“To enjoy a reasonable chance for continued better than average results, the investor must follow policies which are (1) inherently sound and promising, and (2) not popular on Wall Street.”

– Benjamin Graham - an English-American financial analyst, economist, accountant, investor and professor, widely known as the "father of value investing"

AFC Funds Performance Summary

Asian frontier markets continue to prove their resilience despite the Middle East conflict entering its seventh month. The AFC Asia Frontier Fund and AFC Uzbekistan Fund reported robust gains of +6.5% and +15.4% respectively, with both funds achieving a new all-time high NAV. The positive momentum in Asian frontier markets was discussed in our regular AFC Quarterly Webinar held on 13^th August 2026 and as usual existing and prospective investors posted excellent questions to our team.

You can view the recording or the presentation slides using the links below.

AFC Uzbekistan Tour 2026

AFC is hosting its 5^th AFC Uzbekistan Tour on Sunday, 20^th September and Monday, 21^st September 2026, bringing existing and prospective investors to experience the reality of Uzbekistan from the ground. This will be a 1.5-day tour starting with a half-day tour of Tashkent on Sunday, followed by a day of meetings with the fund’s portfolio companies on Monday, and concluding with dinner. If you are interested in joining, please write to us at This email address is being protected from spambots. You need JavaScript enabled to view it. to express your interest, and we will follow up with you.

September 2026 Subscription Cut-Off Date

The next cut-off date for subscriptions for our funds will be 24^th September 2026. 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 August 2026.

AFC in the Press

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 Uzbekistan Fund - Manager Comment

The AFC Uzbekistan Fund Class F shares returned +15.4% in August 2026 with another new all-time high NAV of USD 2,559.19, bringing the year-to-date return to +69.3%. The return since inception (29^th March 2019) now stands at +155.9%, representing an annualised return of +13.5% p.a.

Private Sector IPOs on the Horizon

As the Uzbek equity market continues to experience strong inflows, not just in the blue-chips of the market, we are seeing valuations across the board rise, with some reaching levels that don’t make rational sense, which we will discuss further below. Meanwhile, the bond market remains red hot, with a local bank announcing in the final week of August its plans to raise USD 10 million in corporate bonds on the local market at a rate of 8.5%. Things continue to trend positively!

The next step will be IPOs, and we are seeing plans for several companies in logistics and real estate expressing their intention to go public, which will give investors further accessibility to the Uzbek economy. The companies have interesting assets, one with a unique niche and pricing power which should make the company highly sought after. It won’t be a surprise to see another situation of oversubscription if they decide to list on the stock market, but we will have to wait until 2027 to get further clarity. Of course, the Uzbekistan National Investment Fund also has its pipeline of IPOs of state-owned companies, where we hopefully see one or two list in 2027 as well. In the meantime, this is hopefully a trend that sees other companies also look into an IPO of their businesses, just as it took a few successful corporate bond offerings to ignite the bond market.

You’re not Beating the Index! Why?

We’ve been asked by several investors during August if the AFC Uzbekistan Fund is beating the flawed index created by the Tashkent Stock Exchange (UCI), which was up 106.8% for the month. The answer is unfortunately ‘no’, but let us provide some historical context on the index and then describe some of the likely companies that have driven its performance. It will become clear that any investor of size can’t beat the index when it gets going, and equally shouldn’t suffer the cascading drawdowns. Not marketing speak, but we believe the AFC Uzbekistan Fund is a much better indicator of the reality of broad performance on the Tashkent Stock Exchange, specifically as it relates to equities where there is liquidity.

For those who have been reading these monthly updates for several years, you may recall when we had a similar instance of index outperformance relative to the fund, back in late 2020 and early 2021 when the UCI went vertical and subsequently crashed. This is because a private leasing company had its share price manipulated by 199,000% (not a typo!) and then subsequently reversed.

