The Frontier Markets Closed-End Fund (CEF) Strategy seeks to provide long-term capital growth via stock selection and active country allocation. We believe that funds offer an efficient way to invest in Frontier markets. We specialize in identifying and capitalizing on discount movements and pricing anomalies to seek to provide above average, long-term outperformance versus the appropriate benchmark while maintaining a lower level of volatility than the benchmark.
Performance results reflect the reinvestment of dividends and other earnings. Returns are net of fees and are based on an investment management fee of 1.25% per annum. Past performance is no guarantee of future results. Periods over one year are annualized.
*Composite Description: The Frontier Markets Composite was created in July 2005, and is an international equity composite focused on frontier countries, managed by City of London Investment Management. The strategy strives to outperform the S&P Extended Frontier 150 Net Total Return Index with controlled risk. It utilizes fundamental investment principles and quantitative approaches to provide broad frontier market equity exposure. It uses both top-down and bottom-up valuation methodologies to value asset classes, countries, sectors, securities and both closed-end and open-end funds to determine investment opportunities. The strategy has a value and growth approach to investment. The composite is managed to the S&P Extended Frontier 150 Net Total Return Index. As of June 2013, City of London switched to the net total return series of the S&P Extended Frontier 150 Index (from the gross total return series). Net total return indices reinvest dividends after the deduction of withholding taxes and provide a better comparison with the performance of the Composite.
**Index Description: The S&P Extended Frontier 150 Index consists of 150 of the largest and most liquid stocks from frontier markets. The index is designed to be a diversified, yet investable portfolio of frontier market stocks. As of 31 December 2023, the S&P Extended Frontier 150 Index includes 33 markets.
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The portfolio’s investment objective is to achieve long-term capital growth. The portfolio will invest primarily in listed closed-end funds (“CEFs”) that invest in securities providing exposure to frontier markets. Emerging securities markets tend to be smaller, less liquid and more volatile than the major securities markets in the United States. There is less publicly available information about the issuers in emerging markets than is regularly published by issuers in the United States. Also, there is generally less government supervision and regulation of exchanges, brokers and issuers in emerging markets than there is in the United States. The legal infrastructure and accounting, auditing and reporting standards in certain emerging markets in which the portfolio invests do not provide the same degree of investor protection or information to investors as would generally apply in more developed countries. The portfolio could be adversely affected by delays in or a refusal to grant any required government approval or by the lack of availability of foreign exchange. The portfolio will be subject to the risks of government control, political instability and social unrest with respect to its investments in emerging markets that could, in turn, have an adverse effect on the portfolio’s operations and performance. Frontier markets are subject to the same risks as emerging markets, but such risks tend to be more acute, generally as a result of the smaller capitalization of such markets and being the least developed of emerging markets.
Source: City of London Investment Management, S&P
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