a time to invest in africa

8/6/2019 A Time to Invest in Africa

http://slidepdf.com/reader/full/a-time-to-invest-in-africa 1/18

A Time to Invest in Africa

Larry SerumaChief Investment Officer

Nile Capital Management, LLC

152 West 57 Street, 32nd Floor

New York, NY 10019

Telephone: 1-877-68-AFRICA

Email: [email protected]

A Time to Invest in Africa



NILE CAPITAL MANAGEMENT, LLC A Time to Invest in Africa

E XECUTIVE SUMMARY

Africa is an attractive investment region from a number of standpoints, including the

following:

A China play China’s trade and investment in Africa’s is a game changer in two ways. First,

China’s investments in infrastructure have the effect of lowering operating

costs for all companies which increases profitability and boosts local

competition. Second, it forces African governments to improve property rights

and reduce political risk, which hindered international companies from

investing in Africa in the past.

Value African markets are attractively valued. The price/earnings ratio for some

frontier African markets is a lowly 6 times, several standard deviations below

the developed world and other Emerging markets.

Growth 9 of the 15 fastest growing countries in the world are located in Africa. A

middle class is beginning to emerge and foreign direct investment as a share of

GDP is on par with China. Fiscal balances are good with low debt and budget

deficits compared with the developed world.

Uncorrelated The un-crowded nature of African assets also makes them unique in anincreasingly interdependent and contagion prone world. Indeed, the

correlation of returns for African assets among themselves and with the global

assets remained low throughout the financial crisis. Hence most of the risk is

idiosyncratic to the rest of portfolio.

Risks African assets in large part are not accessible or are unknown to the average

investor. For example, Africa has more than 100 companies with revenues

greater than $1 billion dollars per year. The information barrier and the over

exaggerated perception of high risk and political uncertainty keep back

sophisticated investors as well.




INTRODUCTION

For the past two decades, the attention of investors around the world has been riveted on the emerging

markets of Asia, which includes two of the four high-growth “BRICs” – India and China. Several

emerging markets of Europe and South America, including the two other BRICs (Brazil and Russia),

also have increased their capital flows and allocations in global investment portfolios.

So, as these opportunities, inevitably pull back, fade or become less dramatic, some other high-growth

emerging and frontier markets should become attractive and worthy of consideration to be added to a

sophisticated investor’s asset allocation strategy. Several are located in Africa, the world’s second

largest continent by population and land mass, behind only Asia in both measures. With a population of more than one billion spread among 53 nations and almost 12 million square miles, Africa is becoming

too big for investors to ignore. Yet, its financial markets and expanding public companies remain

unknown and under invested by most foreigners.

Fortunately, events such as the 2010 FIFA World Cup soccer tournament, hosted by South Africa, have

helped to emphasize the dynamic, modernizing, and politically stable side of Africa. Other visible trends

also are helping to shift investors’ attention toward this vast continent and its diverse opportunities for

economic growth and financial market rewards. For example, African companies benefit from doing

business in a place with many native and unique advantages; cheap labor, fast growing population that

is unencumbered by legacy technology or business models, rising commodity prices, market deregulation,

favorable macro economic policies and improving levels of political stability and transparency.

In this paper, I will summarize the reasons for investing in Africa. In addition, I explain the best way to

participate in African markets and manage African risk is through an actively managed mutual fund

that offers “feet-on-the-ground” expertise in Africa.




W HY THIS IS THE RIGHT

TIME TO INVEST IN A FRICA – A DOZEN REASONS

1. A ground-floor opportunity with potential for high returns

Of all investors who migrated into the BRICs over the past two decades, very few caught the

initial “ground-floor opportunity.” I believe Africa’s economic growth is just forming a powerful

upward curve that will continue for several decades and perhaps become as rewarding as the

BRIC markets over time. Already, we have seen the first wave of strong investment returns from Africa, as summarized in the table below.

Annualized Returns1999-2009

Annualized Returns 1 Year 3 Year 5 Year 10 Y

Dow Jones Industrials 18.82% -5.77% -0.67% -0.97%

S&P 500 23.45% -7.70% -1.65% -2.72%

Russell 2000 25.22% -7.40% -0.82% 2.17%

MSCI World 26.98% -7.65% -0.01% -1.94%

MSCI Emerging Markets 74.50% 2.73% 12.79% 7.29%

South Africa 28.63% 3.55% 16.93% 12.68%

Africa Composite -4.32% -0.72% 9.71% 1

Source: Bloomberg; African Data Includes South Africa, Nigeria, Kenya, Mauritius, Ghana, Egypt, Morocco, Botswana,through 12/2009.

