“The greater the obstacle, the more glory in overcoming it.”

– Jean Baptiste Poquelin "Moliere", French playwright, actor, and poet.

AFC Funds Performance Summary

Correction Provides an Opportunity for Long Term Investors in Asian Frontier Markets

Global stock markets witnessed a correction in October due to ongoing tensions in the Middle East. Though we are not experts on the Middle East, we definitely are contrarians and can confidently say that this correction is a good opportunity for investors to add allocation or invest in Asian frontier markets because:

• Many of the countries in our universe, like Pakistan and Sri Lanka, are already past the worst in their macro-economic environments and are in a better position to handle any commodity price shock since these countries have raised interest rates aggressively in the past year, reduced or removed fuel subsidies, increased taxes, and are seeing an incremental improvement in their foreign exchange reserve positions. In other words, their economies have bottomed out or are close to bottoming out.
   
• Central Asian frontier countries are already in a solid macro-economic position, and the companies our funds are holding in these countries are showing robust earnings growth. Our Central Asian universe of Georgia, Kazakhstan, and Uzbekistan is one of the few pockets globally where earnings growth has seen continued momentum in 2023. 
   
• Vietnam has also seen a heavy correction in the past two months, which has made valuations for the VN-Index in Vietnam very attractive relative to history, given the strong structural economic growth story in Vietnam.
   
• More broadly, valuations in Asian frontier markets remain very attractive, with our AFC Asia Frontier Fund continuing to trade at its all-time low P/E ratio of 6.9x even though performance in 2023 for the AFC Asia Frontier Fund has been very strong against global markets.

The AFC Asia Frontier Fund Continues to Significantly Outperform Global Benchmark Indexes (Year to Date USD Total Returns)

The AFC Asia Frontier Fund Trades at its All-Time Low P/E Ratio Despite a Strong Performance in 2023

The Recent Correction in Vietnam is Providing an Opening for Long Term Investors with the VN-Index P/E Ratio Trading at a Large Discount to History

AFC Webinar Held on 25^th October 2023 

Many of the above topics were discussed in our AFC Quarterly Webinar, which was held on Wednesday, 25^th October 2023 and was well attended by existing and prospective investors who posed interesting questions. Click on the link below to view the webinar recording or the webinar slide deck.

2024 Uzbekistan Investor Tour

By popular demand we are planning our third AFC Uzbekistan Tour, which will be held from Sunday 19^th May 2024 to Tuesday 21^st May 2024. We will begin on the 19^th with a day tour of Tashkent, followed by company meetings and site visits on the 20^th and 21^st. If you are interested in joining, please write us at This email address is being protected from spambots. You need JavaScript enabled to view it. .

BarclayHedge Awards

I am pleased to let you know that BarclayHedge has awarded us for fund performance once again and this time, our AFC Asia Frontier Fund was awarded for its performance for a second month in a row. This time, the fund was recognised with the top 10 awards in the categories “Emerging Markets – Asia” and “Emerging Markets Equity – Asia” for its performance in September 2023 following on from the strong performance in August 2023. These awards show the validity of the investment thesis of the AFC Asia Frontier Fund and underscore its suitability as a diversification tool for equity investors.

AFC now on Instagram

To provide investors and friends of AFC with relevant information about our funds and Asian Frontier Markets, we have started our very own Instagram channels. You can follow us here:

November Subscription Cut-off Date

The next cut-off date for subscriptions for our funds will be 24^th November 2023. If you would like to know more about the subscription process, please get in touch with us at This email address is being protected from spambots. You need JavaScript enabled to view it. 

Please find below the managers’ comments on each of our four funds for October 2023.

AFC in the Press

Upcoming AFC Travel

Thomas Hugger, Ruchir Desai, and Peter de Vries are based in Hong Kong, while Andreas Vogelsanger is based in Bangkok, Vicente Nguyen in Ho Chi Minh City, Scott Osheroff in Tashkent, and Ahmed Tabaqchali in London and Iraq. If you have an interest in meeting with our team at their homeports or during their travels, please contact Peter de Vries at This email address is being protected from spambots. You need JavaScript enabled to view it..

