AS AT 29 SEPTEMBER 2017
MAGNA LATIN AMERICAN FUND
EUR
FUND DETAILS FUND OBJECTIVE
Structure UCITS The Magna Latin American Fund seeks to achieve capital growth by investing in a diversified portfolio of Latin American Securities. The Magna Latin American Fund is a sub-fund of the Magna Umbrella Fund plc. Domicile Ireland
Registrations AT CH DE DK ES FI FR GB IE IT STRATEGY DESCRIPTION LU NL SE SG We look to invest in quality companies, with strong management and sustainable growth prospects, at Launch Date 21 Dec 2004 attractive valuations. Our approach to investing is bottom-up, stock-focused and research-driven. We focus on both quantitative and qualitative analysis and search for less well-understood opportunities. Regular Income Accumulated management meetings are a key principle of our process. We like to find companies we can invest in for the Daily Dealing 12 noon (Dublin time) long term. Belief in the sustainability of their growth and evidence of good shareholder relations are key drivers for us. Portfolios are built on the basis of our conviction; we are aware of any benchmark index but if Dealing Cut-off T - 1 we don’t like a stock, we don’t invest in it, regardless of its index weighting. Number of Holdings 44 HIGHLIGHTS Cash Weight -0.2% Tracking Error 6.7% 30 ~ 60 holdings
Active Money 60.8% Invests across all market capitalizations
Information Ratio -0.50 Stockpicking focus
Beta 0.80
Fund Size EUR 6.3m
Strategy Size EUR 187.0m
Benchmark MSCI EM Latin America 10/40 GROSS FUND PERFORMANCE (%) Portfolio Advisors Ian Simmons and team Period to 29 September 2017 1M 3M 6M YTD 1Y 2Y 3Y 5Y 10Y SI Tracking Error, Information Ratio and Beta are calculated from the last 3 years monthly fund data. Magna Latin American Fund 3.49 8.26 1.06 12.62 10.43 15.39 -1.40 -1.09 1.45 11.40
MSCI EM Latin America 10/40 Index 2.15 11.02 2.30 13.05 19.39 23.53 1.93 -0.19 1.75 10.16 AWARDS & RATINGS Added Value 1.33 -2.76 -1.24 -0.43 -8.96 -8.14 -3.34 -0.90 -0.30 1.23
Calendar Year 2016 2015 2014 2013 2012 2011 2010 2009 2008 2007
Magna Latin American Fund 15.26 -20.64 4.38 -14.22 12.77 -18.54 34.60 110.99-52.34 33.13
MSCI EM Latin America 10/40 Index 34.96 -22.60 -0.78 -17.02 7.18 -15.95 25.87 100.10 -48.17 35.84
Added Value -19.70 1.96 5.16 2.80 5.59 -2.60 8.72 10.89 -4.16 -2.71
Returns are presented gross of management fees, in EUR SI Since Inception (31 December 2004)
GROWTH OF EUR 10,000 TOP HOLDINGS EUR 39,563 Company Name Country AmBev Brazil Banorte Mexico Bradesco Brazil BRF Brazil Credicorp Peru FEMSA Mexico 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 Itau Unibanco Brazil Kroton Brazil Performance is represented by the Magna Latin American Composite comprising all share classes of the Magna Latin American Fund. Composite performance figures are shown gross, ie before fees, in EUR. The Index is the MSCI EM Latin Lojas Renner Brazil America 10/40 Index (MSCI EM Latin America Index prior to 29 February 2008). Performance figures are annualized for Ultrapar Brazil periods in excess of one year. Past performance should not be seen as an indication of future performance. Charlemagne Capital claims compliance with the Global Investment Performance Standards (GIPS®) and has been independently verified In alphabetical order for the period 1 Jun 2000 through 30 Jun 2017. A copy of the verification report and a presentation that adheres to GIPS Combined weight of top 10 45% standards are available upon request to the Marketing Department.