For the decade ending 12/31/09, the average annualized return for South Africa was 12.68%,

which easily beat returns from U.S. stocks, global developed markets, and even emerging

markets. An African Composite Index – consisting of South Africa, Nigeria, Kenya, Mauritius,

Ghana, Egypt, Morocco and Botswana – performed even better, returning an annualized 13.83%

over this period.

These returns underscore a fundamental rule of investing: The first investors to enter new high-growth markets often reap the highest returns over time, as a result of taking risk that other

investors are not yet prepared to accept. Africa today is perhaps comparable to the BRIC

countries in the late 1900s. However, Africa also is taking advantage of more rapid changes,

driven by globalization, communications and technology, than most “frontier markets” of the past

century experienced.




2. Low correlation to domestic, international and emerging markets.

Emerging markets have offered investors opportunities to diversify into new countries, markets,

companies and trends. Africa is rich in low correlation potential because only a few of its stock

markets or public companies are included in popular emerging market indexes or index funds.

Also, the portfolio exposures of large institutions and hedge funds to Africa are still relatively

low, compared to emerging markets. This means Africa has not experienced the liquidity-driven

inflows and outflows of capital that have been seen repeatedly over the past decade in Asia. You

might say that African markets still “move to their own beat,” not the tides of systematic global

market risk.

Perhaps the best measure of portfolio diversification potential is the correlation of investment

returns, and African markets have historically had relatively low correlations with both

developed and emerging markets.

Over a full credit cycle, from January 2002 through June 2009, an African Composite Index has

had a correlation of just 0.59 with the S&P 500, 0.66 with the MSCI EAFE Index, and 0.60 with

the MSCI Emerging Markets Index. Over the same period, the MSCI Emerging Markets Index

has had correlations of 0.82 with the S&P 500 and 0.91 with MSCI EAFE

Correlation: Variability of Returns with S&P 500

25%

61% 59%

89%82%

Nigeria South Africa Africa Composite MSCI EAFE MSCI EM

Source: Bloomberg; Africa Composite Includes South Africa, Nigeria, Kenya, Mauritius, Ghana, Egypt, Morocco,Botswana through 12/2009




3. Strong economic and market growth

Many African countries have enacted macro economic reforms; credit regulation; labor market

regulation; business regulation and have liberalized markets and implemented free trade

policies. This has led to rapid economic growth. According to World Bank projections, 9 of the 15

countries in the world with the highest rate of five-year economic growth are in Africa. In

addition, African is urbanizing at a faster rate than India, and is already nearly as urbanized as

China, according to a recent report by McKinsey Global Institute. As shown in the graph below,

Africa has as many large cities as Europe, and more than North America (the U.S. and Canada

combined).

Rural vs.Urban Population

8273

454030

1827

556070

North

America

EuropeChina AfricaIndia

Rural Urban

Number of cities with

>1 million of people48 52 109 52 48

Population (millions) 1,219 1,032 1,351 830 349

Source: United Nations; McKinsey Global Institute analysis.

The continent has more than 500 million people of working age (15 to 64 years old). By 2040,

that number is projected to exceed 1.1 billion – more than in China or India. Over the past 20

years, three quarters of the continent’s increase in GDP per capita came from an expanding

workforce, the rest from higher productively – according to McKinsey Global Institute.

4. A significant number of African companies are generating strong cash flows, earningsand profits

Africa’s stock markets and public companies collectively represent approximately $1 trillion in

market capitalization. Among Africa’s 53 countries, about 23 have active stock markets, on which

about 1,500 companies are listed, in total. It boasts more than 100 companies with revenues

greater than $1 billion. Some of the largest African companies are well known with international

brands, for example, South African Breweries (one of the world’s largest brewers), Anglo

Platinum (the world largest producer of platinum) and Old Mutual (a financial services




company). These three companies collectively have about $47 billion in sales. The largest and

most active national stock markets are in South Africa, Egypt, Morocco and Nigeria.

The public companies identified as investable opportunities in Africa are profitable with strong

cash flows and dividend yields. A recent study by Oxford University economists Paul Collier and

Jean Warnholz found that the average annual return on capital for the African companies they

studied was 65% to 70% higher than that of comparable firms in China, India, Indonesia, and

Vietnam. Because the cost of capital in Africa is relatively high, many companies have pricing

power driven by a combination of price inflation and increasing consumer demand, and they have

demonstrated strong rates of annual earnings per share growth.

