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Defaqto on JM Finn’s CF JM Finn Africa Fund

View of Defaqto insight analyst for funds Fraser Donaldson

Donaldson says: “This fund seeks both capital and income growth through investing in the economies of continental Africa. It will invest predominantly in equities and bonds.

“The companies invested in will either be situated in Africa or trade with African economies. The fund may also invest in other transferable securities such as collectives, money market instruments and deposits. Derivatives will be used for efficient portfolio management only.

“Fund manager Anthony Eaton has a good track record with the JM Finn global opportunities fund. The manager believes that Africa is well placed to take advantage of its position as a major supplier of raw materials and commodities. He also believes that as with other emerging markets, growing wealth will inevitably lead to increased domestic demand from consumers.

“There is no doubt that emerging markets as a whole have been the place to invest over the last couple of years. Arguably, despite the perceived risks of investing in emerging markets regions, the fundamentals may well be superior to those of the developed economies.

“However, Africa is a big continent so advisers and investors must be aware of the political, economic and social risks of investing in such a diverse market.

“For advisers that are knowledgeable about this region or have clients that want to invest specifically in African economies and understand the risks, this is a fund that is worth considering.

“For those that do not have sufficient knowledge of individual emerging markets and regions, there is plenty of generalist emerging market funds where the fund managers, with all their resources, decide which specific emerging markets to invest in.”

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