The index is market-cap weighted, though there is no disclosure on the framework for the index and, more importantly, its constituents. The best we can do is surmise what its constituents are. The most we have ever uncovered is that it is market-cap weighted, with no further clarity provided, by any stockbroker nor the Tashkent Stock Exchange itself. This is why, when we launched the fund, we didn’t even include the UCI index in our marketing materials as we found it a meaningless measure of the market. However, we decided to add it once enough investors asked about why it wasn’t included. However, we don’t use it as any form of reference. There are many illiquid state-owned companies with large market caps where an insignificant amount of money can push the share price up 100%, which then “juices” the index higher, creating a false sense of reality in the market.

Case in point was during August when O’ztransgaz (TSE: UTGA), the nearly 100% state-owned natural gas pipeline company with next to no liquidity, saw its share price rise (for no fundamental reason that we know of) by 546%, from UZS 116,000 at the beginning of August 2026 to UZS 750,000 at the end of the month. The volume was an insignificant 134 shares totalling USD 4,268, for the entire month of August! This led UTGA to end August with a market cap of USD 39.7 billion, and it now trades at a “bargain basement discount” (joking) price-to-book value of 53x!

I hope this provides some clarity on the index and its insignificant value to investors, even though its price moves can be quite impressive on occasion.

Tashkent Stock Exchange UCI Index

The Tashkent International Financial Center Matures

When I first visited Central Asia in May 2018, I started in Astana, Kazakhstan, at the Astana International Financial Centre (AIFC). The AIFC was created as a jurisdiction within Kazakhstan where companies can incorporate and operate under English common law, benefitting from preferential tax rates and better security when doing business in the country. It was a slow start when the AIFC launched in January 2018. During my visit in May there were 12 companies incorporated. That has since ballooned to a few thousand, specifically as companies doing business in Russia benefit from being domiciled in AIFC for banking, etc.

Over the past several years, Uzbekistan has sought to replicate the AIFC through the Tashkent International Financial Center (TIFC), which was established on 30th March 2026. Uzbekistan as a jurisdiction for a financial centre makes much more sense over the coming years as it is the “buckle” in China’s Belt-Road-Initiative, hosts the largest population in the region, and is the logistical focal point of Central Asia. If you’re going to do business in Central Asia, it wouldn’t be a bad idea to incorporate in Tashkent. In time, I even see some of the development financial institutions relocating their offices to Tashkent (i.e. there have been years where the European Bank for Reconstruction and Development’s Kazakhstan office has done more business in Uzbekistan than in Kazakhstan).

Uzbekistan has big plans with the TIFC and will guarantee zero value-added and property tax for entities. This further includes zero customs duties and no restrictions on the movement of capital and is part of the government’s focus on attracting investment in the spheres of IT and financial services. By 2030, the government is targeting USD 25 billion in foreign direct investments. One further point which is key to making the TIFC a success, and establishing Uzbekistan’s gravity in attracting regional capital and expertise, is the constitutional law on TIFC that insulates it from domestic legislative changes (ie. decreases the risk of establishing a business only to then have the rules change).

TIFC will be an interesting project to watch over the coming years as I remain convinced that in a decade or so, Uzbekistan will be the dominant economy in Central Asia.

AFC Uzbekistan Tour 2026

AFC is hosting its 5^th AFC Uzbekistan Tour on Sunday, 20^th September and Monday, 21^st September 2026, bringing existing and prospective investors to experience the reality of Uzbekistan from the ground. This will be a 1.5-day tour starting with a half-day tour of Tashkent on Sunday, followed by a day of meetings with the fund’s portfolio companies on Monday, and concluding with dinner. If you are interested in joining, please write to us at This email address is being protected from spambots. You need JavaScript enabled to view it. to express your interest and we will follow up with you.

