Asia Frontier Capital

Investor Summary

Thomas Hugger founded Asia Frontier Capital in 2013 following a management buyout of Leopard Capital, establishing the firm as a leading specialist in Asian frontier market investing. As Founder, CEO, and Fund Manager, Hugger brings over 27 years of private banking experience since 1993 and more than 20 years specifically focused on frontier market investments. A Swiss national based in Hong Kong SAR, his career includes senior roles as Managing Partner at Leopard Capital and Managing Director at LGT Bank in Hong Kong. Under his leadership, the firm has achieved exceptional recognition including winning the Asian Frontier Fund of the Year at the Global Fund Awards 2016 and the AsianInvestor Asset Management Awards 2025 in the Emerging Market Equity category. Hugger has successfully navigated complex frontier market environments across 20 Asian countries, developing deep expertise in markets characterized by strong demographic trends and economic growth potential. His investment approach combines rigorous fundamental analysis with extensive local market presence, enabling direct engagement with portfolio companies and real-time assessment of market dynamics. The fund he manages has delivered three consecutive years of double-digit gains, achieving new all-time highs while maintaining attractive valuation metrics. His extensive knowledge spans Emerging and Frontier equity markets with particular expertise in Africa, Middle East, and Asia regions.

Fund Strategy

Asia Frontier Capital employs a distinctive hybrid investment approach combining top-down macroeconomic analysis with bottom-up fundamental research to capitalize on growth opportunities in Asian frontier markets. The firm focuses on identifying attractively valued companies based on three core criteria: earnings growth, free cash flow generation, and dividend yield. The investment strategy constructs portfolios using a core-satellite approach, building a foundation of large-cap, liquid stocks supplemented by mid and small-cap opportunities. Portfolio allocations strategically focus on Consumer Staples, Consumer Discretionary, Financials, and Infrastructure sectors, with country-specific emphasis on Textiles in Pakistan and Bangladesh, Tourism in Sri Lanka, Natural Resources in Mongolia and Papua New Guinea, and Power Generation in Laos. The fund leverages comprehensive in-house research, direct on-the-ground visits, and credible secondary sources to identify undervalued opportunities. The investment universe spans 20 frontier countries across Asia, targeting markets with favorable demographics, rising middle-class consumption, and structural economic reforms. This methodology enables the fund to deliver superior risk-adjusted returns while providing meaningful diversification benefits through exposure to high-growth economies trading at attractive valuations relative to emerging market peers.

ANNUALIZED SINCE INCEPTION	QUARTERLY	YTD
-	-	-

Executive Summary

Asia Frontier Capital's May 2026 newsletter highlights strong performance across frontier Asian markets despite elevated geopolitical risks from the Middle East conflict. The AFC Uzbekistan Fund returned +5.2% in May and +36.2% year-to-date, driven by the historic UzNIF IPO that raised USD 604 million with 4x oversubscription in London. The manager views Uzbekistan's accelerating capital markets development as transformational, with retail participation expanding from an extremely low base. Pakistan's KSE-100 Index has fully recovered conflict-related losses, supported by successful bond issuances and ongoing IMF-led reforms. Vietnam's economy shows impressive resilience with 19.7% export growth and record tourism, though the stock market exhibits a historic valuation disconnect with the AFC Vietnam Fund portfolio trading at 8.8x earnings versus 14x for the broader index despite delivering superior earnings growth. Iraq's banking sector is paying exceptionally large dividends with effective yields up to 19.5%. The manager remains optimistic about long-term prospects while acknowledging near-term geopolitical uncertainties, believing high-quality holdings and strong earnings growth will drive performance through volatility.

Forward Outlook

The manager remains optimistic about Asian frontier markets despite elevated geopolitical risks from the Middle East conflict. Uzbekistan's capital markets development is viewed as just the tip of the iceberg with significant upside as retail participation expands. Vietnam's economic fundamentals remain strong with the current valuation disconnect representing one of the most attractive long-term entry opportunities in recent years. Pakistan's macroeconomic gains and political stability position the market for new all-time highs if stable growth continues. Iraq's banking sector fundamentals and dividend yields remain compelling despite regional volatility. The manager acknowledges considerable risks from potential conflict escalation but believes the high quality of holdings and future earnings growth will drive performance over the long term.

Date	Letter	Tickers	Keywords	Pitches	Quick Takes
Jul 9 2026	2026 Q2	BBOB.IQ, BMNS.IQ, BNOI.IQ, IBSD IQ, TASC.IQ	Asia, Capital markets, dividends, Economic Growth, frontier markets, Geopolitical Risk, infrastructure, valuation	-	Asian frontier markets delivered strong May 2026 performance led by Uzbekistan's landmark UzNIF IPO and Pakistan's resilient recovery from Middle East conflict volatility. Uzbekistan's capital markets development is accelerating from an extremely low base while Vietnam shows a historic valuation disconnect with the fund's portfolio at 8.8x earnings despite 40% earnings growth. Iraq's banks are paying exceptional dividends. Geopolitical risks remain elevated but fundamentals and valuations support long-term conviction.
Apr 10 2026	2026 Q1	-	Asia, Conflict, diversification, energy, frontier markets, Geopolitical, Middle East, oil	-	AFC Asia Frontier Fund declined 7.9% in March due to Middle East conflict but outperformed benchmark. Two-week U.S.-Iran ceasefire creates opportunity for market rally, especially in energy-importing countries like Bangladesh, Pakistan, Sri Lanka, and Vietnam. Fund's diversified exposure across energy-importing and exporting countries provides resilience, with Iraq and Uzbekistan funds posting gains despite volatility.
Dec 31 2025	2025 Q4	COMB SL, FPT VN, HALYK KZ, HEMAS SL, K92 CN, KASPI KZ, KZAP KZ, LUCK PK, PSX PK	Asia, Domesticgrowth, frontier, Reform, Valuations	LUCK PK COMB SL FPT VN	AFC Asia Frontier Fund achieved 17.5% returns in 2025, its third consecutive year of double-digit gains, driven by broad-based performance across Pakistan, Sri Lanka, and gold mining positions. Despite reaching all-time high NAV, valuations remain attractive at 6.7x P/E. Managers express strong conviction for 2026, believing Asian frontier markets have entered a sustained multi-year upcycle.
Oct 9 2025	2025 Q3	HMKB, URTS	Asia, Bangladesh, Banking, frontier markets, gold, Iraq, Sri Lanka, Vietnam	MPC	AFC Asia Frontier Fund posted +5.0% in August, outperforming benchmarks as U.S. trade tensions eased. Strong performance driven by undervalued Bangladesh and Sri Lankan banks showing robust earnings recovery, Vietnam's record FDI and infrastructure boom, and thematic gold exposure. Portfolio positioned for continued outperformance with 36.8% financials allocation across recovering frontier economies.
Jun 30 2025	2025 Q2	HMKB, URTS	Asia, Bangladesh, Banking, frontier markets, Iraq, Mongolia, Sri Lanka, Vietnam	-	Asian frontier markets posted strong gains in August as U.S. trade uncertainties lifted. Bangladesh and Sri Lanka show clear recovery signals with banking sectors leading performance. Vietnam hits new highs on robust GDP growth and record FDI. Fund increased Bangladesh exposure at attractive valuations while Mongolian gold miners delivered outsized returns. Positive catalysts support continued outperformance.
Mar 31 2025	2025 Q1	AAPL, MSFT	Asia, Banking, diversification, frontier markets, oil, tariffs, Trade Policy, value	-	Asian frontier markets offer compelling diversification as South Asian and Central Asian economies show resilience to U.S. trade policy uncertainty. AFC's 63% regional allocation provides defensive positioning while attractive valuations persist despite recent rallies. Domestic-driven growth in Bangladesh, Pakistan, and Sri Lanka, combined with banking sector transformation, supports the investment thesis amid global volatility.
Dec 31 2024	2024 Q4	HAX, TLG	Asia, frontier markets, Iraq, monetary policy, Pakistan, Sri Lanka, Uzbekistan, Vietnam	-	AFC Asia Frontier Fund delivered 23.1% returns in 2024, the second consecutive year of strong outperformance. Pakistan and Sri Lanka led gains globally, driven by monetary easing and economic recovery. Vietnam achieved 7.0% GDP growth despite stock market underperformance. Fund maintains positive 2025 outlook across key markets with continued structural improvements and policy support.
Sep 30 2024	2024 Q3	-	Asia, Capital markets, frontier markets, Iraq, rates, Sri Lanka, Uzbekistan, Vietnam	-	Asian frontier markets are benefiting from the global monetary easing cycle, with regional central banks having cut rates before the Fed. Strong performance across AFC funds reflects positive developments in Sri Lanka's election outcome, Vietnam's economic fundamentals and FTSE upgrade prospects, and Uzbekistan's capital markets infrastructure progress, supporting the thesis for continued valuation re-rating.
Jun 30 2024	2024 Q2	HAX, MWG	active management, Asia, Banking, frontier markets, Iraq, Pakistan, Uzbekistan, Vietnam	-	Asian frontier markets delivered strong Q2 performance with AFC Asia Frontier Fund up 9.9% year-to-date. Vietnam's 6.9% GDP growth, Pakistan's rate cutting cycle, and Iraq's banking transformation drive the re-rating thesis. Active management continues outperforming as passive options disappear. Attractive valuations and structural tailwinds support continued outperformance expectations.
Mar 31 2024	2024 Q1	BBOB, BCOI, BMNS, BNOI, PTB	Asia, Banking, China, Exports, frontier markets, monetary policy, Tourism, Vietnam	-	AFC Asia Frontier Fund posted strong Q1 performance driven by monetary easing, earnings recovery, and discounted valuations across Asian frontier markets. Key contributors include Sri Lanka's tourism rebound, Vietnam's export recovery, and Iraq's banking transformation. The fund continues outperforming emerging market peers with selective positioning across 16 countries, expecting sustained re-rating momentum.
Nov 1 2024	2023 Q4	-	Asia, Banking, consumer, frontier markets, Iraq, materials, Mongolia	-	AFC Asia Frontier Fund posted +3.6% in December, capping a strong +27.1% year driven by Mongolia and Iraq outperformance. The diversified portfolio across 68 frontier Asian companies trades at attractive 6.83x P/E with significant exposure to consumer goods and materials. Manager actively deployed capital into Sri Lankan banking while adding to existing Mongolia positions.
Sep 30 2023	2023 Q3	FPT.VN, GMD.VN	Asia, Banking, diversification, frontier markets, Iraq, Outperformance, Trade Policy, Vietnam	-	AFC funds delivered strong diversification benefits with positive returns while global markets declined. The Asia Frontier Fund gained 3.5% in September, extending year-to-date outperformance to 19.3%. Enhanced U.S.-Vietnam partnership and continued monetary easing across the region support the thesis that Asian frontier markets offer superior risk-adjusted returns through this cycle.
Jul 31 2023	2023 Q2	FPT.VN, KSPI.L, STB.VN, VCB.VN	Agriculture, Asian Frontier Markets, inflation, infrastructure, insurance, monetary policy, re-rating, Tourism	-	Asian frontier markets continued their strong re-rating in July with AFC Asia Frontier Fund up 4.0% monthly and 11.7% year-to-date. Key drivers include declining inflation enabling monetary easing, robust tourism recovery in Sri Lanka, exceptional insurance sector earnings growth, infrastructure spending benefits, and strong agricultural export prices. The manager expects the rally to extend into 2024.
Apr 15 2023	2023 Q1	-	Asia, consumer, diversification, financials, frontier markets, Mongolia, Vietnam	-	AFC Asia Frontier Fund delivered modest March gains while maintaining strong long-term outperformance through diversified exposure to Asian frontier markets. The fund focuses on consumer and financial stocks across Vietnam, Mongolia, Iraq and other frontier economies, achieving lower volatility than traditional emerging markets while capitalizing on attractive valuations and growth opportunities.
Dec 1 2023	2022 Q4	-	-	-
Oct 11 2022	2022 Q3	-	-	-
Jun 30 2022	2022 Q2	-	-	-
Mar 30 2022	2022 Q1	-	-	-

