Old Mutual Investment Group, the South African-based firm, has launched its Africa index fund in the UK with a sterling share class.
The RIC Old Mutual Africa Index fund provides exposure to the continent ex-South Africa, investing in companies from Kenya, Zambia, Mauritius, Congo and Mali, among other frontier growth areas.
One investor said: ‘We invest in the Frontier markets in our higher risk accounts. The returns of these markets are quite high, but what is attractive is that they tend to be uncorrelated with the main developed and emerging markets which can be driven by macro developments in the US, Europe and China.
‘The Frontier markets tend to have their own issues like political strife (Mali at the moment), deregulation, elections, and their own growth cycles.
‘All these factors, both good and bad, make the Frontier markets great diversifiers. The Frontier markets also tend to have a positive value bias with the major sectors tending to be financials, telecoms, resource and food and beverage companies.’
A spokesperson for Old Mutual IG said the firm worked closely with the team from S&P to create a liquid index of Africa companies, to give investors broad based access to Africa excluding South Africa.
‘We have found that many investors choose to get access to South Africa either directly, or already have access to South Africa through their emerging markets exposure,’ she added.
Old Mutual Investment Group manages more than $200 million in listed companies who derive most of their earnings from Africa.