5. Increased global demand for commodities

Africa holds an estimated 30% of the world’s mineral reserves, including 40% of proven goldreserves, 60% of cobalt, and 90% of platinum global reserves. In addition, it has 10% of the global

reserves for oil and 6% of proven gas reserves. As the BRIC countries industrialize, their

demand for natural resources will keep increasing, and they are turning to Africa as a source of

scarce natural resources – especially energy and strategic and industrial metals. The U.S.

National Intelligence Council estimates that 25% of the U.S. oil imports will come from Africa by

2015. Additionally, according to the United Nations projections, the world food production may

need to rise by 70% from 2005-07 levels over the next 40 years to feed the growing population.

Africa has almost 600 million hectares of potentially suitable arable land that is not currently

under cultivation, representing about 60 percent of the world available cropland. The global

“green revolution” in agriculture could potentially unleash new technologies and investments in

Africa.

6. Political risks have been exaggerated

The stereotype of an African country ruled by one-party or military dictators is outdated and

exaggerated. More than 90% of African nations now have functioning democracies, compared to

just 12% a quarter century ago. According to Freedom House, 63% of Africa’s population now

lives in countries designated as “free or partially free.” This is comparable to the ratio in Asia

(66%) and better than the ratio for all countries in the world (59%).

Several African countries once known for their unfavorable political or economic climates have

learned from previous mistakes and have become role models for political/economic stability. A

case in point is Nigeria, which was mired in war and military rule for 30 years after gainingindependence from the United Kingdom in 1960. In 1999, Nigeria regained a democratic

government and it has enjoyed political stability and a peaceful transition in political power ever

since. Between 1999 and 2006, Nigeria privatized more than 116 enterprises. In addition,

Nigeria has paid off its external debts, enacted prudent fiscal policies, and cleaned up its banking

system.




7. The China factor

Chinese trade and investment in Africa is a game-changer. According to Dr. Chris Alden, an

author who monitors cross-border trade and investment in Africa, China alone has increased its

trade with Africa from $10 billion in 2000 to $90 billion in 2009. Dr. Alden has written: “Led by

Chinese petroleum companies flush with massive foreign currency reserves and a strong political

mandate, Chinese businesses have been on an acquisition spree for resources across the African

continent since 1996.” Additionally, from 1990 through 2008, Asia’s share of African trade

doubles to 28 percent, while Western Europe’s portion shrank from 51 percent to 28 percent,

according to a recent study by McKinsey Group.

8. Massive infrastructure development

Africa is expanding its network of roads and highways, ports and airports, electric and water

projects, and communications infrastructure at a faster rate than any continent in history. Again,

Chinese investment is driving the expansion. Recently, China has funded development of 10

major hydropower projects in Africa with a combined capacity of 6,000 megawatts and has built

or rehabilitated 3,000 kilometers (about 1,900 miles) of African railroads.

China has committed to investing its growing reserves into real assets around the world. In

particular, it seeks commodities to secure its future economic growth as an industrial power and

consumer economy. To harvest commodities from Africa, China has been contributing vast

amounts of money and expertise to the improvement of African infrastructure. This has had theside effect of reducing operating costs thus helping local companies grow. Looking forward,

China’s participation in local economies forces African governments to improve property rights

and reduce political risk.

African governments are negotiating better agreements with foreign investors or corporations

that require investors to develop domestic industries or invest in local infrastructure, for

example, Arcelor Mittal’s commitment to build rail and port infrastructure in Senegal. Vale

plans to spend $5billion to $8 billion on mines, ports, and railways in Guinea and Liberia. De

Beers signed a $7 billion deal to mine diamonds in Botswana, including a commitment to build a

diamond sorting facility. Diamond sorting, valuing, and aggregating will now occur domestically,

creating 3000 high paying jobs. Tullow Oil and its partners plan to spend $8 to $10 billion

dollars on infrastructure projects and to build an oil refinery in Uganda. In general, mostresource deals that are negotiated with African governments have an infrastructure or

industrialization component.