AFC Travel

AFC Uzbekistan Fund - Manager Comment

The AFC Uzbekistan Fund Class F shares returned +1.0% in October 2023 with a NAV of USD 1,785.24, bringing the return since inception (29^th March 2019) to +78.5%, while the return for the year stands at +2.8%. On an annualised basis, the fund has returned +13.5% p.a. with a Sharpe ratio of 0.84.

October saw many of the AFC Uzbekistan Fund’s holdings file third-quarter 2023 earnings, with continued impressive results. While global markets were roiled again during the month, with investors worried about the U.S. and Japanese bond markets, renewed inflation fears on rising commodity prices, and increasing global conflict, the markets in the New Fertile Crescent region, specifically in Central Asia and Uzbekistan, continue apace at their own drumbeat.

AFC Uzbekistan Fund Valuations as of 31^st October 2023:

Uzbek Companies Continue to Deliver Strong Earnings

Just as Uzbekistan’s nine-month 2023 GDP growth reached 5.8% (full year 2023 is estimated at 5.6%), Uzbek companies continued their strong growth during the third quarter, with many blue-chip companies the fund holds continuing to perform exceptionally well. As Uzbekistan’s structural consumption, manufacturing, and construction boom continues from a very low base, buttressed by a fast-growing population whose average age is just 30 years with low financial leverage, the economy is on a very good trajectory. Furthermore, inflation data for October came in at 1%, translating to +8.98% YoY, which is better than expected and certainly an improvement from the high teens inflation the country experienced upon its opening in late 2016. 

The AFC Uzbekistan Fund’s investment strategy has been to concentrate capital in the highest quality blue-chip companies which are best levered to economic growth and which will be the “go-to” investments for local and foreign investors as fresh capital enters the stock market. The strategy is paying off and below are some of the more notable earnings announcements from our top holdings, three of which are the fund’s top five holdings.

The fund’s largest position, a financial services company, had trailing twelve months EPS (ttm EPS) growth of 65% YoY, while the book value grew by 47%. Despite this impressive earnings growth, the company still trades at a very attractive P/E of 3.67x and P/B of 1.28x. Its competition, which we also own, saw EPS and book value grow 131% and 31% respectively, while trading at a P/E of 3.57x and P/B of 1.48x.

Another financial services company, the Uzbek Commodity Exchange, which we visited on our September 2023 tour (picture below), reported YoY EPS and book value growth of 15% and 11% respectively, while trading at a P/E of 6.52x and P/B of 5.45x.

Uzbek Commodity Exchange Visit

Similarly, a cement company had EPS and book value growth of 134% and 18%, trading at an attractive P/E of 3.04x and P/B of 0.45x. Furthermore, an industrial producer of white spirits which we also visited on our investor tour in September, had an EPS growth of 128% and book value growth of 48%, and is now trading at a P/E of 4.19x and a P/B of 2.98x.

A modest position for the fund which we are beginning to pay more attention to and grow its weight for the fund is a consumer goods distribution and retail business we invested into in 2018, but which subsequently had two years of poor earnings as the business had to adjust to the new floating exchange rate mechanism. However, profitability has turned around in the past three years with ttm EPS growth of 111% YoY and book value growth of 14%, while the company trades at an unsustainably cheap P/E of 1.68x and P/B of 0.33x! This company is so undervalued likely due to it trading on the OTC market and therefore not being on the radar of many investors, specifically foreigners. However, when that changes, we expect a substantial rerating, hopefully after we’ve built a larger position!

We are delighted with the continued growth in earnings across the fund’s holdings. Now, the key will be seeing increased investor participation in the market to drive “multiple expansion”. There is a new capital markets information platform hosting equity prices, financial ratios, and charts which will be launched in the near future at which time we will share more about it as it will provide much greater market transparency to investors and will be a valuable private sector catalyst for the development of Uzbekistan’s capital markets.

The New Fertile Crescent is Shining

Throughout October, there were many notable news bites further acknowledging the regional integration I’ve been discussing for some while in these updates. 

On October 17, Russian Prime Minister Mikhail Mishustin approved a list of 25 countries whose citizens will be able to undergo remote identification to conduct financial transactions in Russia. The list includes Uzbekistan, Kazakhstan, Kyrgyzstan, Tajikistan, Belarus, Azerbaijan, Armenia, Moldova, as well as several other countries and is in line with our focus on regional integration. Russia’s economy is doing just fine and sanctions have largely been ineffective as the country has plenty of trading partners for its services and natural resources. Therefore, enabling Uzbeks, among others, to more easily bank in Russia is a net positive, especially as Uzbek remittances from Russia are Uzbekistan’s largest source of remittances, and Russia remains a key investor in Uzbekistan.

