Is Africa the Final Frontier for Value Investors?
NEW YORK (TheStreet) -- It's well-known that Africa has a bounty of natural resources and raw materials, which makes it attractive to countries throughout the developed world. Asia, especially China, and the U.K., among others, have been investing heavily in the continent.
China and others are making deals for raw materials and investing in infrastructure to gain access to those goods. This is putting people to work and improving the quality of life for many countries in the continent.
Africa stocks, and most of the frontier markets, did well in 2013, but have sold off so far this year. Value investor Larry Seruma, chief investment officer of Nile Capital Management and portfolio manager of the Nile Pan-Africa Fund (NAFAX), remains optimistic, though. He chats with TheStreet's editor Cherella Cox in the video above. The continent also has impressive economic strength, Seruma shares.
On Thursday, March 20, the Nile Pan-Africa Fund won the Lipper 2014 award for best Emerging Markets Fund, based on its three-year performance ended December 31, 2013. Nile has returned on average annual of 12.77% since inception, April 2010.
Launched in April 2010, this small mutual fund, with assets of $43.0 million, beat out 334 other Emerging Markets funds. The fund launched A and C class shares in April of 2010. Its I class, (NAFIX), was first offered in November 2010.NAFAX closed Thursday at $14.11, down 18 cents, or 1.26%. To get in, it will cost $1,000 for an initial investment in class A (NAFAX) shares and $250,000 for Institutional Class shares. As with all speculative areas, investors are encouraged to do their research and contact the Princeton-based firm for a prospectus. For more details, check out the company's site.
Seruma's fund, which is a "go anywhere in Africa" fund, currently has 57% of its portfolio in Nigeria and South Africa. In addition, about 60% of the fund's portfolio is in small and micro-caps. It holds a mixture of local stocks, stocks listed on the U.K. and Canadian exchanges, and ADRs, including MTN Group Limited (MTNOY):OTC ADR, which last traded at $19.92 and has a 36 billion market cap and Old Mutual plc (ODMUF):OTC ADR, which closed Friday at $3.25 and has a 14.8 billion market cap.
Check out the videos in this two-part series to find out why Larry Seruma is so positive on frontier stocks. The second video in this series, on Monday, features Seruma's outlook for investors in the continent.
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