Date

Letter

Tickers

Keywords

Pitches

Quick Takes

Jul 9 2026

2026 Q2

BBOB.IQ, BMNS.IQ, BNOI.IQ, IBSD IQ, TASC.IQ

Asia, Capital markets, dividends, Economic Growth, frontier markets, Geopolitical Risk, infrastructure, valuation

Asian frontier markets delivered strong May 2026 performance led by Uzbekistan's landmark UzNIF IPO and Pakistan's resilient recovery from Middle East conflict volatility. Uzbekistan's capital markets development is accelerating from an extremely low base while Vietnam shows a historic valuation disconnect with the fund's portfolio at 8.8x earnings despite 40% earnings growth. Iraq's banks are paying exceptional dividends. Geopolitical risks remain elevated but fundamentals and valuations support long-term conviction.

Apr 10 2026

2026 Q1

Asia, Conflict, diversification, energy, frontier markets, Geopolitical, Middle East, oil

AFC Asia Frontier Fund declined 7.9% in March due to Middle East conflict but outperformed benchmark. Two-week U.S.-Iran ceasefire creates opportunity for market rally, especially in energy-importing countries like Bangladesh, Pakistan, Sri Lanka, and Vietnam. Fund's diversified exposure across energy-importing and exporting countries provides resilience, with Iraq and Uzbekistan funds posting gains despite volatility.

Dec 31 2025

2025 Q4

COMB SL, FPT VN, HALYK KZ, HEMAS SL, K92 CN, KASPI KZ, KZAP KZ, LUCK PK, PSX PK

Asia, Domesticgrowth, frontier, Reform, Valuations

LUCK PK
COMB SL
FPT VN

AFC Asia Frontier Fund achieved 17.5% returns in 2025, its third consecutive year of double-digit gains, driven by broad-based performance across Pakistan, Sri Lanka, and gold mining positions. Despite reaching all-time high NAV, valuations remain attractive at 6.7x P/E. Managers express strong conviction for 2026, believing Asian frontier markets have entered a sustained multi-year upcycle.

Oct 9 2025

2025 Q3

HMKB, URTS

Asia, Bangladesh, Banking, frontier markets, gold, Iraq, Sri Lanka, Vietnam

MPC

AFC Asia Frontier Fund posted +5.0% in August, outperforming benchmarks as U.S. trade tensions eased. Strong performance driven by undervalued Bangladesh and Sri Lankan banks showing robust earnings recovery, Vietnam's record FDI and infrastructure boom, and thematic gold exposure. Portfolio positioned for continued outperformance with 36.8% financials allocation across recovering frontier economies.

Jun 30 2025

2025 Q2

HMKB, URTS

Asia, Bangladesh, Banking, frontier markets, Iraq, Mongolia, Sri Lanka, Vietnam

Asian frontier markets posted strong gains in August as U.S. trade uncertainties lifted. Bangladesh and Sri Lanka show clear recovery signals with banking sectors leading performance. Vietnam hits new highs on robust GDP growth and record FDI. Fund increased Bangladesh exposure at attractive valuations while Mongolian gold miners delivered outsized returns. Positive catalysts support continued outperformance.

Mar 31 2025

2025 Q1

AAPL, MSFT

Asia, Banking, diversification, frontier markets, oil, tariffs, Trade Policy, value

Asian frontier markets offer compelling diversification as South Asian and Central Asian economies show resilience to U.S. trade policy uncertainty. AFC's 63% regional allocation provides defensive positioning while attractive valuations persist despite recent rallies. Domestic-driven growth in Bangladesh, Pakistan, and Sri Lanka, combined with banking sector transformation, supports the investment thesis amid global volatility.

Dec 31 2024

2024 Q4

HAX, TLG

Asia, frontier markets, Iraq, monetary policy, Pakistan, Sri Lanka, Uzbekistan, Vietnam

AFC Asia Frontier Fund delivered 23.1% returns in 2024, the second consecutive year of strong outperformance. Pakistan and Sri Lanka led gains globally, driven by monetary easing and economic recovery. Vietnam achieved 7.0% GDP growth despite stock market underperformance. Fund maintains positive 2025 outlook across key markets with continued structural improvements and policy support.

Sep 30 2024

2024 Q3

Asia, Capital markets, frontier markets, Iraq, rates, Sri Lanka, Uzbekistan, Vietnam

Asian frontier markets are benefiting from the global monetary easing cycle, with regional central banks having cut rates before the Fed. Strong performance across AFC funds reflects positive developments in Sri Lanka's election outcome, Vietnam's economic fundamentals and FTSE upgrade prospects, and Uzbekistan's capital markets infrastructure progress, supporting the thesis for continued valuation re-rating.

Jun 30 2024

2024 Q2

HAX, MWG

active management, Asia, Banking, frontier markets, Iraq, Pakistan, Uzbekistan, Vietnam

Asian frontier markets delivered strong Q2 performance with AFC Asia Frontier Fund up 9.9% year-to-date. Vietnam's 6.9% GDP growth, Pakistan's rate cutting cycle, and Iraq's banking transformation drive the re-rating thesis. Active management continues outperforming as passive options disappear. Attractive valuations and structural tailwinds support continued outperformance expectations.