At the end of August 2026, the fund was invested in 24 names and held 1.7% in cash. The portfolio was allocated to Uzbekistan (98.30%) and Kyrgyzstan (0.03%). The sectors with the largest allocation of assets were financials (67.74%) and materials (13.58%). The fund's estimated weighted harmonic average trailing 12-month P/E ratio (only companies with profit) was 8.55x, the estimated weighted harmonic average P/B ratio was 1.16x, and the estimated weighted average portfolio dividend yield was 1.85%.

 AFC Asia Frontier Fund - Manager Comment

The AFC Asia Frontier Fund (AAFF) USD A-shares returned +6.5% in August 2026 to a new all-time high NAV of USD 2,546.43. The MSCI Frontier Markets Asia Net Total Return USD Index gained 5.9%, while the MSCI Frontier Markets Net Total Return USD Index gained +3.7%, and the MSCI World Net Total Return USD Index gained 2.6%. Year to date, the fund returned +11.2% while the MSCI Frontier Markets Asia Net Total Return USD Index returned +4.7% during the same period. The performance of the AFC Asia Frontier Fund USD A-shares since inception on 30^th March 2012 now stands at +154.6%, while the MSCI Frontier Markets Asia Net Total Return USD Index increased +30.4% during the same period. The fund’s annualised performance over 5 years is +10.5% with a Sharpe ratio of 0.61 and a Sortino ratio of 0.82. The broad diversification of the fund’s portfolio has resulted in low risk with an annualised volatility of 10.6% and a correlation of the fund versus the MSCI World Net Total Return USD Index of 0.51, all based on monthly observations since inception.

It was a very strong month for fund performance as Asian frontier countries adapt well to the ongoing geopolitical uncertainties in the Middle East. Gains were broad-based in August and led by Uzbekistan, Kazakhstan, Vietnam, Papua New Guinea, and Georgia. The only two negative contributors to performance were Pakistan and Iraq.

With the Middle East conflict now entering its seventh month, overall earnings growth in our fund universe remains robust despite the uncertainties caused by volatile energy prices. In 2Q26, the fund’s Vietnam and Pakistan holdings have led the way with an average YoY net profit growth of +31% and +20% respectively. This reflects the ongoing economic tailwinds in Asian frontier countries that were already underway before the Middle East conflict began and hence shows the resilience of our country universe in managing the economic impact of the Middle East conflict.

In terms of managing the economic impact of the Middle East conflict, both Kazakhstan and Pakistan received sovereign credit rating upgrades during the month. S&P Global Ratings upgraded Kazakhstan’s sovereign credit rating to BBB/A-2 because of its resilient economic growth and fiscal reform efforts.

Furthermore, the National Bank of Kazakhstan reduced its benchmark interest rate by another 50 basis points on 4^th September, bringing the total interest rate cuts so far to 175 basis points in 2026 as inflation numbers continue to soften. Inflation for August 2026 came in at 9.8% which is the first single digit reading since February 2025. We believe that an interest rate easing cycle in Kazakhstan will be positive for Kaspi’s consumer finance business and this is one of the key reasons why Kaspi’s stock price has been re-rating upwards in the last few months

National Bank of Kazakhstan Reduced its Benchmark Interest Rate the Third Time in 2026

Kaspi has Begun to Re-Rate as Interest Rates Decline in Kazakhstan

Pakistan’s sovereign credit rating was upgraded by Moody’s from Caa1 to B3 on the back of its ongoing macroeconomic stability, improving fiscal balances, and ongoing execution of IMF-led reforms. With the Moody’s upgrade, Pakistan has now received a sovereign credit rating upgrade from all three major credit rating agencies in the past eighteen months (Fitch, S&P, and Moody’s). These credit rating upgrades tie into our thesis that Pakistan’s political and macroeconomic gains over the past few years position its stock market very well for a continued re-rating for the rest of 2026 and into 2027 as economic momentum is returning after many soft years, which provides a platform for sustained earnings growth, which should help re-rate still attractive valuations. Pakistan is the fund’s second-largest country weight at 14.1%.

