The AFC Asia Frontier Fund (Non-US) (AAFF) USD A-shares decreased by −3.9% in January 2020 with a NAV of USD 1,223.47. The fund underperformed the MSCI Frontier Markets Asia Net Total Return USD Index (−3.3%), the AFC Frontier Asia Adjusted Index (+0.3%), the MSCI Frontier Markets Net Total Return USD Index (-0.1%), and the MSCI World Net Total Return USD Index (-0.6%). The performance of the AFC Asia Frontier Fund A-shares since inception on 31st March 2012 now stands at +22.4% versus the AFC Frontier Asia Adjusted Index, which is up by +9.1% during the same time period. The fund’s annualized performance since inception is +2.6%. The broad diversification of the fund’s portfolio has resulted in lower risk with an annualised volatility of 8.90%, a Sharpe ratio of 0.21 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 January were Pakistan (+2.2%) and Kyrgyzstan (+1.6%). The poorest performing markets were Iraq (−4.7%) and Mongolia (−4.0%). The top-performing portfolio stocks this month were a Mongolian junior gold mining company (+28.6%), a Mongolian real estate company (+15.2%), a Mongolian coal miner (+14.4%), a Mongolian trading company (+14.2%), and a Pakistani cement company (+11.3%).

In January, price weakness in a Vietnamese beer producer gave the fund an opportunity to initiate a position in this company. During the month, the fund also partially exited one Mongolian and one Vietnamese holding and added to existing holdings in Mongolia and Vietnam.

At the end of January 2020, the portfolio was invested in 77 companies, 2 funds and held 3.2% in cash. The two biggest stock positions were a pharmaceutical company in Bangladesh (9.5%) and a pump manufacturer from Vietnam (8.4%). The countries with the largest asset allocation were Vietnam (23.0%), Mongolia (17.6%), and Bangladesh (16.6%). The sectors with the largest allocation of assets were consumer goods (25.2%) and industrials (17.9%). The fund’s estimated weighted harmonic average trailing 12 months P/E ratio (only companies with profit) was 8.10x, the estimated weighted harmonic average P/B ratio was 0.76x and the estimated weighted average portfolio dividend yield was 3.87%.

The AFC Asia Frontier Fund (Non-US) (AAFF) USD A-shares decreased by −2.8% in February 2020 with a NAV of USD 1,188.99. The fund outperformed the AFC Frontier Asia Adjusted Index (−7.9%), the MSCI Frontier Markets Asia Net Total Return USD Index (−6.7%), the MSCI Frontier Markets Net Total Return USD Index (−5.9%), and the MSCI World Net Total Return USD Index (−8.5%). The performance of the AFC Asia Frontier Fund A-shares since inception on 31st March 2012 now stands at +18.9% versus the AFC Frontier Asia Adjusted Index, which is up by +0.5% during the same time period. The fund’s annualized performance since inception is +2.2%. The broad diversification of the fund’s portfolio has resulted in lower risk with an annualised volatility of 8.92%, a Sharpe ratio of 0.17 and a correlation of the fund versus the MSCI World Net Total Return USD Index of 0.35, all based on monthly observations since inception.

The best performing indexes in the AAFF universe in February were Mongolia (+1.0%) and Bangladesh (+0.2%). The poorest performing markets were Cambodia (−15.2%) and Pakistan (−8.8%). The top-performing portfolio stocks this month were a Mongolian leather company (+31.5%), a Mongolian tour operator (+30.0%), a Mongolian concrete company (+23.3%), a Mongolian gold explorer (+14.7%), and a Vietnamese construction company (+11.8%).

In February, the fund exited one Bangladeshi holding and partially exited one Kazakh holding and two Mongolian and Vietnamese holdings respectively and added to existing holdings in Mongolia and Vietnam.

At the end of February 2020, the portfolio was invested in 76 companies, 2 funds and held 4.8% in cash. The two biggest stock positions were a pump manufacturer from Vietnam (9.7%), and a pharmaceutical company in Bangladesh (9.3%). The countries with the largest asset allocation were Vietnam (22.7%), Mongolia (17.9%), and Bangladesh (15.3%). The sectors with the largest allocation of assets were consumer goods (24.5%) and industrials (18.7%). The fund’s estimated weighted harmonic average trailing 12 months P/E ratio (only companies with profit) was 8.18x, the estimated weighted harmonic average P/B ratio was 0.73x and the estimated weighted average portfolio dividend yield was 3.94%.

The AFC Asia Frontier Fund (Non-US) (AAFF) USD A-shares decreased by 14.2% in March 2020 with a NAV of USD 1,019.61. The fund outperformed the AFC Frontier Asia Adjusted Index (−26.2%), the MSCI Frontier Markets Asia Net Total Return USD Index (−22.3%), and the MSCI Frontier Markets Net Total Return USD Index (−22.0%) but underperformed the MSCI World Net Total Return USD Index (−13.2%). The performance of the AFC Asia Frontier Fund A-shares since inception on 31st March 2012 now stands at +2.0% versus the AFC Frontier Asia Adjusted Index, which is down by 25.8% during the same time period. The broad diversification of the fund’s portfolio has resulted in lower risk with an annualised volatility of 10.23% and a correlation of the fund versus the MSCI World Net Total Return USD Index of 0.47, all based on monthly observations since inception.

The best performing indexes in the AAFF universe in March were Kazakhstan (+0.1%) and Iraq (−6.4%). The poorest performing markets were Vietnam (−24.9%) and Pakistan (−23.0%). The top-performing portfolio stocks this month were a Vietnamese telecom equipment company (+15.2%), a Mongolian energy company (+14.5%), a Mongolian iron ore company (+13.6%), a Mongolian construction company (+7.0%), and a Mongolian internet company (+4.9%).

In March, the fund reduced holdings in Mongolia and Vietnam and added to existing holdings in Mongolia and Vietnam.

At the end of March 2020, the portfolio was invested in 75 companies, 2 funds and held 4.6% in cash. The two biggest stock positions were a pump manufacturer from Vietnam (10.5%), and a pharmaceutical company in Bangladesh (8.3%). The countries with the largest asset allocation were Vietnam (21.6%), Mongolia (18.2%), and Bangladesh (14.7%). The sectors with the largest allocation of assets were consumer goods (24.5%) and industrials (17.1%). The fund’s estimated weighted harmonic average trailing 12 months P/E ratio (only companies with profit) was 7.80x, the estimated weighted harmonic average P/B ratio was 0.72x and the estimated weighted average portfolio dividend yield was 3.75%.

Sources: Bloomberg, Asia Frontier Capital