09
Magna Africa Fund
Commentary
September 2015
Volatility continued to reign during the month of September, with emerging markets feeling the greatest
pressure. The US Federal Reserve’s decision to keep interest rates on hold means that uncertainty remains as
to how global flows will react once rate increases begin, and currency pressures remain elevated. The rand
lost a further 4% against the euro, but the Fund nevertheless delivered a marginally positive return.
The Magna Africa Fund seeks to achieve capital
growth by investing in a diversified portfolio of African
Securities.
The Magna Africa Fund is a sub-fund of the Magna
Umbrella Fund plc.
Key Characteristics
Shareholdings in recently listed Edita and Integrated Diagnostics Holdings in Egypt rebounded from a poor
August to drive returns in September. Both stocks have relatively low liquidity, so prices can be distorted on
low volumes. Both are core holdings for the Fund, so we will have to accept the volatility and will not try to be
too smart in trading the names. Other Egyptian names also showed some recovery in the month, after a very
difficult year. We met a number of management teams at a conference, and overall levels of business
confidence remain high. There is understandably some uncertainty around the exchange rate which continues
to be tightly managed by the central bank, but overall the mood remains positive.
Nigerian and Kenyan holdings in the portfolio did relatively well in the month, with for example Equity Bank in
Kenya and Zenith Bank in Nigeria both up 12%, while Nigerian Breweries bounced 23%. We had added to our
Kenyan holdings in recent months, and believe the outlook is favourable, notwithstanding unforecastable risks
relating to security and the weather. The Central Bank of Nigeria continues to hold the naira at an elevated
level, and the country’s expulsion from the JP Morgan Emerging Market Bond Index hurts sentiment. We
continue to believe a currency adjustment will be necessary, though the timing of this is uncertain.
In South Africa we added to our small holdings in retailer Mr Price and bank FirstRand – both high quality
franchises that have come under pressure. We added to Mr Price on the back of a share price correction
following a disappointing sales update as we believe they will still be able to maintain margins given the
excellent cost focus. Holdsport, a specialist sporting and outdoor goods retailer we have held since IPO,
gained 4% in the month following a strong trading update, with interim results due this month.
30 ~ 60 Holdings
Stockpicking focus
Pan African approach
We believe the portfolio is well positioned for an upturn in sentiment, with quality companies at low valuations.
Fund Facts
Structure
Domicile
Registrations
Launch Date
Income
Daily Dealing
Dealing Cut-off
Number of Holdings
Cash Weight
Volatility
Active Money
Information Ratio
Beta
Fund Size
Portfolio Advisors
UCITS
Ireland
AT CH DE DK ES FI FR GB IE IT
LU NL SE SG
23 Mar 2007
Accumulated
12 noon (Dublin time)
T-1
51
2.6%
13.7% (ex-post)
59.3%
-0.34
1.04 (ex-post)
EUR 19.0m
Sharat Dua and team
Gross EUR Performance
160
60%
140
40%
120
20%
100
0%
80
-20%
60
-40%
40
-60%
Jan
2007
Jan
2008
Jan
2009
Jan
2010
Jan
2011
Open Share Classes
A Shares
C Shares
G Shares
R Shares
GBP
USD
11.716
7.960
7.133
10.790
Source: Charlemagne Capital
All data as at 30 Sep 2015
Jan
2014
Jan
2015
Rebased to 30 Mar 2007 = 100
1 Month
3 Months
From 31 Dec 2014
1 Year
EUR
8.938
10.485
10.777
9.657
Jan
2013
2008
2009
2010
2011
2012
2013
2014
Magna Africa Composite
Period to 30 Sep 2015
NAV Data
Jan
2012
Composite
Index
0.3%
-15.9%
-3.9%
-8.8%
-0.8%
-13.6%
-7.6%
-9.8%
2.5%
0.9%
0.8%
2.6%
3.9%
4.9%
Annualized data:
3 Years
5 Years
Since inception (30 Mar 2007)
Magna Africa Composite
Calendar Year
2014
2013
2012
2011
2010
2009
2008
2007 from 30 Mar
Composite
Index
8.3%
1.6%
20.1%
-29.5%
44.4%
57.4%
-56.1%
19.2%
13.7%
1.4%
27.7%
-22.1%
41.7%
48.5%
-35.0%
3.9%
The Magna Africa Composite is based on all share classes of the Magna Africa Fund. Composite performance figures are shown gross, ie before
fees, in EUR. The Magna Africa Fund is not managed against a benchmark. Performance figures are annualized for periods in excess of one
year. Charlemagne Capital claims compliance with the Global Investment Performance Standards (GIPS®), as verified for the period 1 Jun 2000
through 31 Dec 2014 by Ashland Partners. A copy of the verification report and a presentation that adheres to GIPS standards are available
upon request to the Marketing Department.