The best-performing indexes in the AAFF universe in August were Cambodia (+18.2%) and Mongolia (+7.6%). The poorest-performing markets were Bangladesh (−5.0%) and Iraq (−2.7%). The top-performing portfolio stocks this month were a gold explorer in Papua New Guinea (+44.7%), a jewellery retailer in Vietnam (+35.8%), a manganese explorer in Timor-Leste (+30.4%), two gold producers: one in Papua New Guinea (+30.0%), and the other one in Cambodia (+29.3%).

In August, the fund initiated a position in a Cambodian casino operator and added to existing positions in Cambodia, Mongolia, and Vietnam.

At the end of August 2026, the portfolio was invested in 69 companies, 2 funds, and held 2.2% in cash. The two biggest stock positions were a bank in Uzbekistan (8.2%) and a cement producer in Pakistan (3.6%). The countries with the largest asset allocation were Uzbekistan (16.6%), Pakistan (14.1%), and Sri Lanka (10.4%). The sectors with the largest allocation of assets were financials (41.6%) and consumer goods (16.3%). The fund's estimated weighted harmonic average trailing 12-month P/E ratio (only companies with profit) was 7.78x, the estimated weighted harmonic average P/B ratio was 1.35x, and the estimated weighted average portfolio dividend yield was 3.85%. The fund’s portfolio carbon footprint is 0.29 tons per USD 1 mn invested.

AFC Vietnam Fund - Manager Comment

The AFC Vietnam Fund returned +3.3% in August with a NAV of USD 3,231.91, bringing the 2026 return to −9.0% and the return since inception to +223.2%. This month, the fund underperformed the benchmark, the Ho Chi Minh City VN Index, which gained 6.4% in USD terms. The fund’s annualised return since inception stands at +9.7% p.a. The broad diversification of the fund’s portfolio resulted in an annualised volatility of 14.83%, a Sharpe ratio of 0.51, and a low correlation of the fund versus the MSCI World Index USD of 0.48, all based on monthly observations since inception.

VN-Index from July 2025 to August 2026

Market Developments

The market had simply fallen too far in recent months relative to the underlying fundamentals, and began to recover in August. The weakness had been driven largely by tighter liquidity, higher interest rates and deteriorating investor sentiment, rather than any meaningful deterioration in Vietnam’s economy or corporate earnings. With economic growth remaining strong, exports reaching record levels and corporate earnings continuing to expand, valuations had become increasingly difficult to ignore.

Sentiment also received a significant boost from positive developments surrounding FTSE Russell’s prospective upgrade of Vietnam. FTSE increased Vietnam’s prospective weight in the FTSE Emerging All Cap Index from 0.329% to 0.49%, an increase of almost 50%, while expanding the number of eligible Vietnamese stocks from 23 to 27. Following these changes, Vietcap Securities raised its estimate of potential passive index inflows from approximately USD 2 bn to USD 3 bn.

These expected inflows are likely to be implemented gradually between September 2026 and September 2027, potentially providing a meaningful and more structural source of demand for Vietnamese equities over the coming year. Vietnam’s transition into the emerging-market universe should also increase its visibility among global institutional investors, extending the potential impact beyond passive index flows.

The development is particularly relevant to AFC Vietnam Fund, with seven of our portfolio companies among the 27 Vietnamese stocks included in the FTSE Global All Cap eligibility list. We therefore believe the August recovery reflects not only a rebound from depressed valuations, but also the beginning of a potentially important structural shift in the international investor base for Vietnamese equities.

Vietnam’s Economy Remains Strong

Vietnam’s macroeconomic fundamentals remain remarkably resilient, with strong economic growth, rising industrial production and continued corporate earnings growth despite persistent global uncertainty.

Exports provide perhaps the clearest evidence. Vietnam achieved a record USD 53.1 bn of exports in July, up 25.0% year-on-year, bringing exports for the first seven months of 2026 to USD 319.5 bn, an increase of 21.7%.

