| ANNUALIZED SINCE INCEPTION | QUARTERLY | YTD |
|---|---|---|
| 9.1% | 5.44% | 38.15% |
| 2025 | 2024 | 2023 | 2022 | 2021 | 2020 |
|---|---|---|---|---|---|
| 38.2% | 33.0% | 17.4% | -11.4% | 34.4% | 2.8% |
Frontaura delivered strong Q4 2025 returns of 5.44% net, capping an exceptional year with 38.15% annual gains. The three-year winning streak reflects multiple factors: rebound from 2022 selloff, ongoing bull cycle from April 2020, high dividend yields, valuation recovery from historic lows, exceptional earnings growth, and cyclical shifts including dollar weakness and potential investor preference changes toward international assets. Portfolio EPS growth of 16% YTD through Q3 2025 continues to surprise positively, following years of double-digit growth. The fund's disciplined approach focuses on avoiding overvaluation, managing country concentration, and capitalizing on major selloffs. Key risks include global financial events, currency crises, and geopolitical tensions, particularly regarding Colombia (9% weight) amid Trump-Petro tensions. However, historical analysis shows major selloffs create opportunities for subsequent outperformance. With portfolio trading at 6.9x PE versus S&P 500's 29x, valuations remain attractive. The managers maintain conviction in their disciplined value approach while acknowledging potential multi-year tailwinds from favorable macro trends.
Frontaura maintains a disciplined value approach in frontier and emerging markets, focusing on high-quality companies with strong earnings growth and attractive dividends, while managing country-level risks and capitalizing on major market dislocations.
The managers conclude they have probably worried too much about global risk events, given their strong track record of recovery from major selloffs. They expect to continue their disciplined approach while acknowledging potential tailwinds from dollar weakness and shifting investor preferences toward international assets, though these trends need more time to confirm as long-term changes.
| Date | Letter | Tickers | Keywords | Pitches | Quick Takes |
|---|---|---|---|---|---|
| Jan 13 2026 | 2025 Q4 | - | Colombia, dividends, Dollar, earnings, emerging markets, frontier markets, Geopolitical, value | - | Frontaura capped a stellar 2025 with 38% returns, driven by exceptional earnings growth, dollar weakness, and valuation recovery from historic lows. The frontier markets specialist maintains disciplined value approach with portfolio trading at 6.9x PE. Key risks include geopolitical tensions in Colombia and potential global selloffs, though historical analysis shows major declines create opportunities for subsequent outperformance. |
| Dec 2 2025 | 2025 Q3 | - | earnings, emerging markets, frontier markets, international, momentum, Quality, small cap, value | - | Frontaura posted 11.06% in Q3 and 31.02% YTD, driven by 31% earnings growth and valuation recovery from COVID lows. Portfolio trades at 7.3 PE versus S&P 500 at 30.1 PE. Proprietary momentum research supports positive 12-month outlook. Limited technology exposure helped outperform US markets over five years. |
| Jul 9 2025 | 2025 Q2 | CIB, ENBD.DU, HEPS, UBA, ZENITH | Banking, Currency, emerging markets, frontier markets, Nigeria, tariffs, Turkey, Vietnam | - | Frontaura posted strong Q2 returns of 11.97% and 17.98% year-to-date, benefiting from dollar weakness. The fund exited seven positions including Nigerian banks and Turkish consumer names, redeploying capital to friendlier markets with strong results. Despite macro concerns around tariffs and geopolitics, valuation metrics suggest continued upside potential in frontier markets. |
| Apr 4 2025 | 2025 Q1 | - | commodities, Credit Stress, emerging markets, frontier markets, tariffs, Trade Policy, Vietnam | - | Frontaura's frontier market strategy delivered 5.36% in Q1 despite tariff volatility, maintaining disciplined value approach with 6.0x PE portfolio. Limited US export exposure provides natural hedge against trade war impacts. Quality Value Score of 71 projects strong forward returns while geographic diversification across commodity producers and importers creates balanced risk profile in uncertain macro environment. |
| Dec 31 2024 | 2024 Q4 | - | Currency, emerging markets, frontier markets, rates, small cap, value | - | Frontaura's frontier markets strategy delivered 33% returns in 2024, outperforming major indices through disciplined value investing in undervalued stocks across emerging markets. The fund trades at attractive 6.0 PE with active capital deployment continuing. Rising US yields pose refinancing risks for emerging market countries, but managers maintain selective exposure where macro risks remain acceptable. |