Charlemagne Capital is an independent specialist emerging markets
investment manager. We seek to use the inefficiencies that exist in emerging
markets to generate excess returns through a disciplined and researchdriven bottom-up stockpicking process within an intelligent risk framework.
09
Magna Africa Fund
Portfolio Data as at 30 Sep 2015
Top 10 Holdings
Company Name
Country
Sector
CIB
Edita
Equity Bank
Guaranty Trust Bank
Integrated Diagnostics Holdings
Lewis Group
Life Healthcare
MTN
Naspers
The Foschini Group
Egypt
Egypt
Kenya
Nigeria
Egypt
South Africa
South Africa
South Africa
South Africa
South Africa
Financials
Consumer Staples
Financials
Financials
Health Care
Consumer Discretionary
Health Care
Telecommunication Services
Consumer Discretionary
Consumer Discretionary
In alphabetical order
Combined weight of top 10 holdings:
48%
Country Exposure
Botswana
Energy
2%
Egypt
28%
Kenya
Liberia
11%
Uganda
Others
6%
Industrials
5%
22%
Con Staples
9%
16%
Health Care
1%
South Africa
Tanzania
3%
Materials
Con Discretionary
1%
Nigeria
Saudi Arabia
Sector Exposure
10%
Financials
44%
1%
IT
2%
Telecoms
Utilities
1%
28%
1%
6%
2%
Excluding cash
Subscription Information
Source & Copyright: Citywire. Sharat Dua is AAA rated by Citywire for his
three-year risk-adjusted performance
Minimum Subscription
Additional Subscriptions
Annual Management Fee
Performance Fee
Front-end Load
WPKN Code
ISIN Code EUR
GBP
USD
Bloomberg Code
Valor Number EUR
A Shares
C Shares
G Shares
R Shares
EUR 5,000
EUR 100
1.75%
Yes
Up to 5%
A0H0MA
IE00B0TB5201
EUR 1,000,000
EUR 1,000
1.25%
Yes
Up to 5%
A0H0MB
IE00B0TB5318
IE00B63D4Q15
IE00B3TDSZ14
MAEMEAC
2400533
EUR 5,000
EUR 100
1.00%
Yes
0%
A1W8A3
IE00BFTW8X03
IE00BPFJKR33
IE00BPFJKS40
MAGAFGG
23835595
EUR 5,000
EUR 100
1.75%
Yes
Up to 5%
A1CZJD
IE00B3Q79R51
IE00B667JS76
IE00B6734N46
MAAFRRE
11378667
MAEMEAA
2535515
Performance Fees
A, C Shares: 20% over 10% hurdle with highwater mark; G, R Shares: 20% over MSCI EFM Africa Index (South Africa capped at 50%)
This document is issued by Charlemagne Capital
(UK) Limited, which is authorised and regulated by
the Financial Conduct Authority.
To receive a list of Charlemagne Capital’s composite
descriptions and/or a presentation that complies with
GIPS standards, as well as any other information,
please contact the Marketing Department.