AS AT 29 SEPTEMBER 2017
MAGNA LATIN AMERICAN FUND
EUR
SECTOR EXPOSURE (%) COMMENTARY In another strong month for the region, the Fund outperformed with our two preferred countries, Argentina and Brazil, leading the way. Argentina has now risen 20% since MSCI delayed its reclassification to emerging market status and improving economic data seems to be adding to Macri’s support in the polls. In Brazil, another 1% rate cut, sustained low inflation and upward GDP revisions continue to drive investors towards domestic cyclicals. Here our holdings in Lojas Renner, Kroton and Smiles provided the highest gains, as management at all three met investors during the month to guide expectations of earning growth over both the short and longer term higher. The latter two in particular remain at suppressed multiples
Energy 5.9 compared to many consumer stories, we think unjustified considering the high quality management teams and potential for upwards earnings revisions. Brazil’s offshore oil fields received a fillip as Exxon partnered Materials 2.1 with Petrobras to take two blocks at auction. This, along with consistent commentary from management on Industrials 9.4 their asset disposal plans and a higher oil price, boosted the share price. Consumer Discretionary 14.8 In Mexico, inflation started to fall but the central bank chose to hold rates steady to cater for any Consumer Staples 17.4 inflationary pressures caused by the earthquakes and hurricanes that battered the country in September. Health Care 0.9 Our Mexican holdings lagged. The peso was under pressure on speculation NAFTA renegotiations may Financials 36.5 prove inconclusive but there are still several rounds to go before we have any clarity. FEMSA sold part of its Information Technology 2.1 highly profitable Heineken stake, and Pinfra added new expansion projects to its portfolio of toll roads, but Telecommunication Services 0.0 despite these positive steps both stocks ended slightly down on the month. Utilities 5.8 Brazil has now overtaken Mexico for year to date performance as investors grow more comfortable with a Real Estate 5.2 scenario where pension reform becomes the first item on the agenda of a new market-friendly government Cash -0.2 post election. We saw Finance Minister Meirelles this month and he remains confident that congress finally understands the need for reform and maintains some hope that progress can be made before year end. Total 100.0 We are still excited about the opportunities for significant gains in Brazil and Argentina despite the strong COUNTRY EXPOSURE (%) performance already this year. We suspect the market underestimates the potential for margin and ROE expansion through operating leverage, efficiency efforts through the recession, and lower financial expenses as rates drop. Mexico might be lacking any obvious catalysts in the short term but looking back in one year’s time our view is that current fears will seem exaggerated. Even if AMLO wins the presidential election, he is highly unlikely to have control of congress so his ability to reverse reforms that were passed into the constitution will be limited. As mayor of Mexico City he proved more sensible than many feared. SUBSCRIPTION INFORMATION
C Shares G Shares R Shares
Argentina 5.7 Minimum Subscription EUR 1,000,000 EUR 5,000 EUR 5,000 Brazil 59.7 Additional Subscriptions EUR 1,000 EUR 100 EUR 100 Chile 4.9 Annual Management Fee 1.25% 1.00% 1.95% Colombia 0.0 Performance Fee No No No Mexico 24.0 Front-end Load Up to 5% 0% Up to 5% Peru 3.9 WPKN Code A0DN7M A1W8A2 A1CZH9 Uruguay 1.1 ISIN Code EUR IE00B04R3D07 IE00BFTW8W95 IE00B3QHJ640 GBP IE00B4360X57 IE00BKRCMN58 IE00B595NK18 USD IE00B3TFC775 IE00BKRCMP72 IE00B58L9G80 Bloomberg Code MAGLMNC MAGLAGE MAGLAMR Others (inc Cash) 0.6 Valor Number EUR 2033423 23836750 11378836 Total 100.0 A full NAV history of all share classes is available on www.charlemagnecapital.com
This document is issued by Charlemagne Capital (UK) Limited, Address: 39 St James’s Street Tel: + 44 (0)20 7518 2100 Email: [email protected] authorised and regulated by the Financial Conduct Authority (FCA). London SW1A 1JD Fax: + 44 (0)20 7518 2199 Website: www.charlemagnecapital.com