Furthermore, as Iran plans to develop a transit corridor through Central Asia to Uzbekistan, the two governments have been discussing eliminating visa requirements between the two countries as business picks up between the two countries with Iranian exporters of consumer goods, steel, cement, and other products expand into the region, as well as tourism of course.

Finally, on 29^th and 30^th October, Uzbekistan’s Deputy Prime Minister Jamshid Khojaev visited Kabul/Afghanistan for negotiations on bilateral trade, where a roadmap was outlined for trade to increase to USD 3 bn per year, up from USD 760 mn in 2022. During this visit, the Afghan government gave reassurances to the Uzbek side that the development of the Qosh Tepa canal, which will divert water from the Amu Daryo River to irrigate northern Afghanistan (a plan originally drafted by USAID when Afghanistan was under U.S. occupation), would not have detrimental effects on Uzbekistan’s water supply.

Third AFC Uzbekistan Tour

For those interested in visiting Uzbekistan with us, we are planning our third AFC Uzbekistan Tour, which will be held from Sunday 19^th May 2024 to Tuesday 21^st May 2024. We will begin on the 19^th with a day tour of Tashkent, followed by company meetings and site visits on the 20^th and 21^st. If you are interested in joining, please write us at This email address is being protected from spambots. You need JavaScript enabled to view it. .

At the end of October 2023, the fund was invested in 24 names and held 6.8% cash. The portfolio was allocated to Uzbekistan (93.15%) and Kyrgyzstan (0.04%). The sectors with the largest allocation of assets were financials (41.3%) and materials (34.1%). The fund's estimated weighted harmonic average trailing 12 months P/E ratio (only companies with profit) was 4.80x, the estimated weighted harmonic average P/B ratio was 0.97x, and the estimated weighted average portfolio dividend yield was 3.35%.

AFC Iraq Fund - Manager Comment

The AFC Iraq Fund Class D shares returned −1.4% in October 2023 with a NAV of USD 1,276.93 versus its benchmark, the Rabee Securities US Dollar Equity Index (RSISUSD index), which lost 3.4% during the month. For the year, the AFC Iraq Fund is up 87.8%, outperforming the index’s increase of 73.3%. Since inception, the fund has gained 27.7% while the RSISUSD index is down 9.0%, an outperformance of 36.7%.

After a scorching four-month run in which the RSISX USD Index was up 43.7%, the market was ready for a pull-back. However, when it came, the pullback was both short and shallow. Average daily volume for the month was down by 22.2% versus that of the prior four months, while the market was in a range of up 2.0% to down 4.3%, with the declines driven by buyers holding back on chasing stocks as in the prior months. These muted activities were reversed on the last day of October, with the banking sector resuming its momentum, which continued into the first few days of following month. By the end of the fourth trading day of November, the market had erased its October losses and is now higher than September’s close (chart below). While a few days do not make a month, the return of the banking sector’s momentum and market leadership supports the AFC Iraq Fund’s investment thesis for the banking sector and the recent fundamental developments that gave it a boost, as discussed in “Banks to Fuel the Market’s Next Phase” – especially in the current context in which global markets are assessing the risks of a wider Middle East conflict.

Rabee Securities US Dollar Equity Index

A wider Middle East conflict that would destabilise the region with repercussions for the world economy has been the subject of intense media coverage and extensive analysis over the last few weeks (*). Consequently, the current flurry of the U.S.’ diplomatic initiatives aims to avoid such a conflict, and reinforces the ongoing behind-the-scene activities of the countries in the region, working with the main world powers in seeking to contain the conflict. It’s difficult to forecast how the ongoing Gaza invasion and conflict containment initiatives will unfold over the coming weeks, however, the contours of an emerging post-conflict world order, irrespective of its conclusion, are becoming increasingly clear. The sharply contrasting responses of the West versus those of the Global South, to the unprecedented humanitarian crisis that is unfolding in Gaza, have crystalised the divide between them that materialised post the invasion of Ukraine. This divide is solidifying an emerging unbalanced multi-polar world in which power is diffused unequally between multiple powers, as was evident from the Global South’s responses to the West’s sanctions on Russia following the invasion of Ukraine. Most notably, in the diversion of Russian oil and gas from Europe to Asia and the subsequent changed supply-demand dynamics of energy markets, with their ongoing implications for the global economy that extend far beyond these markets. 