9. Economies not mired in debt

Unlike Japan, the U.S., and many economies of Europe, African nations have reasonable levels of

debt relative to GDP. For example, Nigeria has a debt-to-GDP ratio of only about 18%, compared

to more than 100% for Japan, Italy and Greece. (See graph below.) In addition, the high rates of

GDP growth of African nations gives them more flexibility to repay sovereign debts than many

mature economies will have.

National Debt Vs. GDP

Nigeria

Germany

ItalyPortugal

Japan

United Kingdom

Spain

FranceGreece

United States

0%

20%

40%

60%

80%

100%

120%

140%

-12.0%-10.0%-8.0%-6.0%-4.0%-2.0%0.0%

Budget Deficit (%GDP)

N a t i o n a l D e b t ( % G D P )

Source: IMF World Economic Outlook, April 2010, CIA Factbook 2009, Renaissance Capital




10. Steadily increasing capital flows

As investors discover opportunities in Africa, capital flows to the continent are increasing at a

rapid pace. As shown in the graph below, capital flows to Africa now exceed those to three of the

four BRIC countries, all except China. Capital flows and remittances to Africa more than doubled

over just a three-year period (2005 to 2008), according to the United Nations Conference on Trade

and Development (UNCTAD). South Africa hosting the FIFA World Cup will boost the capital

flows in 2010. Capital flows are supported by the rate of return on foreign direct investment in

Africa being higher than in other developing countries (see end notes).

Capital Flows: AfricaCompared to the BRICs

(in $billions)

0

20

40

60

80

100

120

Africa India Brazil Russia China

2004 2005 2006 2007 2008

Source: UNCTAD




11. Valuations in African stock markets remain attractive

Leading public companies in Africa remain attractively valued, especially compared to their

counterparts in the BRICs and other emerging markets or developed markets. For example, an

analysis by Renaissance Capital estimated 2011 multiples of enterprise value/EBITDA ranging

from 7.2 to 3.1 for five African markets. Many companies in Africa also enjoy attractive pricing

power and profit or EBITDA margin, as shown in the graph below.

African Non-financialCompanies

in 5 Markets – 2011

Estimated EV/EBITDA

3.1x

5.0x 5.0x

5.6x

7.2x

Senegalese Zambian Zimbabwean Kenyan Nigerian

African

Non-financialCompanies in 5 Markets

– 2011 EstimatedEV/EBITDA 29%

34%37%

39%

56%

Nigerian Zimbabwean Kenyan Zambian Senegalese

Source: Renaissance Capital (Kato Mukuru)




12. Africa is a young and vital continent with vast opportunities for growth

As populations in the U.S., Japan and western Europe grow increasingly older, Africa’s

population pattern (by age) resembles that of the United States at the start of the post World

War II Baby Boom. In Nigeria, Africa’s most populous nation, the median age of the population is

just 19 years, compared to 37 in the United States, 40 in the U.K., and 45 in Japan.

As a result, Africa’s population is not limited by low birthrates or the burdens of providing

pensions and care for the elderly. Most young people in Africa yearn for a better life and middle-

class comforts, and their aspirations are driving a powerful wave of urbanization, infrastructure

development and consumer markets growth.




THE V ALUE OF A CTIVE

M ANAGEMENT IN A FRICAN

INVESTING

Although the dozen reasons listed above make a compelling case for investing in Africa, caution is

prudent. In most Africa stock markets with the exception of South Africa, trading liquidity is fairly

thin by developed market standards. In addition, African markets, like other frontier or emerging

markets, tend to have less developed regulatory structures, and there are additional risks that

investors should consider such as the high cost of capital, relatively high inflation rates, and

currency fluctuations. Volatility is also an issue, Africa and frontier markets in general, havehigher volatility relative to developed markets. In general, it’s a good idea to consult your financial

advisor before investing in Africa or any other frontier or emerging markets.

For many investors, a wise “first step” into Africa can be taken through a diversified, professionally

managed fund that focuses on stocks of the highest quality companies. As the portfolio manager for

such a fund, I travel extensively to Africa on a frequent basis, mainly to visit companies. Of course,

I am also touring and studying the countries in which these companies are located. Because Africa

is changing faster than just about any other place on earth, I need to keep updating my knowledge

and “feel” for its macro, political and social structures.