| Oct 31 2024 | 2024 Q3 | - | emerging markets, frontier markets, Performance, Rate Cuts, Seasonality, valuation | - | Frontaura posted 5.23% in Q3, reaching 23.27% YTD and outpacing major indices. The fund trades at attractive 5.8x PE with 6.6% dividend yield across 21 frontier and emerging markets. Rate cuts in 13 portfolio countries support growth outlook, while positive August-September performance historically signals favorable October-November returns. |
| Jul 20 2024 | 2024 Q2 | ASAI.L, KO, MCD | earnings, emerging markets, frontier markets, Performance, value | - | Frontaura posted 8.57% Q2 returns, leading benchmarks with 17.14% YTD performance while maintaining attractive 5.3x earnings valuation. Portfolio companies delivered 42% EPS growth with Quality Value Score projecting strong future returns. Managers detailed mixed exit results but remain optimistic on portfolio outlook despite US market concerns and seasonal Q3 weakness ahead. |
| Apr 15 2024 | 2024 Q1 | - | Africa, Country Risk, Currency, Debt, emerging markets, frontier markets, valuation | - | Frontaura posted 7.89% Q1 returns while maintaining defensive country selection focused on debt sustainability. Portfolio concentrated in Kenya and Nigeria after exiting high-debt markets. Attractive 5.9x PE valuation with 6.2% yield provides downside protection. Manager expects resilience during potential global recession but acknowledges opportunity cost if conditions remain favorable for riskier frontier markets. |
| Sep 30 2023 | 2023 Q3 | - | Behavioral Finance, emerging markets, frontier markets, Quality, small cap, Timing, value | - | Frontaura's frontier markets portfolio trades at exceptional 5.6x PE versus 22.8x for S&P 500, with Quality Value Score at 97/100 projecting 25% one-year returns. Despite Q3 loss of 0.96%, fund leads benchmarks with 14.34% YTD gain. Managers introduce behavioral timing tools while maintaining conviction in attractive valuations despite developed world recession risks. |
| Jul 18 2023 | 2023 Q2 | HAPAG.DE, QNB.CA, QUINENCO.SN, STS.WA | emerging markets, frontier markets, inflation, Manufacturing, Rate Cuts, valuation | - | Frontaura reached new highs with 8.38% Q2 returns, benefiting from attractive frontier market valuations at 6.3 PE with 20% earnings growth. Managers see disinflation enabling EM rate cuts while developed markets lag. Exited Egypt completely due to macro crisis, maintaining focus on undervalued frontier markets with improving monetary policy tailwinds. |
| Mar 31 2023 | 2023 Q1 | - | Banking, Credit Stress, emerging markets, frontier markets, interest rates, portfolio, Valuations | - | Frontaura outperformed major indices with 6.53% Q1 gains, validating their frontier market focus. Managers correctly predicted banking stress from rate hikes and positioned defensively by exiting vulnerable countries. Portfolio of market-leading companies trades at attractive 6.5x earnings with strong fundamentals. Expect US recession from credit tightening while maintaining conviction in frontier market opportunities. |
| Sep 2 2023 | 2022 Q4 | - | - | - | |
| Sep 11 2022 | 2022 Q3 | - | - | - |
| QUARTER | THEMES | TAGS |
|---|---|---|
| 2025 Q4 |
E-commerceCarvana was the top performer as a vertically integrated e-commerce platform for used cars. The company eliminates traditional dealerships and provides a haggle-free experience with vast nationwide inventory. With less than 2% market share, Carvana appears to have a long runway of profitable growth ahead. |
Used Cars Digital Platform Market Share |
Energy TransitionTalen Energy was a major contributor for the third consecutive year as an independent power producer owning nuclear facilities. The company expanded its relationship with Amazon Web Services to provide carbon-free energy for data centers and acquired gas-fired power plants for $3.8 billion. |
Nuclear Power Data Centers Carbon-free Energy | |
Data CentersTalen Energy's expansion with Amazon Web Services to provide carbon-free energy for data centers was highlighted as a key development. Rising electricity demand from data centers represents a significant opportunity for power producers. |
Electricity Demand AWS Power Supply | |
| 2025 Q3 |
EarningsEarnings growth is the biggest contributor to performance over the past five years. Companies held at end of June grew Q2 2025 dollar EPS by 31% versus Q2 2024. Two sources drive earnings growth: expected post-crisis investing in quality companies recovering from COVID or inflation cycles, and unexpected across-the-board improvement in frontier market earnings growth after COVID reset. |
EPS Growth Post-Crisis Recovery Quality |