In the meantime, oil markets, as measured by Brent crude futures contracts, are discounting elevated oil prices (yellow line-chart below) that are very close to those that they were discounting immediately following the invasion of Ukraine (red line-chart below). The key difference between the two is that the latest expectations are at the end of two weeks of back-to-back oil price declines in which oil markets have begun to discount a contained conflict, and which were reinforced by events that lowered the fears of a wider Middle East conflict. As such, there are not a great deal of supply-hit fears built into these expectations, and so they are a realistic indication of the near-term price expectations of this emerging unbalanced multi-polar world.

Market Expectations for Future Oil Prices
(as measured by Brent Futures Contacts in USD per barrel)

The current environment has implications for the risk-reward profile for investments in Iraq’s equity market. On the risk part of the equation, the potential escalation of the ongoing invasion of Gaza into a wider Middle East conflict could threaten the relative stability that has marked Iraq over the last few years, irrespective of its distance from the conflict or of the non-existent possibility that it would be drawn into it as a combatant. While on the reward part of the equation, the changed geopolitical landscape of a multi-polar world is very positive for Iraq’s economic outlook, given its extreme leverage to oil prices. Current expectations of Brent crude prices of USD 83 per barrel (/bbl) in 2024, and USD 79/bbl in 2025, would provide the government with the wherewithal to follow through with its expansionary three-year budget for 2023-25. The budget’s sizeable liquidity injections into the non-oil economy should drive economic growth that would feed into meaningful growth in corporate profits, which in turn would sustain the market's current rally, as discussed here last month. 

We continue to believe that the upside opportunity for the AFC Iraq Fund is underpinned by the expected growth in banks’ earnings driven mostly by fundamental developments while also potentially benefiting from some of the technical developments as banks increase their capital base over the next two years – both of which were discussed in detail in “Banks to Fuel the Market's Next Phase”.

At the end of October 2023, the AFC Iraq Fund was invested in 14 names and had a cash level of 9.9%. The fund invests in both local and foreign-listed companies that have the majority of their business activities in Iraq. The markets with the largest asset allocation were Iraq (88.6%), Norway (1.3%), and the UK (0.2%).

The sectors with the largest allocation of assets were financials (70.9%) and consumer staples (8.9%). The fund's estimated weighted harmonic average trailing 12 months P/E ratio (only companies with profit) was 10.31x, the estimated weighted harmonic average P/B ratio was 1.41x, and the estimated weighted average portfolio dividend yield was 3.40%. The fund’s portfolio carbon footprint is 0.08 tons per USD 1 mn invested.

 AFC Asia Frontier Fund - Manager Comment

The AFC Asia Frontier Fund (AAFF) USD A-shares returned −3.7% in October 2023 with a NAV of USD 1,403.70. The fund outperformed the MSCI Frontier Markets Asia Net Total Return USD Index (−10.8%), the MSCI Frontier Markets Net Total Return USD Index (−5.8%) and underperformed the MSCI World Net Total Return USD Index (−2.9%). The performance since inception on 30^th March 2012 now stands at +40.4% versus the benchmark, which is down by 33.6% during the same period. The broad diversification of the fund’s portfolio has resulted in lower risk with an annualised volatility of 10.6% and a correlation of the fund versus the MSCI World Net Total Return USD Index of 0.50, all based on monthly observations since inception.

After a solid run in the first three quarters of the year, fund performance pulled back in October, given the geopolitical tensions in the Middle East, which gave investors a reason to take some profits off the table. We view this as a healthy correction in fund performance. Despite this, the year-to-date performance of the AFC Asia Frontier Fund is well ahead of global benchmark indexes, which reflects the strength of the rally in Asian frontier markets in 2023 as well as our county allocation and stock selection.

