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Looking for an Africa focused IT (or ETF)

Closed-end funds and OEICs
Steveam
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Looking for an Africa focused IT (or ETF)

#104412

Postby Steveam » December 15th, 2017, 4:47 pm

I've been diversifying a formerly UK high yield portfolio to having a better geographic spread.

A current estimate puts me at 35% UK, 25% Asia pacific, 40% RoW (mainly USA/Europe) - these are estimates for where earnings are generated rather than where they are listed. I'm gradually reducing the UK and do have some large holdings in world trackers (a mix of ETFs and ITs) and some more focused ETFs and ITs).

I'm not aiming to just have a world tracker as I think markets do become over/under valued (think Japan in the past and possibly the US today) and am willing to take small side bets or biases towards markets or managers I like. A sort of hub and spoke approach to portfolio diversification.

I'd like to invest in the emerging markets in Africa. Do any of you have suggestions for how to get a handle on Africa? (Yes, I do realise Africa is a big and diverse place!)

Any thoughts will be much appreciated.

Steve

Lootman
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Re: Looking for an Africa focused IT (or ETF)

#104414

Postby Lootman » December 15th, 2017, 4:54 pm

A cap-weighted Africa ETF would have a huge weighting in South Africa, which may or may not be what you want. And a concentration in natural resources:

http://etfdb.com/type/region/africa/

Looking at other types of funds there are a few other choices:

https://seekingalpha.com/article/103806 ... s-and-etfs

There are also some funds that focus on Africa and the Middle East, and for that matter so-called Frontier Markets funds have decent weightings in those areas.

richfool
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Re: Looking for an Africa focused IT (or ETF)

#104457

Postby richfool » December 15th, 2017, 11:04 pm

Steveam wrote:I've been diversifying a formerly UK high yield portfolio to having a better geographic spread.

A current estimate puts me at 35% UK, 25% Asia pacific, 40% RoW (mainly USA/Europe) - these are estimates for where earnings are generated rather than where they are listed. I'm gradually reducing the UK and do have some large holdings in world trackers (a mix of ETFs and ITs) and some more focused ETFs and ITs).

I'm not aiming to just have a world tracker as I think markets do become over/under valued (think Japan in the past and possibly the US today) and am willing to take small side bets or biases towards markets or managers I like. A sort of hub and spoke approach to portfolio diversification.

I'd like to invest in the emerging markets in Africa. Do any of you have suggestions for how to get a handle on Africa? (Yes, I do realise Africa is a big and diverse place!)

Any thoughts will be much appreciated.

Steve

Steve, there are a couple of Frontier Markets IT's tucked in amongst the Emerging Markets sector on Citywire, namely:-

Blackrock Frontiers (BRFI) - Africa (sub Sahara) 14% and
Aberdeen Frontier Markets (AFMC) - Africa (sub Sahara) 28%

The latter gives most exposure to Africa.

EM Sector and performance tables:
http://citywire.co.uk/money/investment- ... ePeriod=12

BRFI:
http://citywire.co.uk/money/investment- ... undID=3505
and
AFMC:
http://citywire.co.uk/money/investment- ... undID=3497

Bluestone77
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Re: Looking for an Africa focused IT (or ETF)

#104475

Postby Bluestone77 » December 16th, 2017, 9:30 am

Careful what you wish for. Who else here remembers the New Star Africa fund?

Another fund to probably avoid is the Africa Opportunity Fund (AOF).
Whilst it may do what you want and is listed on the London Stock Exchange, the reasons IMHO to avoid are:
1. Domiciled in the Cayman Islands.
2. Charges are 2% plus 20% of the gain over US LIBOR.
3. Performance has been poor. Although charges must be a huge drag on returns.

ModernMicawber
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Re: Looking for an Africa focused IT (or ETF)

#107813

Postby ModernMicawber » January 4th, 2018, 9:01 am

As it happens, I'm an "old Africa hand", and I'd agree that the potential is undeniable, but sad to say, I fear I may not live to see sub-Saharan Africa emerge from "hell in a handcart" investment status.

I do remember the New Star Africa fund, and remember that something went spectacularly wrong, but don't remember exactly what it was. Fortunately, I was too busy HYPing to pay attention to what was going on in the managed fund world.

Your question did prompt a bit of research on my part though, in the spirit of "if the place is going to hell, open a handcart shop".

One option might be Atlas Mara, the bank holding company run by Bob Diamond. There's also a Toronto-listed fund (of the 2 & 20 variety) called Fairfax Africa Holdings, which holds a big chunk of said bank, as well as an assortment of other stuff.

Either of these might provide the exposure, if not the outcome, you are looking for.

GJHarney
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Re: Looking for an Africa focused IT (or ETF)

#107856

Postby GJHarney » January 4th, 2018, 11:27 am

FredBloggs wrote:http://www.thisismoney.co.uk/money/investing/article-1648976/New-Star-suspends-dealing-in-Africa-fund.html
Then this happened -
http://www.thisismoney.co.uk/money/investing/article-1663665/New-Star-to-wind-up-Heart-of-Africa-fund.html
Does anyone also remember how our "friends" at Hargreaves Lansdown pushed this at people? I am guessing a lot of people new to "investing" took HL at their word and lost a lot of money in New Star Africa. Me? Anything that Mr Duffield touches, I'd steer well clear of.


And the recent post Rowland history of Lonrho is another call for caution - https://www.ft.com/content/99719ddc-bd38-11e2-a735-00144feab7de

Overviews of more recent options -
http://www.telegraph.co.uk/finance/personalfinance/investing/funds/10980273/How-should-I-go-about-investing-in-Africa.html

http://www.thisismoney.co.uk/money/diyinvesting/article-4086932/INVESTMENT-CLINIC-invest-sub-Saharan-Africa.html


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