ValuePortfolio trades at 7.3 trailing PE versus S&P 500 at 30.1 PE, creating a 4.1x ratio that managers believe is too high. Valuation normalization from COVID-depressed levels has been significant performance factor. Portfolio could move toward high end of historical range or beyond given low absolute valuation levels. |
PE Ratio Valuation Historical Range Undervalued | |
MomentumFund developed Quality Value Momentum Score (QVMS) research showing 6-month trailing return as momentum factor is statistically significant for predicting forward 12-month returns. Recent strong performance gives above-average QVMS consistent with above-average returns over next 12 months, though momentum effect wears off beyond one-year mark. |
QVMS Momentum Factor Statistical Significance Predictive | |
QualityQuality Value Score (QVS) combining ROE as quality metric with valuation measures is more statistically significant to future returns than valuation alone. Quality appears to be stronger factor in second year than first year of investment horizon, complementing shorter-term momentum and medium-term valuation factors. |
ROE Quality Metrics Statistical Significance Long-term | |
| 2025 Q2 |
TariffsThe manager discusses Liberation Day tariff rates returning July 9 after a 90-day reprieve, with only three deals struck including UK (10%), China (55%), and Vietnam (20%). The Vietnam deal signals that even eager countries may face tariffs above 20%. The fund has minimal direct exposure as they don't own exporters, preferring local economy plays. |
Trade Policy Vietnam China United Kingdom |
CurrencyDollar weakness has boosted returns with around one-fifth of 2025 performance coming from currency movements. The manager expects the weak dollar trend to continue though not in a straight line, drawing parallels to 2003-2007 when the dollar lost 41% of its value during the golden age of emerging and frontier markets. |
Dollar Emerging markets Frontier Markets | |
BankingThe fund exited Nigerian banks UBA and Zenith due to forced dilutive capital raises by the Central Bank of Nigeria, despite low valuations. They also sold Bancolombia and Emirates NBD for different reasons - country rotation and governance concerns respectively. Banking exposure reflects opportunistic value plays in specific markets. |
Nigeria Colombia United Arab Emirates | |
| 2025 Q1 |
Trade PolicyUS Liberation Day tariff announcement created significant market volatility with reciprocal tariffs imposed on multiple countries. Vietnam received 46% tariff rate despite being historically profitable for the fund. Managers view this as potentially a negotiating tactic but assume they are in a changed world for planning purposes. |
Tariffs Trade War Reciprocal Negotiation Vietnam |
CommoditiesOil and copper prices declined significantly following tariff news and OPEC+ supply increase. Fund expects further commodity price declines in global recession scenario. Portfolio has mix of commodity-producing and importing countries, creating natural hedges during price volatility. |
Oil Copper OPEC Recession Producers | |
Credit StressUS junk bond spreads widened from under 300 basis points to over 400 basis points. Managers expect significant further widening in credit spreads and country credit spreads, with some countries potentially losing market access for extended periods during recession. |
Credit Spreads Junk Bonds Country Risk Market Access Recession | |
| 2024 Q4 |
ValueThe fund continues to buy stocks trading below intrinsic value estimates with attractive portfolio metrics including 6.0 PE, 1.06 price/book, and 5.8% dividend yield. The S&P 500 trades at four to five times more expensive valuations with a 29 PE and 1.3% dividend yield. |
Valuation Intrinsic Value Price/Book Dividend Yield |
RatesThe managers discuss the rise in US 10-year Treasury yields from 3.62% to 4.80% over four months as a potential catalyst for future crises. They analyze how higher risk-free rates affect asset valuations and debt refinancing costs globally, particularly for highly indebted countries. |
Treasury Yields Risk-Free Rate Debt Refinancing Interest Rates | |
| 2024 Q3 |
RatesThe US Federal Reserve began its interest rate cutting cycle September 18. Thirteen of the 21 countries in the portfolio began cutting rates before this, with all Latin American countries beginning in 2023. These earlier rate cuts mean that estimated economic growth in their countries is increasing, on average, in 2024 and 2025, in contrast to the US where analysts forecast RGDP growth to decline. |
Rate Cuts Monetary Policy Economic Growth Central Banks Latin America |
SeasonalityThe fund has strong seasonality with positive monthly returns December through July and negative returns August through November. Historical analysis shows that when both August and September are positive (as in 2024), October and November have typically been favorable, with gains in four of five historical cases. |