The AFC Asia Frontier Fund continues to Outperform Global Benchmark Indexes by a Large Margin (USD Total Returns Year to Date)

However, in this weaker month, one standout in our universe was Pakistan, where the KSE-100 Index rallied by 12.4%, making it the best-performing market globally in October 2023. One key reason for this rally, in our view, is the anticipation of benchmark interest rates reaching their peak with the prospects of the State Bank of Pakistan beginning to ease its monetary policy in the first half of 2024 as inflation numbers cool down. The fund’s top five performing stocks this month were all from Pakistan, which reflects the increasing bullishness among domestic Pakistani investors.

Pakistan’s KSE-100 Index Market Cap (in USD terms) and P/E Ratio are at 14 Year Lows

The fund’s largest stock position, Kaspi (KSPI), the Kazakh fintech play, delivered another strong quarter with 3Q23 net profits growing by 40%. With this earnings momentum, we expect Kaspi to close the year with a strong 4Q23. The company also announced that it has applied for a listing in the U.S., and we believe that any potential listing of its shares in the U.S. will be the next trigger for its stock price to re-rate since its 2024 P/E of 8.2x is extremely attractive relative to earnings growth of greater than 20%.

Kaspi’s Stock Price Performance has Significantly Outperformed Emerging Market Tech Peers since the Fund’s Purchase

The VN-Index in Vietnam witnessed a correction of -10.9% in October. Though global geopolitical factors played a part in this weakness, we believe the market was showing its unhappiness with a poor earnings season for 3Q23, with many companies and industries not yet showing signs of an earnings recovery despite a pick-up in GDP growth. 

However, this is where stock selection plays an important role. The median net profit growth in 3Q23 for our fund’s Vietnam holdings was an impressive +27.5% YoY, with only one of our ten positions in Vietnam showing an earnings decline. The standout company in terms of quarterly results was FPT Corp. (FPT), which grew its 3Q23 revenues and net profits by +23% and +20% respectively. FPT is the fund’s largest Vietnamese position. 

Given FPT’s strong capabilities in software outsourcing and the initiatives the company is taking in developing its semiconductor and other high-tech segments, we believe FPT can potentially be one of the key beneficiaries in Vietnam as the U.S. looks to diversify its technology supply chains.

FPT’s Consistent Earnings Growth and Sound Execution have Led to an Outperformance v/s the VN-Index (since purchased by the Fund)

The best-performing indexes in the AAFF universe in October were Pakistan (+12.4%) and Mongolia (+2.1%). The poorest-performing markets were Vietnam (−10.9%) and Sri Lanka (−6.1%). The top-performing portfolio stocks this month were all from Pakistan. A mobile phone assembler and distributor (+58.9%), an aluminium can producer (+18.9%), a paint company (+17.9%), a pharmaceutical company (+14.3%) and a diversified conglomerate (+12.4%).

In October, the fund added to existing positions in Mongolia and Sri Lanka and exited a concrete producer in Mongolia, and a food and beverage company in Sri Lanka.

At the end of October 2023, the portfolio was invested in 70 companies, 2 funds and held 7.3% in cash. The two biggest stock positions were a fintech company in Kazakhstan (4.6%) and a bank in Kazakhstan (3.6%). The countries with the largest asset allocation were Iraq (20.4%), Mongolia (12.2%), and Kazakhstan (10.8%). The sectors with the largest allocation of assets were consumer goods (17.4%) and financials (13.2%). The fund's estimated weighted harmonic average trailing 12 months P/E ratio (only companies with profit) was 6.88x, the estimated weighted harmonic average P/B ratio was 1.06x, and the estimated weighted average portfolio dividend yield was 3.53%. The fund’s portfolio carbon footprint is 0.85 tons per USD 1 mn invested.

AFC Vietnam Fund - Manager Comment

The AFC Vietnam Fund returned −8.1% in October with a NAV of USD 2,937.45, bringing the year-to-date return to +1.8% and return since inception to +193.7%. The Ho Chi Minh City VN Index lost 11.9% in October 2023, lost 1.8% year to date, and is up by 73.7% since inception of the fund, in USD terms. Since inception, the fund strongly outperformed the index by 120.0%. The fund’s annualised return since inception stands at +11.6% p.a. The broad diversification of the fund’s portfolio resulted in an annualised volatility of 15.08%, a Sharpe ratio of 0.68, and a low correlation of the fund versus the MSCI World Index USD of 0.50, all based on monthly observations since inception.