Growth has been broad-based across major trading partners and increasingly driven by higher-value manufacturing. Exports of electronics, computers, and components, in particular, increased by more than 50% year-on-year.

This result is particularly impressive given geopolitical tensions, higher energy costs, and new tariff barriers. In our view, this demonstrates that Vietnam’s export competitiveness is becoming increasingly structural, supported by continued FDI, a more sophisticated manufacturing base, and deeper integration into global supply chains. The World Bank now ranks Vietnam among the world’s 15 largest trading economies.

Phu Tai JSC – When Fear and Fundamentals Diverge

Despite Vietnam’s strong export performance, concerns over tariffs, energy costs, and geopolitical uncertainty continue to weigh on investor sentiment toward export-oriented companies. Phu Tai JSC (PTB) provides a clear example of the disconnect between market sentiment and underlying fundamentals.

PTB, one of AFC Vietnam Fund’s ten largest holdings, delivered another strong performance in the first half of 2026. Revenue increased 18.5% year-on-year to a record VND 4,179 bn, while net profit rose 16.5% to VND 286.8 bn. Yet despite these results, PTB’s share price declined by nearly 20% during the second quarter.

More importantly, PTB’s first-half net profit has recovered from VND 169 bn in 2023 to almost VND 287 bn today, an increase of approximately 70% in just three years and close to its previous historical peak. Yet rather than being rewarded for this recovery, the stock has been significantly de-rated. PTB currently trades at approximately 4.3x earnings and 0.9x book value, while offering a dividend yield of around 5%.

We do not dismiss the risks facing exporters. Tariffs, energy costs, and geopolitical developments are real variables that could affect future earnings. But there is an important distinction between risk and outcome. So far, neither Vietnam’s export data nor PTB’s operating performance provides evidence of the deterioration priced into the stock.

At 4.3x earnings, we do not need an optimistic scenario to generate an attractive return. If PTB continues to deliver solid earnings and the feared deterioration fails to materialise to the extent currently implied by its share price, even a partial recovery in its valuation could provide meaningful upside.

Phu Tai JSC 1H Net Profit 2020–2026

The Main Headwind: Interest Rates

This raises an obvious question: if Vietnam’s economy is growing strongly and corporate earnings continue to expand, why has the stock market failed to reflect these fundamentals more meaningfully?

In our view, the main explanation is a short-term factor: interest rates. The conflict in the Middle East has pushed energy prices higher, adding to inflationary pressures and contributing to tighter domestic monetary conditions. Deposit rates, which previously stood at around 6–7%, have risen toward 8–9%, while lending rates have increased from approximately 8–9% to 11–13%.

The impact on equities is significant. Higher deposit rates make bank savings more attractive to domestic investors, while higher borrowing costs reduce leverage and liquidity available to the stock market. We therefore see interest rates as the most important near-term headwind for Vietnamese equities.

Importantly, however, we do not view this as a structural deterioration in Vietnam’s economy. The current pressure on rates is largely driven by external factors, particularly higher energy prices and geopolitical tensions. While these pressures may persist, we believe they are unlikely to fundamentally alter Vietnam’s long-term growth trajectory or the earnings potential of its companies.

Moreover, even in a higher-rate environment, several companies in the AFC Vietnam Fund portfolio are well positioned to benefit from these conditions.

Agriculture Bank Insurance JSC – When Higher Interest Rates Become a Tailwind

Agriculture Bank Insurance JSC (ABI) provides a good example of how a macroeconomic headwind can become a tailwind for individual companies. As an insurer, ABI maintains substantial financial assets in bank deposits and other interest-bearing instruments. Higher interest rates can therefore translate directly into higher investment income.

ABI currently trades at approximately 6x earnings and 1x book value, with a market capitalization of around VND 1,895 bn. Remarkably, the company holds approximately VND 3,860 bn in cash and bank deposits, more than twice its entire market capitalisation.