Mar 31 2024

2024 Q1

BBOB, BCOI, BMNS, BNOI, PTB

Asia, Banking, China, Exports, frontier markets, monetary policy, Tourism, Vietnam

AFC Asia Frontier Fund posted strong Q1 performance driven by monetary easing, earnings recovery, and discounted valuations across Asian frontier markets. Key contributors include Sri Lanka's tourism rebound, Vietnam's export recovery, and Iraq's banking transformation. The fund continues outperforming emerging market peers with selective positioning across 16 countries, expecting sustained re-rating momentum.

Nov 1 2024

2023 Q4

Asia, Banking, consumer, frontier markets, Iraq, materials, Mongolia

AFC Asia Frontier Fund posted +3.6% in December, capping a strong +27.1% year driven by Mongolia and Iraq outperformance. The diversified portfolio across 68 frontier Asian companies trades at attractive 6.83x P/E with significant exposure to consumer goods and materials. Manager actively deployed capital into Sri Lankan banking while adding to existing Mongolia positions.

Sep 30 2023

2023 Q3

FPT.VN, GMD.VN

Asia, Banking, diversification, frontier markets, Iraq, Outperformance, Trade Policy, Vietnam

AFC funds delivered strong diversification benefits with positive returns while global markets declined. The Asia Frontier Fund gained 3.5% in September, extending year-to-date outperformance to 19.3%. Enhanced U.S.-Vietnam partnership and continued monetary easing across the region support the thesis that Asian frontier markets offer superior risk-adjusted returns through this cycle.

Jul 31 2023

2023 Q2

FPT.VN, KSPI.L, STB.VN, VCB.VN

Agriculture, Asian Frontier Markets, inflation, infrastructure, insurance, monetary policy, re-rating, Tourism

Asian frontier markets continued their strong re-rating in July with AFC Asia Frontier Fund up 4.0% monthly and 11.7% year-to-date. Key drivers include declining inflation enabling monetary easing, robust tourism recovery in Sri Lanka, exceptional insurance sector earnings growth, infrastructure spending benefits, and strong agricultural export prices. The manager expects the rally to extend into 2024.

Apr 15 2023

2023 Q1

Asia, consumer, diversification, financials, frontier markets, Mongolia, Vietnam

AFC Asia Frontier Fund delivered modest March gains while maintaining strong long-term outperformance through diversified exposure to Asian frontier markets. The fund focuses on consumer and financial stocks across Vietnam, Mongolia, Iraq and other frontier economies, achieving lower volatility than traditional emerging markets while capitalizing on attractive valuations and growth opportunities.

