Evli Emerging Frontier

Equity fund investing in rapidly growing developing economies

NAV
20.10.2020
Return %
Year-To-Date
Return %
1 y
Return % p.a.
3 y
Return % p.a.
5 y
Return % p.a.
Since start
123.736 -1.16 0.85 -0.49 3.71 6.73
NAV
20.10.2020
Return %
Year-To-Date
Return %
1 y
Return % p.a.
3 y
Return % p.a.
5 y
Return % p.a.
Since start
158.190 -1.16 0.85 -0.49 3.71 6.73
NAV
20.10.2020
Return %
Year-To-Date
Return %
1 y
Return % p.a.
3 y
Return % p.a.
5 y
Return % p.a.
Since start
107.142 -0.40 1.82 0.46 - 1.72

Risk

6/7

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
  • who want to invest responsibly and take into account not only economic analysis but also environmental, social and good governance (ESG) factors.

Invest

min. 1 000 € or 50 €/month

Investment Policy

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.

Responsibility

ESG factors are integrated into the fund’s investment decisions, and portfolio managers meet with the management of the investment before making an investment decision. In addition to Evli's general exclusion practices, the fund excludes alcohol and weapons manufacturers, gambling companies and companies mining, extracting and drilling fossil fuels from its investments.

 

 

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

30.09.2020

In September, a media content producer in Thailand became the fifth stock in our fund to double this year despite the pandemic. We originally bought this company at a valuation of only 10x P/E after meeting its CEO during our month-long trip to Thailand last November. The market seems to have overlooked this obscure company which has been producing more content at better margins. Additionally, it has thrived during COVID-19 when TV networks could not produce their own content due to lockdowns and had to outsource more. We believe its upcoming listing on Thailand’s main stock exchange next month could be the next catalyst.

The five portfolio companies that doubled have contributed to our fund’s remarkable flat performance in a struggling market (-3% vs -23% for the average emerging market) and the fund’s since-inception ranking of #2 out of all 22 listed frontier funds globally. However, this performance hasn’t been without volatility. In fact, our 49% 6-month return was preceded by a -35% decline during the first quarter of the year. Although the average emerging market had fallen by almost the same amount, it takes patience for investors to realize superior returns over the long run.

It’s no coincidence that we have had very few redemptions this year despite the volatility. We seek patient clients with long-term perspectives, and we take great care to educate them about how our highly differentiated investment process results in large tracking error when measured against the traditional EM index. A great example of such a long-term client is a Finnish pension fund that became our investor in September following four years of rigorous due diligence. Over the course of 11 in-person meetings, dozens of emails, and a research trip to Vietnam where they witnessed our company meetings first-hand, this sophisticated investor has learned our process inside and out and will surely be with us for the long haul.

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