In October, the Vietnamese stock market extended its correction, marking the third consecutive month of declines in 2023 after an impressive first half of the year. The VN-Index underwent a notable decrease of 12% in USD terms this month, bringing its year-to-date performance to -1.8%. The October decline was primarily driven by a substantial selloff in several key index heavyweights, particularly Vinhomes, which witnessed its index weighting drop from around 5.7% the previous month to the current 4%. This sharp descent exacerbated the existing weak market sentiment in Vietnam. Additionally, heightened geopolitical tensions and concerns among domestic retail investors led to nervous profit-taking and margin calls, contributing to the overall selling pressure.

Amidst this challenging environment, the healthcare sector was a relatively bright spot, with a modest decline of approximately 2.2%, while all other sectors faced declines ranging from 9% to 20%. Despite recent setbacks, we view this correction as a positive development, potentially paving the way for gains in the last two months of 2023 and in the year ahead.

The VN-Index Broke Below its 200-day Moving Average

Market Developments

There were two main factors contributing to the market's instability in October: namely, the ongoing conflict in the Middle East and the depreciation of the Vietnamese dong (VND).

Although Israel and Palestine are not significant trade partners for Vietnam, accounting for less than 0.5% of the nation's total trade, the concerns surrounding the rise in global oil prices triggered unease among investors, particularly local retail investors. These investors often have limited knowledge and are susceptible to media influence. Vietnamese media outlets amplified the potential impact of this conflict on the global economy, even portraying it as a protracted crisis. This, in turn, led to a degree of pessimism among Vietnamese investors. Market liquidity saw a sharp reduction to around a daily trading volume of USD 400 mn, compared to the USD 1 billion seen a few months ago. However, drawing on our decade-long experience with this market, we maintain confidence that the media’s perspective will evolve, eventually restoring investor confidence and prompting them to return to the market as usual. Thus, the reaction of local retail investors, which typically accounts for approximately 90% of daily trading volume, is expected to be a short-term phenomenon.

Another factor contributing to the benchmark's negative performance was the recent foreign exchange rate weakness. The exchange rate between the USD and the VND reached a record high of around 24,800, causing the VND to depreciate approximately 4% year-to-date against the USD. The increase in the USD's value in the global market, coupled with the US Federal Reserve's decision to maintain high interest rates to control inflation while the State Bank of Vietnam continues to reduce key rates to support economic growth, has created a substantial interest rate differential between the USD and VND. This situation has led to a surge in the USD/VND exchange rate.

VND is Amongst the Most Stable Currencies Against the USD

Given the strengthening of the USD, we regard the VND's depreciation of around 4% against the USD in 2023 as not a catastrophic development, especially compared to other currencies. In a year marked by weak global consumption, the Vietnamese government may opt for a flexible FX policy to bolster the nation's exports, rather than strengthen the local currency. When comparing the VND to most other developed market currencies, such as EUR, JPY, KRW, CNY, AUD, CAD, and other G20 currencies, a 2-4% depreciation of the VND in 2023 is quite reasonable.

As a result, we hold a strong belief that foreign exchange dynamics are not a significant long-term concern for Vietnam. Instead, the current situation is best understood as a unique set of circumstances arising from the persistent increase in the value of the USD and the broader issue of weak global consumption. In response, a flexible VND policy can serve as an advantageous tool for the Vietnamese government to support the export sector while concurrently augmenting its foreign reserves.

Vietnam Foreign Reserves (USD bn)

In line with our perspective, estimates by the International Monetary Fund (IMF) suggest that Vietnam’s foreign reserves are on a positive trajectory. These estimates indicate that by the end of 2023, Vietnam's foreign reserves are projected to reach USD 98.8 billion, with further growth anticipated to USD 110.5 billion in 2024. These forecasts underscore the nation's commitment to maintaining financial stability and resilience, enhancing its capacity to navigate economic challenges, and fostering an environment conducive to sustained growth and development.

