The fund, launched in 2008, investing in companies operating in Frontier markets across the market capitalisation spectrum. The fund manager looks for companies which have a solid business models, generating strong cash flows and in a growing industry. Corporate governance is also a key criteria for selection and the team meet with the management of companies before investing. Finally, the fund managers make sure that the selected stocks offer enough liquidity as the fund trades on a daily basis.
We like the fund as its robust process also benefits from the extensive global reach of HSBC with offices located in many of these Frontier markets. It helps the fund managers to have a better understanding of the political and economic situation of each country.