Allan Gray Africa ex-SA Bond Fund: Opportunity for long-term debt investors

In the latest Allan Gray Africa ex-SA Bond Fund, Nick Ndiritu, portfolio manager at Allan Gray, discusses how African markets have been vulnerable in the last quarter to the widespread sell-off in emerging and frontier markets.

"Investors in debt markets have not been spared from this decisively negative sentiment," says Ndiritu. Despite this, the fund has seen a return of 2.8% year-to-date.

"The Fund’s exposure to local currency government debt has yielded attractive US dollar returns. This exposure is primarily to Nigeria, Egypt and Ghana. Egypt and Ghana’s currencies are susceptible to capital outflows, but both countries have made steady progress in establishing policy credibility. Nevertheless, we are cognisant of the inherent currency risks when portfolio investors lose faith and run for the exit door," says Ndiritu.

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