Vietnam’s Strong Macro-Economic Numbers in 2023

It is worth noting that we view the VND's depreciation as an active policy choice driven by various factors. When considering the fundamental aspects of Vietnam's economy in 2023, there are more positive signals than negative ones. The country achieved a record-high trade surplus of USD 21.7 bn in the first 9 months of 2023. Additionally, foreign direct investment (FDI) disbursements also reached an all-time high at USD 15.9 bn. Remittances to Vietnam in 2023 exhibited substantial growth, reaching USD 14 bn. Notably, tourism has made a remarkable recovery, contributing approximately USD 10 bn to the country. Although tourism has not yet fully returned to its pre-COVID-19 levels, its significant rebound has been a valuable support to the nation's economy. According to estimates by the Vietnam Tourism Department, the number of international visitors is expected to reach an all-time high of 18 mn by 2025, further contributing to the nation's revenue.

Number of International Tourist Arrivals to Vietnam (mn)

At the end of October 2023, the fund’s largest positions were: Lam Dong Minerals and Building Materials JSC (8.4%) – a building material supplier, TNG Investment and Trading JSC (7.9%) – an apparel manufacturer, Thien Long Group (7.7%) – a manufacturer of office supplies, Military Insurance Corp (7.7%) – an insurance company, and Agriculture Bank Insurance JSC (6.8%) – an insurance company.

The portfolio was invested in 56 names and held 5.4% in cash. The sectors with the largest allocation of assets were consumer (47.6%) and financials (18.5%). The fund's estimated weighted harmonic average trailing 12 months P/E ratio (only companies with profit) was 11.34x, the estimated weighted harmonic average P/B ratio was 1.20x, and the estimated weighted average portfolio dividend yield was 4.75%. The fund’s portfolio carbon footprint is 2.81 tons per USD 1 mn invested.

I hope you have enjoyed reading this newsletter. If you would like any further information, please get in touch with me or my colleagues at This email address is being protected from spambots. You need JavaScript enabled to view it.

With kind regards,

Thomas Hugger
CEO & Fund Manager

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Disclaimer:

This Newsletter is not intended as an offer or solicitation with respect to the purchase or sale of any security. No such offer or solicitation will be made prior to the delivery of the Offering Documents. Before making an investment decision, potential investors should review the Offering Documents and inform themselves as to the legal requirements and tax consequences within the countries of their citizenship, residence, domicile and place of business with respect to the acquisition, holding or disposal of shares, and any foreign exchange restrictions that may be relevant thereto. This newsletter is not intended for distribution to or use by any person or entity in any jurisdiction or country where such distribution or use would be contrary to local law and regulation, and is intended solely for the use of the person to whom it is intended. The information and opinions contained in this Newsletter have been compiled from or arrived at in good faith from sources deemed reliable. Opinions expressed are current as of the date appearing in this Newsletter only. Neither Asia Frontier Capital Ltd (AFCL), nor any of its subsidiaries or affiliates will make any representation or warranty to the accuracy or completeness of the information contained herein. Certain information contained herein constitutes “forward-looking statements”, which can be identified by the use of forward-looking terminology such as “may”, “will”, “should”, “expect”, “anticipate”, “project”, “estimate”, “intend”, or “believe” or the negatives thereof or other variations thereon or comparable terminology. Due to various risks and uncertainties, actual events or results or the actual performance of Funds managed by AFCL or its subsidiaries and affiliates may differ materially from those reflected or contemplated in such forward-looking statements. Past performance is not necessarily indicative of future results.

For Switzerland only: This is an advertising document. The state of the origin of the fund is the Cayman Islands. This document may only be provided to qualified investors within the meaning of art. 10 para. 3 and 3ter CISA. In Switzerland, the representative is Acolin Fund Services AG, Leutschenbachstrasse 50, 8050 Zurich, Switzerland, whilst the paying agent is NPB Neue Privat Bank AG, Limmatquai 1 / am Bellevue, 8024 Zurich, Switzerland. The basic documents of the fund report may be obtained free of charge from the representative. Past performance is no indication of current or future performance. The performance data do not take account of the commissions, if any, and fund transfer costs incurred on the issue and redemption of units.

AFC Asia Frontier Fund is registered for sale to qualified/professional investors in Japan, Singapore, Switzerland, the United Kingdom, and the United States. AFC Iraq Fund and AFC Uzbekistan Fund in Singapore, Switzerland, the United Kingdom, and the United States. AFC Vietnam Fund in Japan, Singapore, Switzerland, and the United Kingdom. 

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