AFC Uzbekistan Fund (non-US) factsheet February 2021
1. AFC UZBEKISTAN FUND (NON-US) February 2021
Fund Category Uzbekistan Public Equities
Country Focus Uzbekistan/Kyrgyzstan
Subscriptions
Monthly at NAV (five
business days before
month end)
Redemptions
Monthly at NAV
90 days notice
Fund Manager Thomas Hugger
Chief Investment
Officer
Scott Osheroff
Investment
Manager
Asia Frontier Investments
Limited, Hong Kong
Fund Base
Currency
USD
Minimum
Investment
USD 10,000
Subsequent
Investments
USD 1,000
Management Fee 2% p.a. of NAV
Performance Fee
20% p.a. of NAV
appreciation with high
watermark
Fund Size USD 9.4 million
Fund Domicile Cayman Islands
Launch Date 29 March 2019
Custodian
Uzbekistan Central
Securities Depository
Auditor EY, Hong Kong
Administrator
Trident Fund Services,
Hong Kong
Legal Advisor Ogier, Hong Kong
Investment Objective
Achieve long-term capital appreciation by investing in listed equities of
companies that have their principal business activities in Uzbekistan and
Kyrgyzstan. The fund focuses primarily on investments in industrial,
manufacturing, financials and consumer-related stocks.
Fund Manager Comment
The AFC Uzbekistan Fund (Non-US) Class F shares returned +11.8% in
February with a NAV of USD 1,537.27, a new all-time high, bringing the return
since inception (29th
March 2019) to +53.7%, while the year-to-date return
stands at +14.6%. On an annualized basis, the fund returned +25.1% with a
Sharpe ratio of 1.70.
The stock market “ignites”!
During February, we saw broad price appreciation across the equity market as
communications with several local brokers has indicated that several hundred
thousand dollars have come into the market from investors throughout Canada,
Europe, Russia and the USA over the last few months and whose monies are
now actively being put to work. We knew this day would come sooner or later,
and it remains very early days in our view, that foreign investors would realize
the immense combination of value and growth on offer in the listed equity
market in a country whose macro-economic indicators are highly sound, thus
creating a proverbial feeding frenzy for equities. We further knew that in order
to benefit from this that we needed to launch the AFC Uzbekistan Fund when it
was still taboo to be investing in the country and when several-hundred-
thousand-dollar blocks of stock were still available at rock-bottom prices. In
preparation for the launch of the AFC Uzbekistan Fund, we shared our marketing
materials with hundreds of potential investors around the world, many of whom
told us that we are crazy for investing in such a country; ironically this broad-
based pessimism at the time of investing into Uzbekistan is exactly why the
opportunity was, and remains so attractive. As we often say to local and foreign
investors, when Starbucks Coffee outlets finally open in the second-tier cities
(Starbucks was slated to enter Uzbekistan prior to COVID-19), the "easy money"
will have already been made; in this case, we should have many years of positive
macro and micro tailwinds on our side.
At the end of February 2021, the fund was invested in 28 names and held 12.0%
in cash. The markets with the largest asset allocation were Uzbekistan (87.1%)
and Kyrgyzstan (0.9%). The sectors with the largest allocation of assets were
materials (53.2%) and financials (16.1%). The fund's estimated weighted
harmonic average trailing 12 months P/E ratio (only companies with profit) was
4.97x, the estimated weighted harmonic average P/B ratio was 1.15x, and the
estimated weighted average portfolio dividend yield was 7.81%.
1,537
700
800
900
1,000
1,100
1,200
1,300
1,400
1,500
1,600
1,700
1,800
1,900
Fund Performance (Net)
AFC Uzbekistan Fund USD (Net) TSE Index (normalized, in USD)
Contact Information
Asia Frontier Capital Ltd.
www.asiafrontiercapital.com
Mr. Thomas Hugger
CEO, Asia Frontier Investments Limited
Tel: +852 3904 1015, Fax: +852 3904 1017
th@asiafrontiercapital.com
Mr. Peter de Vries
Marketing Director,
Asia Frontier Investments Limited
Tel: +852 3904 1079, Fax: +852 3904 1017
pdv@asiafrontiercapital.com
Registered Office:
c/o Intertrust Corporate Services (Cayman)
Limited
One Nexus Way, Camana Bay
Grand Cayman, KY1-9005, Cayman Islands
Hong Kong Office:
Asia Frontier Investments Limited
905, 9th
Floor, Loon Kee Building
267-275 Des Voeux Road Central
Hong Kong