).

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