Dec 1 2023

Oct 11 2022

Jun 30 2022

Mar 30 2022

QUARTER	THEMES	TAGS
2026 Q2	Capital Markets Uzbekistan's capital markets reached a historic milestone with the UzNIF IPO listing simultaneously on London and Tashkent exchanges, raising USD 604 million with 4x oversubscription in London. Retail investor participation is accelerating rapidly from a very low base of under 50,000 active brokerage accounts, with one platform seeing 4,800 local investors subscribe. The manager views this as the beginning of a multi-year capital markets development cycle that will drive equity valuations higher as participation expands.	IPO Uzbekistan Retail Participation Tashkent Stock Exchange
	Dividends Iraqi banks are paying exceptionally large dividends, with Bank of Baghdad announcing a 12.1% cash dividend yield and Asiacell 8.7%, following earlier dividends from Mansour Bank (19.5% effective yield) and National Bank of Iraq (9.5% effective yield). The manager describes these as humongous dividends that are boosting market performance and expects Baghdad Soft Drinks to repeat last year's 7.5% dividend yield.	Iraq Banks Cash Dividends Yield
	Infrastructure Spending Vietnam is entering one of the largest infrastructure expansion cycles in its modern history, including Hanoi's USD 30 billion Red River Boulevard project, Long Thanh International Airport, North-South Expressway network, metro systems, and deep-sea ports. The manager believes these multi-billion-dollar investments will lay the foundation for a long-term productivity expansion cycle and support Vietnam's ambitious target of 10% annual GDP growth during 2026-2030.	Vietnam Infrastructure Productivity GDP Growth
	Oil The Middle East conflict that began on February 28, 2026 has created elevated oil prices and geopolitical uncertainty. However, Vietnam has secured domestic fuel supply through July 2026 and maintained stable gasoline prices despite volatility. Oman's geographical advantage outside the Strait of Hormuz has allowed its oil production to remain flat while GCC peers saw large declines. The manager is monitoring the situation closely as a key risk factor across the portfolio.	Middle East Geopolitical Risk Energy Security Strait of Hormuz
	Pakistan Pakistan's KSE-100 Index has recovered all losses from the March 2026 Middle East conflict correction and is now 3.3% higher than pre-conflict levels, supported by ongoing IMF-led reforms, macroeconomic stability, and political stability. The country successfully raised USD 750 million in USD bonds (50% oversubscribed) and CNY 8.8 billion in its first CNY bond (5x oversubscribed) after the conflict began, demonstrating strong investor confidence. The manager expects new all-time highs if Pakistan can sustain stable economic growth.	Macroeconomic Stability IMF Reforms Bond Issuance Political Stability
	Vietnam Vietnam's economy demonstrated impressive resilience with 19.7% export growth, 11.1% retail sales growth, and record tourism of 8.8 million visitors in the first four months of 2026. FDI registrations rose 32% to USD 18.2 billion. However, the stock market shows a historic valuation disconnect, with the VN-Index trading at 14x earnings while the AFC Vietnam Fund portfolio trades at only 8.8x earnings despite delivering 40% Q1 earnings growth versus 30% for the broader market. The manager views this as one of the most attractive long-term entry opportunities in recent years.	Economic Growth Valuation Disconnect Exports Tourism
	Uzbekistan Uzbekistan posted 8.7% GDP growth in Q1 2026 and is experiencing strong economic and reform momentum. The UzNIF IPO marked a watershed moment for the country's capital markets, with the London tranche 4x oversubscribed. The manager notes that with only 50,000 active brokerage accounts in a country of 38 million people, there is enormous potential for capital markets development. The AFC Uzbekistan Fund returned +36.2% year-to-date through May 2026.	GDP Growth Reforms Capital Markets Development Retail Participation
	Rates Central banks in Georgia, Pakistan, and Sri Lanka raised benchmark interest rates by 25-100 basis points in response to elevated oil prices and inflation concerns from the Middle East conflict. The manager views these as very good moves demonstrating commitment to macroeconomic stability. In contrast, Kazakhstan's central bank reduced rates by 100 basis points to 17.0% as inflation eases due to base effects and Tenge appreciation from higher oil prices.	Central Banks Interest Rates Inflation Monetary Policy
2025 Q4	Pakistan Pakistan's recovery gained strong traction in 2025 following significant interest rate reductions. Lucky Cement and Pakistan Stock Exchange led performance, with the fund maintaining Pakistan as its highest country weight for a second consecutive year amid expectations of a multi-year bull market driven by macroeconomic and political stability.	Pakistan Lucky Cement Interest Rates Recovery Cement
	Sri Lanka Sri Lanka's gains were broad-based, led by Commercial Bank of Ceylon and Hemas Holdings. The fund remains positive on Sri Lanka not just in 2026 but over the next three to five years, as the country now has both economic and political stability after a long time, providing a solid platform for continued economic growth.	Sri Lanka Commercial Bank Hemas Holdings Political Stability Economic Recovery
	Gold The fund's Mongolian gold mining holdings did exceptionally well in 2025, buoyed by the rising gold price. Gold producer K92 Mining in Papua New Guinea also benefitted from higher gold prices. Gold stocks represent a thematic allocation that is part of the fund's investment strategy.	Gold Mining Mongolia Papua New Guinea Commodity Prices
	Banking Banking holdings performed strongly across multiple markets. Commercial Bank of Ceylon achieved 52% profit growth with ROE restored to 21%, while Georgian banks Lion Finance and TBC Bank delivered ROEs of 28% and 24% respectively. Halyk Bank in Kazakhstan showed 27% net profit growth with a 34% ROE.	Banking ROE Profit Growth Georgia Kazakhstan
	Uzbekistan The AFC Uzbekistan Fund saw a turnaround in performance in the second half of 2025 as GDP growth picked up steam at 7.6% for the first nine months. The fund expects there could be a large re-rating in Uzbek equities in 2026 and beyond, given companies are still trading at extremely low single-digit P/E ratios.	Uzbekistan GDP Growth Valuations Re-rating Economic Growth
	Vietnam FPT Corp, the fund's largest Vietnam position and the country's largest software outsourcing company, corrected in 2025 due to concerns over customers' IT spending decisions. However, the company is seeing a pick-up in momentum in its order book from the second half of 2025, which portends well for 2026 earnings outlook.	Vietnam FPT Corp Software IT Spending Order Book
2025 Q3	Bangladesh Bangladesh economy and stock market have bottomed out with multiple positive catalysts in place for near-term re-rating. Current account now in surplus, exports and remittance growth continuing momentum, inflation and interest rates appearing to have peaked. Parliamentary elections scheduled for February 2026 provide additional positive trigger.	Banking Elections Recovery Valuations Exports
	Sri Lanka Sri Lankan banks posted stellar earnings growth with Commercial Bank of Ceylon and Hatton National Bank reporting 103% and 37% net profit growth respectively. Economy is on firm economic footing with banks' return on equity back to pre-crisis levels, making valuations attractive relative to history.	Banking Recovery Earnings Valuations Crisis
	Vietnam Vietnam's stock market reached new all-time highs driven by robust liquidity and accommodative monetary policy. Credit growth surpassed 10% in first seven months, GDP growth of 7.52% in first half with government raising 2025 target to 8.3-8.5%. Record FDI inflows of USD 21.5 billion and USD 48 billion infrastructure program launched.	GDP Infrastructure FDI Credit Liquidity
	Gold Mongolian gold mining stocks continue to add to overall fund performance with August being outstanding month for stock price returns. This reflects thematic themes in portfolio that can generate outsized returns.	Mining Mongolia Commodities Performance Thematic
	Iraq Baghdad experiencing construction boom driven by country's stability and drawing foreign investment. Market's technical picture continues to be positive with RSISX USD Index consolidating gains from December 2024 rally. Summer holidays and Arbaeen pilgrimage did not exert usual subduing effects on market turnover.	Construction Stability Investment Technical Consolidation
2025 Q2	Bangladesh Bangladesh economy and stock market have bottomed out with multiple positive catalysts in place for near-future re-rating. Current account now in surplus, exports and remittance growth continuing momentum, inflation and interest rates appearing to have peaked. Parliamentary elections scheduled for February 2026 provide additional positive trigger.	Banking Elections Recovery Valuations Exports
	Sri Lanka Sri Lankan banks posted stellar earnings growth with Commercial Bank of Ceylon and Hatton National Bank reporting 103% and 37% net profit growth respectively. Economy is on firm economic footing with banks' return on equity back to pre-crisis levels, making valuations attractive relative to history.	Banking Recovery Earnings Valuations ROE
	Vietnam Vietnam's stock market reached new all-time highs driven by robust liquidity and accommodative monetary policy. Credit growth surpassed 10% in first seven months, GDP growth of 7.52% in first half with government raising 2025 target to 8.3-8.5%. Record FDI inflows of USD 21.5 billion and major infrastructure program worth USD 48 billion launched.	GDP Growth FDI Infrastructure Credit Growth Liquidity
	Iraq Baghdad experiencing construction boom driven by country's stability and foreign investment. Market's technical picture remains positive with RSISX USD Index consolidating gains from December 2024's 35.9% three-month rally. Summer holidays and Arbaeen pilgrimage did not subdue market turnover as in prior years.	Construction Stability Foreign Investment Technical Consolidation
	Gold Mongolian gold mining stocks continue to add to overall fund performance with August being outstanding month for stock price returns. This reflects thematic themes in portfolio that can generate outsized returns.	Mining Mongolia Outperformance Thematic Returns
2025 Q1	Trade Policy U.S. reciprocal tariffs pose varying impacts across Asian frontier markets, with South Asian and Central Asian countries relatively better positioned due to low export dependence on the U.S. Vietnam faces significant challenges with a 46% tariff but is actively negotiating for reductions.	Tariffs Trade Exports Negotiations Economic Impact
	Diversification AFC Asia Frontier Fund offers true diversification benefits with 63% exposure to South Asian and Central Asian markets that are less correlated to U.S. trade policies and global market volatility. The fund demonstrates lower correlation with MSCI World Index at 0.48.	Portfolio Correlation Risk Management Geographic Allocation
	Value Asian frontier markets continue to offer attractive valuations despite recent rallies, with the AFC Asia Frontier Fund trading at all-time low P/E ratios while reaching new NAV highs. Examples include Halyk Bank trading at 3.6x 2025 P/E with 14.2% dividend yield.	Valuations P/E Ratios Dividend Yields Undervalued Opportunities
	Oil Oil price expectations have shifted to the lower end of a three-year range due to OPEC+ production increases and expected weaker global demand from tariffs. This impacts Iraq's oil export revenues, potentially reducing them by 16% in 2025, though the country maintains strong financial position.	OPEC Production Revenues Prices Energy
	Banking Financial services holdings continue to thrive across the portfolio, with strong performance from banks in Kazakhstan, Georgia, and Uzbekistan. The sector benefits from structural transformation and adoption of banking services in these developing economies.	Financial Services Structural Transformation Growth Adoption
2024 Q4	Pakistan Pakistan was the second best-performing stock market globally in 2024. The State Bank of Pakistan aggressively cut interest rates by 900 basis points since June 2024 as inflation declined significantly. This monetary easing supports corporate profitability, economic rebound, and investor sentiment as fixed income becomes less attractive.	Monetary Policy Interest Rates Inflation Economic Recovery Corporate Profitability
	Sri Lanka Sri Lanka delivered a superb rally with the Colombo All Share Index gaining 20.9% in December 2024. Key tailwinds include strong economic recovery led by tourism and domestic consumption, ongoing success of the IMF program, credit rating upgrades by Fitch and Moody's, and political and economic stability following parliamentary elections.	Economic Recovery Tourism IMF Program Credit Rating Political Stability
	Vietnam Vietnam achieved remarkable economic success with estimated 7.0% GDP growth in 2024, the highest in the region. Record export turnover of USD 404bn, industrial production recovery of 8.3%, and record FDI disbursements of USD 24.8bn drove performance. However, the VN-Index underperformed due to foreign selling and real estate sector concerns.	GDP Growth Exports FDI Industrial Production Economic Recovery
	Iraq Iraq experienced two gangbuster years with the AFC Iraq Fund gaining 43.5% in 2024 following 110.4% in 2023. Key dynamics include cumulative positive effects of relative stability creating predictable macroeconomic framework and structural banking developments accelerating adoption and transformation of the sector.	Political Stability Banking Transformation Economic Framework Corporate Profits
	Uzbekistan Uzbekistan faced a challenging year with the fund declining 27.8% in 2024 despite strong economic fundamentals. Market developments include government formation of investment vehicle with Franklin Templeton, oversubscribed Uzbek Commodity Exchange offering, and Bloomberg integration. The market appears to be in a bottoming process with renewed investor interest.	Capital Markets Infrastructure Development Market Development Investment Vehicle
2024 Q3	Rates The start of the U.S. Fed easing cycle is positive for frontier and emerging markets. Asian frontier central banks began reducing interest rates well before September 2024, and a more dovish Fed will reduce pressure on these central banks. Lower interest rates will feed into corporate profitability and support re-rating of discounted valuations.	Interest Rates Monetary Policy Fed Central Banks Easing
	Capital Markets Uzbekistan is moving closer to a phase change in capital markets with OTP Bank joining the sandbox regime and government announcing secondary offering of Uzbek Commodity Exchange. Infrastructure developments include custody solutions and plans for Bloomberg quotes, which should increase capital flows into the market.	Sandbox Custody Infrastructure Liquidity Foreign Investment
	Vietnam Vietnam's economy shows strong fundamentals with 9.5% Industrial Production Index growth, record trade surplus of USD 19.1 billion, and FDI disbursement reaching USD 14.15 billion. The Non-Pre-funding Circular and Fed rate cuts create positive momentum for FTSE emerging market upgrade and sustained market growth.	GDP Growth Trade Surplus FDI FTSE Upgrade Emerging Markets
	Sri Lanka Presidential election resulted in AKD's victory, with the new administration committing to the IMF program framework and debt restructuring. The Colombo Stock Exchange rallied post-election as investors factored in the balanced stance toward economic reforms and continued stability.	Presidential Election IMF Program Debt Restructuring Economic Recovery Political Stability
2024 Q2	Banking Iraq's banking sector is undergoing structural transformation with significant increases in bank account openings, card issuance, and digital payment adoption. The Central Bank of Iraq data shows 51% growth in bank accounts and 115% growth in point-of-sale terminals in 2023, reflecting a shift from cash to formal banking systems.	Banking Digital Payments Financial Inclusion Iraq Transformation
	Vietnam Vietnam reported strong Q2 2024 GDP growth of 6.9% driven by manufacturing and services recovery. Export growth has rebounded strongly since September 2023, with June 2024 exports up 10.5%, while FDI disbursement reached record highs of USD 10.8 billion.	Vietnam GDP Growth Exports Manufacturing FDI
	Insurance Vietnam's non-life insurance sector shows attractive growth potential despite life insurance challenges. The market is projected to grow from USD 2.8 billion to USD 28 billion by 2030, with foreign strategic investors entering the sector and companies trading at low valuations.	Insurance Non-life Insurance Vietnam Growth Valuations
	Rates Pakistan's central bank cut benchmark interest rates by 150 basis points from 22% in June 2024, marking the start of an easing cycle as inflation moderates. Lower rates are expected to boost corporate profitability and stock market sentiment in Pakistan.	Interest Rates Pakistan Monetary Policy Inflation Easing
2024 Q1	Monetary Policy Central banks across Asian frontier markets have been cutting interest rates significantly since H2 2023, with Sri Lanka cutting 700 basis points over twelve months, Mongolia cutting 100 basis points, and Georgia cutting 75 basis points. This monetary easing is a key driver of the rally in Asian frontier markets.	Interest Rates Central Banks Monetary Easing Policy Inflation
	Tourism Sri Lanka's tourism recovery is accelerating with monthly arrivals exceeding 200,000 between December 2023-March 2024, putting the country on track to return to pre-pandemic levels by end-2024. This recovery is helping build foreign exchange reserves and supporting currency appreciation.	Travel Recovery Foreign Exchange Sri Lanka Arrivals
	Banking Iraqi banks experienced spectacular growth with the top four banks showing stellar year-over-year performance driven by Central Bank of Iraq's new procedural requirements for USD provisioning. Vietnamese banks are being reassessed following strong performance in early 2024.	Banks Iraq Vietnam Growth Regulations
	China Uzbekistan has made a lightning-fast pivot to China since early 2024, with massive Chinese investment deals announced across electricity generation, battery storage, mining, logistics, metal fabrication, auto production, and textiles. This represents a strategic balancing of influence in the region.	Investment Geopolitics Infrastructure Manufacturing Uzbekistan
	Exports Vietnam's export sector is recovering strongly with 17% growth in Q1 2024, led by furniture exports which increased 74% in January-February. Bangladesh exports also gained momentum with 11.1% growth in Q1 2024, driven by garment exports as the country benefits from global supply chain relocation.	Trade Manufacturing Recovery Vietnam Bangladesh
2023 Q4	Mongolia Mongolia was the best-performing market in December with an 11.8% gain. The fund's top-performing stocks included multiple Mongolian companies: a coking coal producer (+81.4%), a junior miner (+60.0%), a convenience store operator (+24.5%), and a technology company (+12.5%). The fund added to existing positions in Mongolia during the month.	Coking Coal Junior Miners Convenience Stores Technology
	Iraq Iraq was the second-best performing market in December with a 6.2% gain. The country represents the largest allocation in the portfolio at 17.6% of assets, indicating significant exposure to Iraqi markets.	Oil Energy
	Banking The fund invested in a Sri Lankan bank during December and holds a bank in Kazakhstan as one of its two biggest positions at 4.4%. Banking represents exposure to the financial sector across frontier Asian markets.	Regional Banks Emerging Markets
2023 Q3	Diversification AFC funds demonstrated strong diversification benefits with positive returns while global benchmarks posted negative returns. The AFC Asia Frontier Fund outperformed global benchmarks for the second consecutive month, highlighting the value of Asian frontier market exposure for portfolio diversification.	Outperformance Benchmarks Portfolio Risk Correlation
	Trade Policy U.S. President Biden's visit to Vietnam elevated the partnership to Comprehensive Strategic Partnership status, placing the U.S. among Vietnam's top-tier partners. This strengthens economic ties and creates opportunities for technology transfer and supply chain diversification.	Partnership Technology Supply Chain Investment Relations
	Rates Central banks across Asian frontier markets continued cutting interest rates as inflation eased. Sri Lanka cut rates by 100 basis points and Kazakhstan reduced rates by 50 basis points, supporting economic recovery and market re-rating.	Central Bank Monetary Policy Inflation Economic Recovery Stimulus
	Banking Iraqi banks are positioned to benefit from increased adoption of banking and growth in private sector lending. Bank lending to private sector increased 11% year-to-date, supporting economic growth and money circulation expansion.	Credit Growth Private Sector Deposits Economic Growth Financial System
2023 Q2	Inflation Inflation is peaking across Asian frontier markets, with Sri Lanka reaching single digits at 6.3% in July. This steep drop allows central banks to continue monetary easing policies, with the Central Bank of Sri Lanka expected to cut rates by another 300-400 basis points by year-end.	Monetary Policy Interest Rates Central Banks Economic Recovery
	Tourism Sri Lanka tourist arrivals in July 2023 reached 66% of pre-pandemic levels with strong bookings for the upcoming peak season in Q4 2023/Q1 2024. The ongoing recovery in tourist arrivals is robust and supporting the economic recovery.	Travel Recovery Economic Recovery Sri Lanka Hospitality
	Insurance The insurance sector significantly benefits from the high-interest rate environment and overall economic recovery post-pandemic. Vietnamese insurance companies showed remarkable earnings growth in Q2 with PVI, ABI, BIC, and MIG reporting growth of 61%, 97%, 189%, and 273% respectively.	Financial Services Earnings Growth Vietnam Interest Rates
	Infrastructure Spending Construction companies operating in public investment are beneficiaries of government deployment of large-scale projects, particularly highway construction, airports, and power infrastructure. Vietnam's 'highway era' provides significant opportunities for the next five years.	Public Investment Construction Government Spending Vietnam
	Agriculture Global rice market conditions favor Vietnam as the second-largest rice exporter. El Nino phenomenon and geopolitical factors have led to substantial rice price increases, with Vietnamese rice export prices jumping from USD 470 to USD 600 per ton, and first half 2023 export value reaching a record high.	Rice Exports Commodity Prices Vietnam Global Trade
2023 Q1	Frontier Markets The fund focuses on Asian frontier markets including Bangladesh, Cambodia, Georgia, Iraq, Jordan, Kazakhstan, and others. Portfolio diversification across these markets has resulted in lower risk with 10.6% annualized volatility. The fund outperformed its benchmark significantly since inception.	Asia Emerging Diversification Volatility
	Consumer The fund focuses primarily on consumer-related stocks as part of its investment strategy. Consumer goods represents the largest sector allocation at 20.9% of assets.	Retail Goods Allocation
	Financials Financials represent 13.8% of the fund's allocation. The top performer in March was a Sri Lankan bank that gained 28.6%.	Banks Allocation Performance