Seasonal Patterns Monthly Returns Historical Analysis Market Timing | |
| 2024 Q2 |
ValuePortfolio trades at 5.3 times trailing earnings with 0.98 price-to-book ratio and 6.5% dividend yield. Quality Value Score of 92 projects 23% one-year and 45% two-year returns based on statistically significant regressions. |
Valuation Earnings Dividends Quality |
EarningsPortfolio achieved 42% EPS growth in Q1 following 22% growth in Q4 2023, marking six consecutive quarters of strong double-digit growth. Managers expect more moderate growth going forward as comparisons become tougher. |
Growth Performance Fundamentals | |
| 2024 Q1 |
DebtManager emphasizes avoiding high government debt-to-GDP countries in higher interest rate environment. Exited multiple countries due to debt concerns including Sri Lanka (116% debt/GDP), Egypt (96%), Ghana (84%), and Pakistan (77%). Current holdings favor lower debt countries like Nigeria (45%) despite other challenges. |
Government Debt Interest Rates Default Risk Restructuring IMF Programs |
CurrencyCurrency crises identified as biggest portfolio risk during risk-off periods. Manager discusses classic cures including currency devaluation, interest rate hikes, and IMF programs. Egypt's recurring devaluation cycle highlighted as example of structural currency instability affecting investment returns. |
Devaluation Currency Crisis Exchange Rates Dollar Shortage Free Float | |
AfricaSignificant focus on African markets including Kenya, Nigeria, and Egypt. Manager notes improvement in macro situations during Q1 after years of deterioration. Kenya viewed most favorably with best reform combination, while Egypt seen as trade opportunity only due to insufficient reforms. |
Kenya Nigeria Egypt Reforms Macro Improvement | |
| 2023 Q3 |
ValuePortfolio trading at 5.6x trailing PE versus S&P 500 at 22.8x, with price/book of 0.96 and dividend yield of 7.1%. Quality Value Score at 97 out of 100, projecting 25% one-year and 48% two-year returns based on historical regression analysis. |
Valuation Quality Dividends Multiples Returns |
Behavioral FinanceExtensive discussion of four behavioral timing tools: Quality Value Score, Dollar-Cost Averaging, Seasonality, and Wait for a Winner. Focus on helping investors overcome timing challenges and loss aversion to invest when probabilities favor strong returns. |
Timing Psychology Entry Points Loss Aversion Momentum | |
| 2023 Q2 |
InflationManagers view inflation as yesterday's news with disinflation well underway globally. They expect pre-COVID inflation rates to return in 2024 for many countries, citing significant drops in year-over-year inflation rates across their portfolio countries including Philippines, Vietnam, Colombia, and UAE. |
Disinflation Rates Global |
RatesThe policy interest rate cutting cycle has begun in emerging and frontier markets, contrasting sharply with developed world policy. Vietnam cut rates three times in Q2, Sri Lanka cut by 450bp, and other countries including China, Costa Rica, and Hungary also cut rates. |
Central Banks Emerging markets Vietnam | |
Emerging marketsFund focuses exclusively on frontier and emerging markets with strong performance relative to developed markets. Portfolio shows 20% year-over-year USD EPS growth and trades at attractive valuations with 6.3 trailing PE versus S&P 500's 25.4 PE. |
Frontier Markets Valuation Growth | |
| 2023 Q1 |
Credit StressManagers predicted and witnessed banking sector stress from rate hikes, including Silicon Valley Bank and Credit Suisse failures. They conducted extensive analysis of their portfolio banks' held-to-maturity securities exposure and mark-to-market losses, finding no concerning issues to date. |
Banking Interest Rates Silicon Valley Bank Credit Suisse HTM Securities |
RatesInterest rate hikes are revealing malinvestment and causing disruptions across the financial system. Managers expect more rate-hike-induced disruptions in areas that benefited disproportionately from low rates, including banking, corporate, government, and various asset classes. |
Interest Rates Federal Reserve Monetary Policy Malinvestment Financial System | |
Frontier MarketsThe fund focuses exclusively on frontier markets, owning market-leading companies across multiple countries. Portfolio trades at attractive valuations of 6.5x earnings, around book value, with 6% dividend yield and 20% ROE. Managers believe frontier markets offer superior opportunities compared to developed markets. |
Frontier Markets Valuations Market Leaders Emerging Markets Portfolio |
| Date | Pitch Type | Author | Ticker | Company | Industry | Sub Industry | Bull / Bear | Exchange | Keywords | Action |
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