Based on personal experience, here are a few attributes investors should look for in selecting

an African fund or manager:

Big-picture vision In addition to developing in-depth knowledge of how specific African

companies are run, we focus on company leadership and vision, the business

model, and how it fits into the bigger picture of African consumer and

infrastructure market developments. We seek to know the businesses in

which we invest. For example, a good percentage of African companies are

family controlled without the short term pressures of quick profits typical of

public companies. A recent study by Boston Consulting Group, a strategic

consulting company, finds that many CEOs for the largest African companies

have an average tenure of 9.4 years compared to 6.8 years for CEOs who runFortune 500 companies. The long tenures enable management to effect long

term visions into practice.

Feet-on-the-ground

research

Our company, Nile Capital Management, employs a dedicated analyst based in

Cape Town, South Africa, who organizes and conducts some of our research

coverage on the continent in a structured way. We work together to develop a

360-degree view of the continent, its national economies and leading public




companies. In addition, we have a vast network of local contacts in all the

markets where we invest.

High-growth

countries

Nile Capital Management combines top-down macroeconomic analysis and

bottom-up fundamental analysis. The first step in our investment process is to

develop a macroeconomic view and ranking of all 53 African countries. This

analysis helps to identify countries with sustained growth, political stability,

sound governments, strong economic policies and reliable regulatory/

governance frameworks. Based on this analysis, most of the companies we

currently like are in Africa’s “big four” economies – South Africa, Egypt,

Morocco and Nigeria. These four countries also represent geographic diversity,

including southern, western, and northern regions of the continent. Although

we are value investors (buy growth companies at value prices) we do not ignore

the macro economic environment in which we invest.

Enduring themes We believe in participating in Africa’s most compelling themes including

consumer growth, infrastructure growth and commodities. The urbanization

theme also is powerful because it is a measure of upward mobility in emerging

markets. It means more people can move off farms or from rural areas and into

urban areas with higher paying jobs, and this in turn creates upward mobility

and opportunities for companies to sell to a variety of consumer market

segments.

Long-term focus Finally, Africa represents an opportunity for patient investors who want to

diversify among a wider band of companies and are looking for long-termcapital growth. Some stocks in a diversified African portfolio will exceed

expectations and others will not, and that is the nature of all high-growth

emerging and frontier markets. For most investors, it makes sense to invest in

companies through a mutual fund, because researching Africa is more

challenging than most other parts of the world, including other emerging

markets.




I am originally from Uganda and I have spent most of my career managing global hedge fund assets as an

investment professional. In this line of work, I have been able to compare high-growth opportunities all

over the world, especially in global emerging markets.

I believe Africa is the world’s next great “BRIC-equivalent.” For that reason Nile Capital Management has

made the commitment in investment talent and resources essential to helping investors successfully

navigate the various markets in Africa.

In conclusion, it is a prudent idea to invest through a company that understands and has experience in

Africa and has made the commitment to invest its time and financial resources to visit Africa on a regular

basis. Nile Capital Management is the only US based Investment Adviser that exclusively focuses on

investing in Africa. Our company investment products provide investors an opportunity to build a globalportfolio that includes exposure to Africa.

Larry Seruma is the Chief Investment Officer and Managing Principal of Nile Capital Management.

Nile Capital Management, the Adviser to the Nile Africa series of funds, is a New York City based asset

management firm with in-depth investment expertise that covers the entire African Continent, from Cairo to

Cape Town. By focusing on Africa, the company seeks to identify and capitalize on the best investment

opportunities in the continent and expand investor’s access to emerging/frontier markets. Additional

information is available at www.nilefunds.com




References:

Chris, Alden. 2007. “China in Africa”. Published in association with the International African Institute,

the Royal African Society and the Social Science Research Council.

Babilis, Sofia and Valpy Fitzgerald. 2005. “Risk appetite, home bias and the unstable demand for

Emerging Market assets.” International Review of Applied Economics

Bigsten, Arne, Paul Collier, and et al. 2000. “Rates of return on physical and human capital in Africa’s

manufacturing sector.” Economic Development and Cultural Change

Collier, Paul and Jan Willem Gunning. 1999. “Explaining African Economic Performance.” Journal of

Economic Literature

Lucas, Robert B. 1990. “Why doesn’t capital flow from rich to poor countries?” American Economic

Review.