QUARTER

THEMES

Capital Markets

Uzbekistan's capital markets reached a historic milestone with the UzNIF IPO listing simultaneously on London and Tashkent exchanges, raising USD 604 million with 4x oversubscription in London. Retail investor participation is accelerating rapidly from a very low base of under 50,000 active brokerage accounts, with one platform seeing 4,800 local investors subscribe. The manager views this as the beginning of a multi-year capital markets development cycle that will drive equity valuations higher as participation expands.

IPO Uzbekistan Retail Participation Tashkent Stock Exchange

Dividends

Iraqi banks are paying exceptionally large dividends, with Bank of Baghdad announcing a 12.1% cash dividend yield and Asiacell 8.7%, following earlier dividends from Mansour Bank (19.5% effective yield) and National Bank of Iraq (9.5% effective yield). The manager describes these as humongous dividends that are boosting market performance and expects Baghdad Soft Drinks to repeat last year's 7.5% dividend yield.

Iraq Banks Cash Dividends Yield

Infrastructure Spending

Vietnam is entering one of the largest infrastructure expansion cycles in its modern history, including Hanoi's USD 30 billion Red River Boulevard project, Long Thanh International Airport, North-South Expressway network, metro systems, and deep-sea ports. The manager believes these multi-billion-dollar investments will lay the foundation for a long-term productivity expansion cycle and support Vietnam's ambitious target of 10% annual GDP growth during 2026-2030.