These assets are not simply surplus cash, as they support insurance liabilities and regulatory capital requirements. Nevertheless, the valuation is striking. Moreover, the same higher interest rates that are weighing on the broader equity market could support ABI’s earnings as its substantial deposit portfolio is gradually reinvested at higher yields.

ABI illustrates an important characteristic of our portfolio: we do not need every macroeconomic variable to move in our favour. What represents a headwind for the broader market can, in some cases, become a tailwind for the companies we own.

One of the Lowest Valuations in the Fund’s History

ABI and PTB are far from isolated cases. Across the portfolio, we continue to find exceptionally low valuations despite solid underlying fundamentals. Saigon-Hanoi Commmercial Bank (SHB), Vietnam’s fifth-largest bank, trades at just 2.8x earnings while TNG, the country’s second-largest listed garment exporter, trades at approximately 4.8x earnings.

With earnings continuing to grow while share prices have declined, the valuation of AFC Vietnam Fund has fallen to a trailing P/E of approximately 8x. Based on our current earnings estimates, the Fund is trading at just 6.5x forward earnings by year-end, among the lowest valuation levels in the Fund’s history.

AFC Vietnam Fund’s P/E History

The fund’s historical P/E chart reveals an interesting pattern: periods of exceptionally depressed valuations have historically been followed by strong recoveries. In August 2015, AFC Vietnam Fund gained approximately 26% over the following 12 months. When the fund’s P/E reached another low in March 2020, it subsequently gained approximately 78% over the next 12 months. More recently, following the valuation trough in October 2022, the fund rose approximately 19% over the subsequent 12 months.

Today, the portfolio is once again approaching these historical valuation extremes. The fund currently trades at a forward P/E of approximately 6.5x, meaning that the companies in our portfolio are expected to generate earnings equivalent to approximately 15.4% of their current market value. In other words, investors are paying only 6.5 times the earnings these businesses are expected to generate over the coming year. This combination of exceptionally low valuations and continued earnings growth across many of our portfolio companies makes the current opportunity particularly compelling.

While no one can predict the exact market bottom, we believe the combination of historically low valuations, continued earnings growth, and improving market conditions provides strong evidence that the fund is approaching - or may already have reached - a bottoming phase.

At the end of August 2026, the fund’s largest positions were: Minh Phu Seafood Corp (9.4%) – a seafood company, Lam Dong Minerals and Building Materials (8.2%) – a building material supplier, Agriculture Bank Insurance (8.2%) – an insurance company, Phu Tai JSC (6.6%) – a home and office furnishings company, and Hai Phong Paint JSC (4.2%) – a paint manufacturer.

The portfolio was invested in 33 names and held 5.4% in cash. The sectors with the largest allocation of assets were financials (39.1%) and consumer (36.0%). The fund's estimated weighted harmonic average trailing 12-month P/E ratio (only companies with profit) was 8.20x, the estimated weighted harmonic average P/B ratio was 1.08x, and the estimated weighted average portfolio dividend yield was 5.79%. The fund’s portfolio carbon footprint is 1.93 tons per USD 1 mn invested.

AFC Iraq Fund - Manager Comment

The AFC Iraq Fund Class D shares returned −1.7% in August 2026 with a NAV of USD 2,695.35, outperforming its benchmark, the Rabee Securities RSISX USD Index (RSISUSD index), which lost 2.7% during the month. The fund gained 43.5% in 2024 on the back of a stellar performance in 2023 of +110.4%. The fund is up by 12.3% for the year versus the index, which went up by 7.9%. Since inception, the fund has gained 169.5% while the RSISUSD index is up by 83.9%, an outperformance of 85.6%. The annualised return since inception of the fund stands at +9.3% p.a.