Maxim, Pinkovskiy, and Sala-i-Martin, Xavier. 2010. “African poverty is falling, much faster than you

think!” Massachusetss Institute of Technology, Columbia University and NBER

Seruma, Larry. 2001. “The case for an L-shaped economic recovery.” Barclays Global Investors

Seruma, Larry. 2000. “A review of the economics for search and block trading.” Barclays Global

Investors

Seruma, Larry. 1996. “A critical examination of the New York Stock Exchange “Uptick Rule”.” The

University of Chicago, Booth School of Business

Sharpe, William F. 1966. “Mutual Fund Performance” Journal of BusinessKaplan, Steven N. and Luigi Zing ales. 1997. “Do investment cash flow sensitivities provide useful

measures of financing constraints” Quarterly Journal of Economics

The Wall Street Journal. July 2010. “Bull’s eye on Africa: Carlyle chief sees upside”

Todd, Moss, Ramachandran Vijaya, and Standley Scott. 2007. “Why doesn’t Africa get more equity

investment? Frontier stock markets, firm size and asset allocations of global emerging market funds”

Center for Global Development.

Warnholz, Jean-Louis. 2008. Is investment in Africa low despite high profits? Centre for the Study of

African Economies. University of Oxford

Endnotes

Past performance does not guarantee future results




Definitions

Beta: A measure of the volatility of the portfolio in comparison to an index or the market as a whole

Treasury Bills (T-Bills): U.S. Government Treasury Bills

Volatility: The annualized standard deviation of the returns of a security

Correlation: The degree to which two or more attributes or measurements shows a tendency to vary

together

Frontier markets: Are defined by the IFC as smaller markets within the universe of emerging markets.

The typically have lower market capitalization and liquidity than developed or emerging markets. They

typically suit investors seeking high, long term returns and low correlations with other markets. They

typically have higher risk than developed or emerging markets

Rate of Return: The rate of return is calculated as investment income for the current year by the average

of foreign direct investment stock of the previous year and the current year. The figures for rate of return

are based on 39 countries in Africa, 33 Latin America and the Caribbean, 11 in West Asia and 18 in Asia.

Source: United Nations Conference on Trade and Development

S&P 500 Index: The S&P 500 Index is a large capitalization-weighted index of 500 widely held securities,

designed to measure broad US equity performance

MSCI EAFE Index: The MSCIEAFE index is a market capitalization weighted index designed to measure

the equity market performance of developed markets (Europe, Australasia, Far East), excluding the US &

Canada

MSCI EM Index: The MSCI EM index is a float-adjusted market capitalization index designed to measureequity market performance in global emerging markets. The index includes 26 emerging economies:

Brazil, Chile, China, Colombia, Czech Republic, Egypt, Hungary, India, Indonesia, Korea, Malaysia,

Mexico, Morocco, Peru, Philippines, Poland, Russia, South Africa, Taiwan, Thailand, Turkey

Index: It is not possible to invest directly in an index

Diversification: Diversification does not measure a profit or protect against a loss in a declining market

Russell 2000 Index: The Russell 2000 Index measures the performance of the 2,000 smallest companies in

the Russell 3000 index, and represents approximately 8% of the total market capitalization of the Russell

3000 Index, with all values expressed in US dollars

Risk Disclosures: Mutual Funds involve risk, including possible loss of principal. Because the Fund willinvest the majority of its assets in African companies, it is highly dependent on the state of the African

economy and the financial prospects of specific African companies. Certain African markets are in only

the earliest stages of development and may experience political and economic instability, capital market

restrictions, unstable governments, weaker economies and less developed legal systems with fewer

security holder rights. Adverse changes in currency exchange rates may erode or reverse any potential

gains from the Fund’s investments. Exchange Traded Funds are subject to specific risks, depending on

the nature of the underlying strategy of the fund. These risks could include liquidity risk, sector risk, as

well as risks associated with fixed income securities, real estate investments, and commodities, to name a



few. Non-diversification risk, as the Funds are more vulnerable to events affecting a single issuer.

Investments in underlying funds that own small and mid-capitalization companies may be morevulnerable than larger, more established organizations. The Fund’s exposure to companies primarily

engaged in the natural resource markets may subject the Fund to greater volatility than investments in a

wider variety of industries. There is a risk that issuers and counterparties will not make payments on

securities and other investments held by the Fund, resulting in losses to the Fund. In general, the price of

a fixed income security falls when interest rates rise. The Fund may invest, directly or indirectly, in "junk

bonds.” Such securities are speculative investments that carry greater risks than higher quality debt

securities.

CONTACT

152 West 57 Street, 32nd Floor

New York, NY 10019

Telephone: 1-877-68-AFRICA

Email: [email protected]

www.nilefunds.com

a time to invest in africa

Documents