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Top performing frontier market managers revealed

Citywire Selector uncovers the outperformers squeezing the best returns from a volatile market.

Frontier in flux

The frontier market index is primed for a recalibration, with Pakistan moving up to EM status and Argentina and Nigeria likely to follow suit. Following a tough period in performance terms for frontier market investors, the potential loss of three of the biggest market constituents could cause considerable headaches.

Assets have already begun to shift away from the frontier sector, as evidenced by Franklin Templeton re-opening Mark Mobius’ formerly blockbuster fund after a four-year lock-up. But is it all doom and gloom for those looking to invest in under-researched and under-developed nations?

In this gallery, Citywire Selector shines a light on the 31 dedicated frontier market managers in our database to see who boasts the best outperformance at a time when the average manager has lost almost 5% and the index is down 7.7% on a three-year basis.

5. Mattias Martinsson & Mathias Althoff, Tundra Fonder

Funds: Tundra Frontier Opportunities & Tundra Sustainable Frontier

Kicking off list are Mattias Martinsson and Mathias Althoff, who are both Citywire A-rate. They have managed both the Tundra Frontier Opportunties and Tundra Sustainable Frontier funds since their respective launch dates.

Co-manager Johan Elmquist is not included in the line up as he does not manage the Tundra Sustainable Frontier fund. Similarly, Shamoon Tariq joined Martinsson and Althoff on both funds in August 2015 but his track record is too short to be included in this three-year analysis.

In terms of holdings, the managers devote 32.28% of the Frontier Opportunities fund to the financial sector and 15% to the materials sector. The largest company holding is Bangladesh-headquartered bank Brac Bank at 4.94%, which is followed by Pakistani financial group Meezan Bank.

4. Gustavo Galindo, Russell Investments

Fund: Russell Investments Frontier Markets Equity

Citywire A-rated Gustavo Galindo has run the Russell Investments Frontier Markets Equity fund since May 2014. Pakistan is the manager’s top country allocation at 11.73% followed by Bangladesh at 9.27%.

Galindo’s largest sector holding in the fund is financials at 33.23% and he devotes 14.46% to consumer goods. In terms of companies, he also has exposure to Pakistan stock Brac Bank, which makes up 3.53% of the fund, while Argentinian electricity company Pampa Energia is the second largest allocation at 2.8%.

3. Chris Turner, HSBC Global Asset Management

Fund: HSBC GIF Frontier Markets

Citywire-AAA rated Chris Turner has 59 holdings in the HSBC GIF Frontier Markets fund. The largest of these is Argentinian financial services company Grupo Fianciero, which makes up 4.1% of the fund. It is followed by UAE-based delivery company Aramex, which makes up 3.9% of the fund.

On a sector basis, the largest allocation is to financials at 40.1%. Turner devotes 11.9% of the fund to materials and 8.5% of the fund to industrials. Turner was joined on the fund in June 2016 by co-manager Ramzi Sidani.

2. Steffan Böttcher & Dominic Bokor-Ingram, Charlemagne Capital

Fund: Charlemagne Magna New Frontiers

Narrowly missing out on top spot are Steffan Böttcher and Dominic Bokor-Ingram. The AAA-rated duo’s largest country exposure in the Magna New Frontiers fund is Argentina at 19% followed by the UAE, at 18%.

In terms of sectors, the managers devote 20% of the fund to financials, with companies including the Bank of Georgia. The second largest sector allocation is energy at 17%. Four of the top ten company holdings are in the energy sector.

New holdings added to the fund in the last quarter are HumanSoft, which is an education company in Kuwait, which the pairs said in their latest investment update remains an unknown quantity for investors. Another new holding is Electrica, a Romanian electricity distribution company which the duo expect to improve under new management.

1. Thomas Hugger, AFC Asia Capital

Fund: AFC Asia Frontier (Non-US)

Taking the gold medal spot in this line up is Thomas Hugger, who has 101 companies in the AFC Asia Frontier (Non-US) fund. Consumer staples companies form 20.1% of the fund at a sector level, while Hugger devotes 17.7% of his exposure to consumer discretionary stocks.

On a country basis, Vietnam is Hugger’s highest allocation at 31.4%. He also has exposure to Pakistan (20.6%) and Bangladesh (15.7%), as well as a 9.3% allocation to Mongolia. The country produced the fund’s top stock performer, an oil exploration company which returned 223.5% in April 2017.

Related Fund Managers

Stefan Böttcher
Stefan Böttcher
2/27 in Equity - Frontier Markets (Performance over 3 years) Average Total Return: 39.38%
Dominic Bokor-Ingram
Dominic Bokor-Ingram
1/27 in Equity - Frontier Markets (Performance over 3 years) Average Total Return: 39.38%
Chris Turner
Chris Turner
8/27 in Equity - Frontier Markets (Performance over 3 years) Average Total Return: 11.10%
Ramzi Sidani
Ramzi Sidani
13/39 in Equity - Frontier Markets (Performance over 1 year) Average Total Return: 20.90%
Gustavo Galindo
Gustavo Galindo
9/27 in Equity - Frontier Markets (Performance over 3 years) Average Total Return: 10.45%
Mathias Althoff
Mathias Althoff
12/27 in Equity - Frontier Markets (Performance over 3 years) Average Total Return: 8.25%
Johan Elmquist
Johan Elmquist
13/27 in Equity - Frontier Markets (Performance over 3 years) Average Total Return: 8.25%
Shamoon Tariq
Shamoon Tariq
10/27 in Equity - Frontier Markets (Performance over 3 years) Average Total Return: 8.25%
Thomas Hugger
Thomas Hugger
3/27 in Equity - Frontier Markets (Performance over 3 years) Average Total Return: 24.11%
Mark Mobius
Mark Mobius
26/27 in Equity - Frontier Markets (Performance over 3 years) Average Total Return: -12.44%
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