The Evli Emerging Frontier fund was launched on October 8, 2013. The fund’s target is to find great companies at a good value, and we have added 17 names to the portfolio so far.

 

Talking about a seven-week track record can be about as informative as reading with your eyes closed, but we hope this first monthly glimpse provides a feel about the portfolio structure. While the strategy does not have an official benchmark index, the fund has been at par with the MSCI Frontier Emerging Index, the closest (imperfect) match. The portfolio was affected by volatility in some shares in the first few weeks of the fund’s life. Typhoon Haiyan passed right over one of the power plants of our holding in the Philippines. In Thailand, on the other hand, mass protests shook the market, and with it the high-beta IT company that we invested in; we partially chose it for the ongoing expansion into Myanmar. We believe the fundamentals of these companies are still in place, and we expect a gradual recovery. In contrast, our Malaysian consumer plays performed nicely over the period, and we project our Kenyan supermarket chain to grow well alongside its market.

 

The team is currently looking at companies in the Middle East and will also be munching on malaria pills and racking up some frequent flyer miles in Africa. We will be visiting telecoms, fertilizer companies, schools, and food producers in several countries. Hidden gems tend to be located under seemingly insignificant rocks, and we will be looking underneath several in the coming weeks and months.