Address: Charlemagne Capital (UK) Limited
39 St James’s Street
London SW1A 1JD
Tel:
+ 44 (0)20 7518 2100
Fax:
+ 44 (0)20 7518 2199
Email:
[email protected]
Website: www.charlemagnecapital.com
This document may not be disclosed, distributed, copied, reproduced or used (in whole or in part) for any purpose without the express written consent of
Charlemagne Capital (UK) Limited (“Charlemagne”). Charlemagne has been appointed by Magna Umbrella Fund plc (the “Company”) to procure the distribution
of its Shares. The Company is an open-ended umbrella investment company authorised by the Central Bank of Ireland as a UCITS. Charlemagne Capital (UK)
Limited is authorised and regulated by the Financial Conduct Authority (“FCA”). The Company has sought and has been granted approval by the relevant
regulatory authorities to market and distribute its Shares as appropriate in the following jurisdictions: UK; Germany; Luxembourg; Austria; *Switzerland; The
Netherlands; Denmark; Singapore; France, Finland, Sweden, Spain and Italy. In Canada, the distribution of this document and any other document relating to the
distribution or marketing of the Company (including the Prospectus relating to Company), is made and will be made only to accredited investors (as defined in
National Instrument 45-106 – Prospectus and Registration Exemptions) or pursuant to another applicable prospectus exemption. Full information on the regulatory
status and the applicable laws relating to the marketing and distribution of the Company’s Shares in the various jurisdictions in which the Company is registered
are more particularly set out in the Prospectus of the Company. The purchase of shares in the Company constitutes a high risk investment and investors may lose
a substantial portion or even all of the money they invest in the Company. Investors are advised to read the section of the Prospectus entitled “Risk Factors” prior
to investing in the Company. The information within does not constitute investment, tax, legal or other advice and is not a recommendation or an offer to sell nor a
solicitation of an offer to buy Shares in the Company, which may only be made on the basis of the Company’s Prospectus. An investor in the United Kingdom who
enters into an agreement to acquire Shares in the Company will not have the right to cancel the agreement under any cancellation rules made by the FCA.
Charlemagne reasonably believes that the information contained herein is accurate as at the date of publication but no warranty or guarantee (express or implied)
is given as to accuracy or completeness. The information and any opinions expressed herein may change at any time. The Prospectus of the Company shall not
be distributed and Shares in the Company shall not be offered, distributed or sold in any jurisdiction in which such distribution, offer or sale would be unlawful.
Prior to investing in the Company, investors are advised to contact their independent financial adviser and should read all documents relating to the Company that
may be obtained from the Administrator, the Share Distributor or the website of www.fundinfo.com. This document includes statements that are, or may be deemed
to be, “forward-looking statements”. These forward-looking statements can be identified by the use of forward-looking terminology, including the terms “believes”,
“estimates”, “anticipates”, “expects”, “intends”, “may”, “will” or “should” or, in each case, their negative or other variations or comparable terminology. These
forward looking statements include all matters that are not historical facts. They appear in a number of places throughout this document and include statements
regarding the intentions, beliefs or current expectations of Charlemagne concerning, amongst other things, the investment objectives and investment policy,
financing strategies, investment performance, results of operations, financial condition, prospects, and dividend policy of the proposed investment vehicle and the
markets in which it, and its portfolio of investments, invest and/or operate. By their nature, forward-looking statements involve risks and uncertainties because they
relate to events and depend on circumstances that may or may not occur in the future. Forward-looking statements are not guarantees of future performance. The
proposed fund’s actual investment performance, results of operations, financial condition, dividend policy and the development of its financing strategies may
differ materially from the impression created by the forward-looking statements contained in this document. There is no assurance the Company will achieve its
investment objectives or the target returns described in the document. *The prospectus for Switzerland, Key Investor Information Documents, the articles of
incorporation, the annual and semi-annual reports, as well as the list of the buying and selling transactions can be obtained free of charge from the representative
in Switzerland, Carnegie Fund Services S.A., 11, rue du Général-Dufour, 1204 Geneva, Switzerland, Tel. +41 227051177, Fax: + 41 227051179, www.carnegiefund-services.ch. The paying agent is Banque Cantonale de Genève, 17 Quai de l'Ile, 1204 Geneva, Switzerland.