AFRICAN EQUITY FUNDS
NEPTUNE AFRICA FUND
Launched less than a month ago, this open-ended offering from Neptune Investment Management is managed by South Africa-based Shelley Kuhn. It aims to generate capital growth by investing mainly in companies in Africa or companies transacting a significant proportion of their business on the African continent; it will comprise up to 50 stocks. Although the fund is able to invest across the whole continent, at least half will be invested in South African equities, in theory to minimise the volatility and enhance the liquidity of the fund. Besides South Africa, larger weightings are expected in Nigeria, Egypt and Kenya. There is an initial charge of 5 per cent and the annual management fee totals 1.85 per cent. For institutional investors with a minimum investment of £10m, the annual fee is 1.35 per cent.
JULIUS BAER EF NORTHERN AFRICA
This Luxembourg-domiciled Sicav was launched in September 2007 and focuses exclusively on North African companies. It combines a bottom up stock selection process and a top-down country and sector analysis. The fund is a blend of growth and value and is designed to be high risk and suitable for long-term investors so those who do not want to accept this level of risk and volatility should look elsewhere. Its biggest weighting is to Egypt (37.8 per cent) followed by Sub-Saharan Africa (24.9 per cent). A third of the portfolio is exposed to financial stocks and materials account for 27 per cent. Cash currently makes up 3.8 per cent of the holdings. It has a total expense ratio of 2.51 per cent and a management fee of 1.6 per cent. Year-to-date, the fund has gained 20.33 per cent.
JP MORGAN AFRICA EQUITY FUND
Launched in May 2008, this Luxembourg Sicav is managed by Sonal Pandit and Oleg Biryulyov and has $252.4m in assets. It aims to provide long-term capital growth by investing in a portfolio of African companies. It has outperformed the benchmark (MSCI Emerging and Frontier Markets Africa Index) since June 2009 but in the last three months has underperformed. Although the fund has nearly 40 per cent of its assets in South Africa, the benchmark has 87 per cent. It is overweight both Nigeria and Egypt. Although four of the five biggest holdings are financials or telecoms, it is underweight both these sectors and is overweight consumer staples and discretionary. The initial charge is 5 per cent and the annual fee is 1.5 per cent. But when the fund return exceeds the benchmark return, there is a performance fee of 10 per cent.