Vietnam Infrastructure Productivity GDP Growth

Oil

The Middle East conflict that began on February 28, 2026 has created elevated oil prices and geopolitical uncertainty. However, Vietnam has secured domestic fuel supply through July 2026 and maintained stable gasoline prices despite volatility. Oman's geographical advantage outside the Strait of Hormuz has allowed its oil production to remain flat while GCC peers saw large declines. The manager is monitoring the situation closely as a key risk factor across the portfolio.

Middle East Geopolitical Risk Energy Security Strait of Hormuz

Pakistan

Pakistan's KSE-100 Index has recovered all losses from the March 2026 Middle East conflict correction and is now 3.3% higher than pre-conflict levels, supported by ongoing IMF-led reforms, macroeconomic stability, and political stability. The country successfully raised USD 750 million in USD bonds (50% oversubscribed) and CNY 8.8 billion in its first CNY bond (5x oversubscribed) after the conflict began, demonstrating strong investor confidence. The manager expects new all-time highs if Pakistan can sustain stable economic growth.

Macroeconomic Stability IMF Reforms Bond Issuance Political Stability

Vietnam

Vietnam's economy demonstrated impressive resilience with 19.7% export growth, 11.1% retail sales growth, and record tourism of 8.8 million visitors in the first four months of 2026. FDI registrations rose 32% to USD 18.2 billion. However, the stock market shows a historic valuation disconnect, with the VN-Index trading at 14x earnings while the AFC Vietnam Fund portfolio trades at only 8.8x earnings despite delivering 40% Q1 earnings growth versus 30% for the broader market. The manager views this as one of the most attractive long-term entry opportunities in recent years.

Economic Growth Valuation Disconnect Exports Tourism

Uzbekistan

Uzbekistan posted 8.7% GDP growth in Q1 2026 and is experiencing strong economic and reform momentum. The UzNIF IPO marked a watershed moment for the country's capital markets, with the London tranche 4x oversubscribed. The manager notes that with only 50,000 active brokerage accounts in a country of 38 million people, there is enormous potential for capital markets development. The AFC Uzbekistan Fund returned +36.2% year-to-date through May 2026.

GDP Growth Reforms Capital Markets Development Retail Participation

Rates

Central banks in Georgia, Pakistan, and Sri Lanka raised benchmark interest rates by 25-100 basis points in response to elevated oil prices and inflation concerns from the Middle East conflict. The manager views these as very good moves demonstrating commitment to macroeconomic stability. In contrast, Kazakhstan's central bank reduced rates by 100 basis points to 17.0% as inflation eases due to base effects and Tenge appreciation from higher oil prices.

Central Banks Interest Rates Inflation Monetary Policy

2025 Q4

Pakistan

Pakistan's recovery gained strong traction in 2025 following significant interest rate reductions. Lucky Cement and Pakistan Stock Exchange led performance, with the fund maintaining Pakistan as its highest country weight for a second consecutive year amid expectations of a multi-year bull market driven by macroeconomic and political stability.

Pakistan Lucky Cement Interest Rates Recovery Cement

Sri Lanka

Sri Lanka's gains were broad-based, led by Commercial Bank of Ceylon and Hemas Holdings. The fund remains positive on Sri Lanka not just in 2026 but over the next three to five years, as the country now has both economic and political stability after a long time, providing a solid platform for continued economic growth.

Sri Lanka Commercial Bank Hemas Holdings Political Stability Economic Recovery

Gold

The fund's Mongolian gold mining holdings did exceptionally well in 2025, buoyed by the rising gold price. Gold producer K92 Mining in Papua New Guinea also benefitted from higher gold prices. Gold stocks represent a thematic allocation that is part of the fund's investment strategy.

Gold Mining Mongolia Papua New Guinea Commodity Prices

Banking

Banking holdings performed strongly across multiple markets. Commercial Bank of Ceylon achieved 52% profit growth with ROE restored to 21%, while Georgian banks Lion Finance and TBC Bank delivered ROEs of 28% and 24% respectively. Halyk Bank in Kazakhstan showed 27% net profit growth with a 34% ROE.

Banking ROE Profit Growth Georgia Kazakhstan

Uzbekistan

The AFC Uzbekistan Fund saw a turnaround in performance in the second half of 2025 as GDP growth picked up steam at 7.6% for the first nine months. The fund expects there could be a large re-rating in Uzbek equities in 2026 and beyond, given companies are still trading at extremely low single-digit P/E ratios.

Uzbekistan GDP Growth Valuations Re-rating Economic Growth

Vietnam

FPT Corp, the fund's largest Vietnam position and the country's largest software outsourcing company, corrected in 2025 due to concerns over customers' IT spending decisions. However, the company is seeing a pick-up in momentum in its order book from the second half of 2025, which portends well for 2026 earnings outlook.

Vietnam FPT Corp Software IT Spending Order Book

2025 Q3

Bangladesh

Bangladesh economy and stock market have bottomed out with multiple positive catalysts in place for near-term re-rating. Current account now in surplus, exports and remittance growth continuing momentum, inflation and interest rates appearing to have peaked. Parliamentary elections scheduled for February 2026 provide additional positive trigger.

Banking Elections Recovery Valuations Exports

Sri Lanka

Sri Lankan banks posted stellar earnings growth with Commercial Bank of Ceylon and Hatton National Bank reporting 103% and 37% net profit growth respectively. Economy is on firm economic footing with banks' return on equity back to pre-crisis levels, making valuations attractive relative to history.

Banking Recovery Earnings Valuations Crisis

Vietnam

Vietnam's stock market reached new all-time highs driven by robust liquidity and accommodative monetary policy. Credit growth surpassed 10% in first seven months, GDP growth of 7.52% in first half with government raising 2025 target to 8.3-8.5%. Record FDI inflows of USD 21.5 billion and USD 48 billion infrastructure program launched.

GDP Infrastructure FDI Credit Liquidity

Gold

Mongolian gold mining stocks continue to add to overall fund performance with August being outstanding month for stock price returns. This reflects thematic themes in portfolio that can generate outsized returns.

Mining Mongolia Commodities Performance Thematic

Iraq

Baghdad experiencing construction boom driven by country's stability and drawing foreign investment. Market's technical picture continues to be positive with RSISX USD Index consolidating gains from December 2024 rally. Summer holidays and Arbaeen pilgrimage did not exert usual subduing effects on market turnover.

Construction Stability Investment Technical Consolidation

2025 Q2

Bangladesh

Bangladesh economy and stock market have bottomed out with multiple positive catalysts in place for near-future re-rating. Current account now in surplus, exports and remittance growth continuing momentum, inflation and interest rates appearing to have peaked. Parliamentary elections scheduled for February 2026 provide additional positive trigger.

Banking Elections Recovery Valuations Exports

Sri Lanka

Banking Recovery Earnings Valuations ROE

Vietnam

GDP Growth FDI Infrastructure Credit Growth Liquidity

Iraq

Baghdad experiencing construction boom driven by country's stability and foreign investment. Market's technical picture remains positive with RSISX USD Index consolidating gains from December 2024's 35.9% three-month rally. Summer holidays and Arbaeen pilgrimage did not subdue market turnover as in prior years.

Construction Stability Foreign Investment Technical Consolidation

Gold

Mining Mongolia Outperformance Thematic Returns

2025 Q1

Trade Policy

U.S. reciprocal tariffs pose varying impacts across Asian frontier markets, with South Asian and Central Asian countries relatively better positioned due to low export dependence on the U.S. Vietnam faces significant challenges with a 46% tariff but is actively negotiating for reductions.

Tariffs Trade Exports Negotiations Economic Impact

Diversification

AFC Asia Frontier Fund offers true diversification benefits with 63% exposure to South Asian and Central Asian markets that are less correlated to U.S. trade policies and global market volatility. The fund demonstrates lower correlation with MSCI World Index at 0.48.

Portfolio Correlation Risk Management Geographic Allocation

Value

Asian frontier markets continue to offer attractive valuations despite recent rallies, with the AFC Asia Frontier Fund trading at all-time low P/E ratios while reaching new NAV highs. Examples include Halyk Bank trading at 3.6x 2025 P/E with 14.2% dividend yield.

Valuations P/E Ratios Dividend Yields Undervalued Opportunities

Oil

Oil price expectations have shifted to the lower end of a three-year range due to OPEC+ production increases and expected weaker global demand from tariffs. This impacts Iraq's oil export revenues, potentially reducing them by 16% in 2025, though the country maintains strong financial position.

