Providing Access To A Growing And Exciting Asset Class (Pan African Local Currency Fixed Income)
When it launched its Africa Bond Fund back in 2014, MCB Investment Management (MCB IM) became an early player in the pan-African fixed income space. . Over time, the team has built up considerable expertise in the management of funds and portfolios focused on African local and hard currency (USD and EUR denominated) bonds.
In 2018, on the back of its strong track record, MCB IM was mandated by the African Development Bank (AfDB), to partner with them for the launch and management of the first Exchange Trade Fund providing access to Local Currency Pan African government bonds. The mandate was in line with the AfDB’s goal to improve local capital markets across Africa, helping countries and corporates reduce and better manage their dependency on hard currency issuances. This, incidentally, is a strategy that MCB IM believes will benefit the continent as a whole.
The African Domestic Bond Fund (ADBF), which is denominated in USD, and domiciled and primarily listed in Mauritius, was launched in September 2018. The AfDB acts as an anchor investor and sponsor of the fund. ADBF is structured as an ETF to provide an easy, liquid and cost effective vehicle for institutional and individual investors alike. The fund also distributes dividends twice a year, with a historical dividend yield of 8-10% per year. The impressive performance of the fund (total return of ~41% in USD terms since launch, 13.78% in 2020 alone) has also played a pivotal role in changing the perception of investment in the continent. Since its launch, the fund has outperformed its global fixed income peers, be it US high yield, investment grade bonds or Emerging Market hard or local currency bonds.
MCB Capital Markets is the investment banking, private equity and asset management arm of MCB Group. The company provides a broad range of services under one roof, including corporate finance advisory, asset management, stockbroking, private equity, structured products and registry services. Based in Mauritius, our team assists international investors in taking advantage of opportunities in Africa.
Visit our website for more information on MCB Capital Markets and the African Domestic Bond Fund.
