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The AFC Asia Frontier Fund (AAFF) USD A-shares gained +0.9% in May 2017. The fund
underperformed the MSCI Frontier Markets Asia Net Total Return USD Index (+1.1%), the MSCI
Frontier Markets Net Total Return USD Index (+4.3%), and the MSCI World Net Total Return USD
Index, which was up +2.1%. The USD A shares achieved a NAV of USD 1,796.96 which is a new alltime
high (the previous high was in April 2017 at USD 1,780.72). The performance of the AFC Asia
Frontier Fund A-shares since inception on 31st March 2012 now stands at +79.7% versus the MSCI
Frontier Markets Asia Net Total Return USD Index, which is up +43.6%, and the MSCI Frontier
Markets Net Total Return USD Index (+40.0%) during the same time period. The fund’s annualized
performance since inception is +12.0% p.a., while its YTD performance stands at +5.4%. The broad
diversification of the fund’s portfolio has resulted in lower risk with an annualised volatility of 8.93%, a
Sharpe ratio of 1.33 and a correlation of the fund versus the MSCI World Net Total Return USD Index
of 0.33, all based on monthly observations since inception.

The best performing indexes in the AAFF universe in May were Vietnam (+2.8%), Pakistan (+2.6%),
and Sri Lanka (+1.0%). The poorest performing markets were Iraq (-7.4%) and Cambodia (-2.6%). The
top-performing portfolio stocks this month were an Iraqi junior oil exploration company which we sold
with a gain of 58.8% this month, a Vietnamese telephone equipment company (+28.6%), a Mongolian
iron ore mining company (+27.1%), and a Mongolian copper and gold mining company, which was up
+23.8%.

In May, we added to existing positions in Cambodia, Laos, Mongolia, Pakistan, Sri Lanka, and Vietnam
and reduced our exposure in Bangladeshi, Mongolian and Pakistani holdings and completely exited one
Mongolian coal company and an Iraqi junior oil exploration company. We newly added a Mongolian
junior copper and gold exploring company, a Sri Lankan construction company, a Sri Lankan consumer
goods focused holding company and a Vietnamese infrastructure company.

As of 31st May 2017, the portfolio was invested in 119 companies, 1 fund and held 7.4% in cash. The
two biggest stock positions were a pharmaceutical company in Bangladesh (8.2%) and a Pakistani
cement company (2.5%). The countries with the largest asset allocation include Vietnam (24.9%),
Pakistan (24.7%), and Bangladesh (16.2%). The sectors with the largest allocations of assets are
consumer goods (30.5%) and healthcare (15.4%). The estimated weighted average trailing portfolio P/E
ratio (only companies with profit) was 16.75x, the estimated weighted average P/B ratio was 3.10x, and
the estimated portfolio dividend yield was 3.68%.

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