This document may not be disclosed, distributed, copied, reproduced or used (in whole or in part) for any purpose without the express written consent of Charlemagne Capital (UK) Limited (“Charlemagne”). Charlemagne has been appointed by Magna Umbrella Fund plc (the “Company”) to procure the distribution of its Shares. The Company is an open-ended umbrella investment company authorised by the Central Bank of Ireland as a UCITS. Charlemagne Capital (UK) Limited is authorised and regulated by the Financial Conduct Authority (“FCA”). The Company has sought and has been granted approval by the relevant regulatory authorities to market and distribute its Shares as appropriate in the following jurisdictions: UK; Germany; Luxembourg; Austria; *Switzerland; The Netherlands; Denmark; Singapore; France, Finland, Sweden, Spain and Italy. In Canada, the distribution of this document and any other document relating to the distribution or marketing of the Company (including the Prospectus relating to Company), is made and will be made only to accredited investors (as defined in National Instrument 45-106 – Prospectus and Registration Exemptions) or pursuant to another applicable prospectus exemption. In Singapore, this document shall be construed as part of an information memorandum for the purposes of section 305(5) of the Securities and Futures Act (Cap 289) of Singapore (“SFA”). Accordingly, this document must not be relied upon or construed on its own without reference to the information memorandum. This document is not a prospectus as defined in the SFA and, accordingly, statutory liability under the SFA in relation to the content of prospectuses does not apply, and the offeree should consider carefully whether the investment is suitable for him. The Company is not authorised or recognised by the Monetary Authority of Singapore and the Shares of the Company are not allowed to be offered to the retail public. This document may not be circulated or distributed, nor may the Shares of the Company be offered or sold, whether directly or indirectly, to any person in Singapore other than (a) an institutional investor (as defined in section 4A of the SFA, (b) a “relevant person” as defined in section 305(5) of the SFA, (c) a person acquiring the securities as principal and on such terms as set out in section 305(2) of the SFA, or (d) otherwise pursuant to, and in accordance with the conditions of, any other applicable provision of the SFA. Full information on the regulatory status and the applicable laws relating to the marketing and distribution of the Company’s Shares in the various jurisdictions in which the Company is registered are more particularly set out in the Prospectus of the Company. The purchase of shares in the Company constitutes a high risk investment and investors may lose a substantial portion or even all of the money they invest in the Company. Investors are advised to read the section of the Prospectus entitled “Risk Factors” prior to investing in the Company. The information within does not constitute investment, tax, legal or other advice and is not a recommendation or an offer to sell nor a solicitation of an offer to buy Shares in the Company, which may only be made on the basis of the Company’s Prospectus. An investor in the United Kingdom who enters into an agreement to acquire Shares in the Company will not have the right to cancel the agreement under any cancellation rules made by the FCA. Charlemagne reasonably believes that the information contained herein is accurate as at the date of publication but no warranty or guarantee (express or implied) is given as to accuracy or completeness. The information and any opinions expressed herein may change at any time. The Prospectus of the Company shall not be distributed and Shares in the Company shall not be offered, distributed or sold in any jurisdiction in which such distribution, offer or sale would be unlawful. Prior to investing in the Company, investors are advised to contact their independent financial adviser and should read all documents relating to the Company that may be obtained from the Administrator, the Share Distributor or the website of www.fundinfo.com. *The prospectus for Switzerland, Key Investor Information Documents, the articles of incorporation, the annual and semi-annual reports, as well as the list of the buying and selling transactions can be obtained free of charge from the representative in Switzerland, Carnegie Fund Services S.A., 11, rue du Général-Dufour, 1204 Geneva, Switzerland, Tel. +41 227051177, Fax: + 41 227051179, www.carnegie-fund-services.ch. The paying agent is Banque Cantonale de Genève, 17 Quai de l'Ile, 1204 Geneva, Switzerland.