OPEC Production Revenues Prices Energy

Banking

Financial services holdings continue to thrive across the portfolio, with strong performance from banks in Kazakhstan, Georgia, and Uzbekistan. The sector benefits from structural transformation and adoption of banking services in these developing economies.

Financial Services Structural Transformation Growth Adoption

2024 Q4

Pakistan

Pakistan was the second best-performing stock market globally in 2024. The State Bank of Pakistan aggressively cut interest rates by 900 basis points since June 2024 as inflation declined significantly. This monetary easing supports corporate profitability, economic rebound, and investor sentiment as fixed income becomes less attractive.

Monetary Policy Interest Rates Inflation Economic Recovery Corporate Profitability

Sri Lanka

Sri Lanka delivered a superb rally with the Colombo All Share Index gaining 20.9% in December 2024. Key tailwinds include strong economic recovery led by tourism and domestic consumption, ongoing success of the IMF program, credit rating upgrades by Fitch and Moody's, and political and economic stability following parliamentary elections.

Economic Recovery Tourism IMF Program Credit Rating Political Stability

Vietnam

Vietnam achieved remarkable economic success with estimated 7.0% GDP growth in 2024, the highest in the region. Record export turnover of USD 404bn, industrial production recovery of 8.3%, and record FDI disbursements of USD 24.8bn drove performance. However, the VN-Index underperformed due to foreign selling and real estate sector concerns.

GDP Growth Exports FDI Industrial Production Economic Recovery

Iraq

Iraq experienced two gangbuster years with the AFC Iraq Fund gaining 43.5% in 2024 following 110.4% in 2023. Key dynamics include cumulative positive effects of relative stability creating predictable macroeconomic framework and structural banking developments accelerating adoption and transformation of the sector.

Political Stability Banking Transformation Economic Framework Corporate Profits

Uzbekistan

Uzbekistan faced a challenging year with the fund declining 27.8% in 2024 despite strong economic fundamentals. Market developments include government formation of investment vehicle with Franklin Templeton, oversubscribed Uzbek Commodity Exchange offering, and Bloomberg integration. The market appears to be in a bottoming process with renewed investor interest.

Capital Markets Infrastructure Development Market Development Investment Vehicle

2024 Q3

Rates

The start of the U.S. Fed easing cycle is positive for frontier and emerging markets. Asian frontier central banks began reducing interest rates well before September 2024, and a more dovish Fed will reduce pressure on these central banks. Lower interest rates will feed into corporate profitability and support re-rating of discounted valuations.

Interest Rates Monetary Policy Fed Central Banks Easing

Capital Markets

Uzbekistan is moving closer to a phase change in capital markets with OTP Bank joining the sandbox regime and government announcing secondary offering of Uzbek Commodity Exchange. Infrastructure developments include custody solutions and plans for Bloomberg quotes, which should increase capital flows into the market.

Sandbox Custody Infrastructure Liquidity Foreign Investment

Vietnam

Vietnam's economy shows strong fundamentals with 9.5% Industrial Production Index growth, record trade surplus of USD 19.1 billion, and FDI disbursement reaching USD 14.15 billion. The Non-Pre-funding Circular and Fed rate cuts create positive momentum for FTSE emerging market upgrade and sustained market growth.

GDP Growth Trade Surplus FDI FTSE Upgrade Emerging Markets

Sri Lanka

Presidential election resulted in AKD's victory, with the new administration committing to the IMF program framework and debt restructuring. The Colombo Stock Exchange rallied post-election as investors factored in the balanced stance toward economic reforms and continued stability.

Presidential Election IMF Program Debt Restructuring Economic Recovery Political Stability

2024 Q2

Banking

Iraq's banking sector is undergoing structural transformation with significant increases in bank account openings, card issuance, and digital payment adoption. The Central Bank of Iraq data shows 51% growth in bank accounts and 115% growth in point-of-sale terminals in 2023, reflecting a shift from cash to formal banking systems.

Banking Digital Payments Financial Inclusion Iraq Transformation

Vietnam

Vietnam reported strong Q2 2024 GDP growth of 6.9% driven by manufacturing and services recovery. Export growth has rebounded strongly since September 2023, with June 2024 exports up 10.5%, while FDI disbursement reached record highs of USD 10.8 billion.

Vietnam GDP Growth Exports Manufacturing FDI

Insurance

Vietnam's non-life insurance sector shows attractive growth potential despite life insurance challenges. The market is projected to grow from USD 2.8 billion to USD 28 billion by 2030, with foreign strategic investors entering the sector and companies trading at low valuations.

Insurance Non-life Insurance Vietnam Growth Valuations

Rates

Pakistan's central bank cut benchmark interest rates by 150 basis points from 22% in June 2024, marking the start of an easing cycle as inflation moderates. Lower rates are expected to boost corporate profitability and stock market sentiment in Pakistan.

Interest Rates Pakistan Monetary Policy Inflation Easing

2024 Q1

Monetary Policy

Central banks across Asian frontier markets have been cutting interest rates significantly since H2 2023, with Sri Lanka cutting 700 basis points over twelve months, Mongolia cutting 100 basis points, and Georgia cutting 75 basis points. This monetary easing is a key driver of the rally in Asian frontier markets.

Interest Rates Central Banks Monetary Easing Policy Inflation

Tourism

Sri Lanka's tourism recovery is accelerating with monthly arrivals exceeding 200,000 between December 2023-March 2024, putting the country on track to return to pre-pandemic levels by end-2024. This recovery is helping build foreign exchange reserves and supporting currency appreciation.

Travel Recovery Foreign Exchange Sri Lanka Arrivals

Banking

Iraqi banks experienced spectacular growth with the top four banks showing stellar year-over-year performance driven by Central Bank of Iraq's new procedural requirements for USD provisioning. Vietnamese banks are being reassessed following strong performance in early 2024.

Banks Iraq Vietnam Growth Regulations

China

Uzbekistan has made a lightning-fast pivot to China since early 2024, with massive Chinese investment deals announced across electricity generation, battery storage, mining, logistics, metal fabrication, auto production, and textiles. This represents a strategic balancing of influence in the region.

Investment Geopolitics Infrastructure Manufacturing Uzbekistan

Exports

Vietnam's export sector is recovering strongly with 17% growth in Q1 2024, led by furniture exports which increased 74% in January-February. Bangladesh exports also gained momentum with 11.1% growth in Q1 2024, driven by garment exports as the country benefits from global supply chain relocation.

Trade Manufacturing Recovery Vietnam Bangladesh

2023 Q4

Mongolia

Mongolia was the best-performing market in December with an 11.8% gain. The fund's top-performing stocks included multiple Mongolian companies: a coking coal producer (+81.4%), a junior miner (+60.0%), a convenience store operator (+24.5%), and a technology company (+12.5%). The fund added to existing positions in Mongolia during the month.

Coking Coal Junior Miners Convenience Stores Technology

Iraq

Iraq was the second-best performing market in December with a 6.2% gain. The country represents the largest allocation in the portfolio at 17.6% of assets, indicating significant exposure to Iraqi markets.

Oil Energy

Banking

The fund invested in a Sri Lankan bank during December and holds a bank in Kazakhstan as one of its two biggest positions at 4.4%. Banking represents exposure to the financial sector across frontier Asian markets.

Regional Banks Emerging Markets

2023 Q3

Diversification

AFC funds demonstrated strong diversification benefits with positive returns while global benchmarks posted negative returns. The AFC Asia Frontier Fund outperformed global benchmarks for the second consecutive month, highlighting the value of Asian frontier market exposure for portfolio diversification.

Outperformance Benchmarks Portfolio Risk Correlation

Trade Policy

U.S. President Biden's visit to Vietnam elevated the partnership to Comprehensive Strategic Partnership status, placing the U.S. among Vietnam's top-tier partners. This strengthens economic ties and creates opportunities for technology transfer and supply chain diversification.

Partnership Technology Supply Chain Investment Relations

Rates

Central banks across Asian frontier markets continued cutting interest rates as inflation eased. Sri Lanka cut rates by 100 basis points and Kazakhstan reduced rates by 50 basis points, supporting economic recovery and market re-rating.

Central Bank Monetary Policy Inflation Economic Recovery Stimulus

Banking

Iraqi banks are positioned to benefit from increased adoption of banking and growth in private sector lending. Bank lending to private sector increased 11% year-to-date, supporting economic growth and money circulation expansion.

Credit Growth Private Sector Deposits Economic Growth Financial System

2023 Q2

Inflation

Inflation is peaking across Asian frontier markets, with Sri Lanka reaching single digits at 6.3% in July. This steep drop allows central banks to continue monetary easing policies, with the Central Bank of Sri Lanka expected to cut rates by another 300-400 basis points by year-end.