The month marked the recovery of regional oil exports through the Gulf to about two-thirds of pre-war levels, thus limiting the impact of the initial closure of the Strait of Hormuz for the region’s oil exporters. In Iraq’s case, the recovery of both its southern exports through the Strait of Hormuz (green bars in chart below) and northern exports via Türkiye’s Ceyhan port on the Mediterranean Sea (maroon bars in chart below) took the combined exports to 60% of pre-war levels. As long as the current U.S.-Iran no-peace/no-war stalemate continues, the recovery’s momentum is unlikely to take exports to much higher percentages of pre-war levels; nevertheless, exports are likely to improve incrementally over the next few months.

Actual and Projected Oil Exports for 2026

The two-month lag between oil exports and the receipt of their revenues^** means that full oil revenues from the August export recovery will not be felt until October (chart below) – in much the same way that the revenue shock from the Strait of Hormuz’s closure was not felt immediately, as asserted at the time in “Market Reaches All-Time Highs as War Rages”. Somewhat mitigating the sharp drop in oil revenues of the last few months, and the reduced revenues from projected oil exports, is the sharp recovery in non-oil revenues that benefited from the implementation of the new automated customs tariff system at the end of 2025. In January-June 2026, non-oil revenues amounted to Iraqi dinars (IQD) 7.4 trillion, which was 50% higher than in the same period of the prior year. Nevertheless, even if this growth continues for the rest of the year, non-oil revenues cannot fully make up for the sharp drop in oil revenues; thus, the year’s projected deficit will be much larger than in recent years.

The budget deficit was funded in the last few months – and will continue to be funded for the rest of the year – by a combination of tight cost controls and the issuance of domestic debt, in the form of treasury bills (T-Bills). The silver lining, as asserted in “What Next after a Gangbuster Three-year Rally”, is that this much increased need for sovereign debt will play a big role in developing the country’s bond market, which will ultimately bring with it “bond market discipline” that has the potential to correct the structural imbalances between current and investment spending that were perpetuated in every budget over the last two decades.

Actual and Projected Revenues and Expenditures for 2026

In conclusion, the high quality of the fund’s holdings, and their future earnings growth, should drive the fund’s performance irrespective of any volatility that the next few months might bring. However, considerable risks remain, in that the pause in the tit-for-tat attacks between the U.S. and Iran could collapse, starting a conflict that could escalate considerably beyond the control of participants, direct and indirect, and become an all-out war engulfing the region.

At the end of August 2026, the AFC Iraq Fund was invested in 8 names and had a cash level of 4.5%. 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 (93.6%), Norway (1.7%), and the U.K. (0.2%). The sectors with the largest allocation of assets were financials (64.9%) and communications (19.6%). The fund's estimated weighted harmonic average trailing 12-month P/E ratio (only companies with profit) was 8.30x, the estimated weighted harmonic average P/B ratio was 2.13x, and the estimated weighted average portfolio dividend yield was 6.76%. The fund’s portfolio carbon footprint is 0.06 tons per USD 1 mn invested.

Notes:

(*) Projections for oil exports assume incremental month-over-month increases from August’s estimated levels. Blended oil prices for southern oil exports assume a discount of $25 per barrel (/bbl) to Brent crude futures prices, while blended oil prices for northern oil exports assume a premium of $1/bbl to Brent crude futures prices (futures prices as of 27-Aug-2026; September reflects a blend of actual and forward pricing). Projected non-oil revenues assume continued growth, but at moderating rates from those experienced in the first half of the year. Projected expenditures assume continued cost controls; each month’s projected expenditures are based on a three-month average of the preceding months’ figures and include estimates for oil capital expenditures that were not made in the first half of the year.

(**) Based on an ongoing review of historical oil exports as reported by the Ministry of Oil and oil revenues as reported by the Ministry of Finance, a two-month lag is the best single overall fit, but for detailed work in Excel, a better fit is a split of 44% same-month and 56% two-months-prior exports, reflecting the mix of cargo payment terms.

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, Maintower, Thurgauerstrasse 36/38, 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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