Monetary Policy Interest Rates Central Banks Economic Recovery

Tourism

Sri Lanka tourist arrivals in July 2023 reached 66% of pre-pandemic levels with strong bookings for the upcoming peak season in Q4 2023/Q1 2024. The ongoing recovery in tourist arrivals is robust and supporting the economic recovery.

Travel Recovery Economic Recovery Sri Lanka Hospitality

Insurance

The insurance sector significantly benefits from the high-interest rate environment and overall economic recovery post-pandemic. Vietnamese insurance companies showed remarkable earnings growth in Q2 with PVI, ABI, BIC, and MIG reporting growth of 61%, 97%, 189%, and 273% respectively.

Financial Services Earnings Growth Vietnam Interest Rates

Infrastructure Spending

Construction companies operating in public investment are beneficiaries of government deployment of large-scale projects, particularly highway construction, airports, and power infrastructure. Vietnam's 'highway era' provides significant opportunities for the next five years.

Public Investment Construction Government Spending Vietnam

Agriculture

Global rice market conditions favor Vietnam as the second-largest rice exporter. El Nino phenomenon and geopolitical factors have led to substantial rice price increases, with Vietnamese rice export prices jumping from USD 470 to USD 600 per ton, and first half 2023 export value reaching a record high.

Rice Exports Commodity Prices Vietnam Global Trade

2023 Q1

Frontier Markets

The fund focuses on Asian frontier markets including Bangladesh, Cambodia, Georgia, Iraq, Jordan, Kazakhstan, and others. Portfolio diversification across these markets has resulted in lower risk with 10.6% annualized volatility. The fund outperformed its benchmark significantly since inception.

Asia Emerging Diversification Volatility

Consumer

The fund focuses primarily on consumer-related stocks as part of its investment strategy. Consumer goods represents the largest sector allocation at 20.9% of assets.

Retail Goods Allocation

Financials

Financials represent 13.8% of the fund's allocation. The top performer in March was a Sri Lankan bank that gained 28.6%.

Banks Allocation Performance

Date	Pitch Type	Author	Ticker	Company	Industry	Sub Industry	Bull / Bear	Exchange	Keywords	Action
Dec 31, 2025	Fund Letters	Thomas Hugger	LUCK PK	Lucky Cement Ltd.	Materials	Construction Materials	Bull	New York Stock Exchange	Cement, diversification, expansion, infrastructure, valuation	Login
Dec 31, 2025	Fund Letters	Thomas Hugger	COMB SL	Commercial Bank of Ceylon PLC	Financials	Banks	Bull	New York Stock Exchange	banking, recovery, ROE, Sri_Lanka, valuation	Login
Dec 31, 2025	Fund Letters	Thomas Hugger	FPT VN	FPT Corporation	Information Technology	IT Services	Bull	New York Stock Exchange	Earningsrecovery, Outsourcing, rerating, Software, Vietnam	Login
Oct 9, 2025	Fund Letters	Thomas Hugger	MPC	Minh Phu Seafood Corp.	Energy	Food Products	Bull	Ho Chi Minh Stock Exchange	Exports, growth, Margins, Seafood, turnaround, Vietnam	Login

Date

Pitch Type

Author

Ticker

Company

Industry

Sub Industry

Bull / Bear

Exchange

Keywords

Action

Dec 31, 2025

Fund Letters

Thomas Hugger

LUCK PK

Lucky Cement Ltd.

Materials

Construction Materials

Bull

New York Stock Exchange

Cement, diversification, expansion, infrastructure, valuation

Dec 31, 2025

Fund Letters

Thomas Hugger

COMB SL

Commercial Bank of Ceylon PLC

Financials

Banks

Bull

New York Stock Exchange

banking, recovery, ROE, Sri_Lanka, valuation

Dec 31, 2025

Fund Letters

Thomas Hugger

FPT VN

FPT Corporation

Information Technology

IT Services

Bull

New York Stock Exchange

Earningsrecovery, Outsourcing, rerating, Software, Vietnam

Oct 9, 2025

Fund Letters

Thomas Hugger

MPC

Minh Phu Seafood Corp.

Energy

Food Products

Bull

Ho Chi Minh Stock Exchange

Exports, growth, Margins, Seafood, turnaround, Vietnam

TICKER	COMMENTARY
BBOB.IQ	The culprits were two huge cash dividend announcements during the month of 12.1% and 8.7% by two of its ten components, the Bank of Baghdad (BBOB) and Asiacell Communications (TASC), respectively, with a 17.7% and 19.1% index weighting at the end of April.
TASC.IQ	The culprits were two huge cash dividend announcements during the month of 12.1% and 8.7% by two of its ten components, the Bank of Baghdad (BBOB) and Asiacell Communications (TASC), respectively, with a 17.7% and 19.1% index weighting at the end of April.
BMNS.IQ	These, as discussed last month, come on the heels of two similarly oversized dividends. The first, in March, was Mansour Bank (BMNS)'s combination of a cash dividend amounting to a 4.7% dividend yield and a 31.5% share dividend, for an effective dividend yield of 19.5%.
BNOI.IQ	The second, in April, by the National Bank of Iraq (BNOI)'s combination of a cash dividend amounting to a 4.9% dividend yield and a 25.0% share dividend, for an effective dividend yield of 9.5%.
IBSD.IQ	These four dividends promise a repeat of last year's humongous dividends by the top companies in the market, particularly Baghdad Soft Drinks (IBSD), which last year paid out a cash dividend equivalent to a 7.5% dividend yield.

TICKER

COMMENTARY

BBOB.IQ

The culprits were two huge cash dividend announcements during the month of 12.1% and 8.7% by two of its ten components, the Bank of Baghdad (BBOB) and Asiacell Communications (TASC), respectively, with a 17.7% and 19.1% index weighting at the end of April.

TASC.IQ

BMNS.IQ

These, as discussed last month, come on the heels of two similarly oversized dividends. The first, in March, was Mansour Bank (BMNS)'s combination of a cash dividend amounting to a 4.7% dividend yield and a 31.5% share dividend, for an effective dividend yield of 19.5%.

BNOI.IQ

The second, in April, by the National Bank of Iraq (BNOI)'s combination of a cash dividend amounting to a 4.9% dividend yield and a 25.0% share dividend, for an effective dividend yield of 9.5%.

IBSD.IQ

These four dividends promise a repeat of last year's humongous dividends by the top companies in the market, particularly Baghdad Soft Drinks (IBSD), which last year paid out a cash dividend equivalent to a 7.5% dividend yield.

Ticker	Put/Call	Amount Bought	Shares Bought	% Change	Weight %
No Recent Buys Data

Ticker

Put/Call

Amount Bought

Shares Bought

% Change

Weight %

No Recent Buys Data

Ticker	Put/Call	Amount Sold	Shares Sold	% Change	Weight %	Status
No Recent Sells Data

Ticker

Put/Call

Amount Sold

Shares Sold

% Change

Weight %

Status

No Recent Sells Data

Industry	Prev Quarter %	Current Quarter %	Change
No industry data available

Industry

Prev Quarter %

Current Quarter %

Change

No industry data available

Investment Summary

Investor Summary

Fund Strategy

FUND PERFORMANCE AS OF 30th June 2026

Investor Letters

Latest Executive Summary:

Executive Summary

Core Thesis

Forward Outlook

Investment Themes

Capital Markets

Dividends

Infrastructure Spending

Oil

Pakistan

Vietnam

Uzbekistan

Rates

Pakistan

Sri Lanka

Gold

Banking

Uzbekistan

Vietnam

Bangladesh

Sri Lanka

Vietnam

Gold

Iraq

Bangladesh

Sri Lanka

Vietnam

Iraq

Gold

Trade Policy

Diversification

Value

Oil

Banking

Pakistan

Sri Lanka

Vietnam

Iraq

Uzbekistan

Rates

Capital Markets

Vietnam

Sri Lanka

Banking

Vietnam

Insurance

Rates

Monetary Policy

Tourism

Banking

China

Exports

Mongolia

Iraq

Banking

Diversification

Trade Policy

Rates

Banking

Inflation

Tourism

Insurance

Infrastructure Spending

Agriculture

Frontier Markets

Consumer

Financials

Investor Pitches

Current Portfolio as of ( 30th June 2026 )

Key Risks identified by Manager:

Key catalysts include:

Portfolio Implications

Ticker Commentary

Thomas Hugger Top Holdings

Recent Buys (13F)