New York, NY - January 7, 2011
Nile Capital Management, announced the 2010 performance update for its Nile Pan Africa Fund (NASDAQ: NAFAX), an actively managed mutual fund that focuses exclusively on the continent of Africa.
Nile Pan Africa Fund has returned +23.30% since its inception date of April 28, 2010 to December 31, 2010. During the same time period, the MSCI Emerging Markets Index returned +14.53%, while the S&P 500 Total Return Index returned just +7.07% and the MSCI Frontier Markets Index returned + 8.67%.
The portfolio gained the most benefit from mining and precious metal companies. On the flip side, construction related companies were the worst performers in the portfolio. Although we believe that these companies are undervalued, we are keeping watch for catalysts that can help share prices in these companies as well as opportunities in other industries.
Investment Case for Africa
We believe the investment case for Africa will continue to be underpinned by three themes. First, Africa is rich in natural resources. The continent contains 13% of the global reserves for oil, 50% of proven gold reserves, 60% of cobalt and 90% of the platinum group reserves, to mention a few. Africa will continue to supply the world with basic raw materials as demanded by countries looking to industrialize. Second, Africa's rising consumption is driven by its demographics. The continent's young population will fuel more demand for goods and services, relative to developed countries that spend more on social security, health care and entitlements. Finally, valuations are attractive. Africa's markets are less followed, companies and households have low levels of debts, countries have better fiscal balances and the economies have low leverage.
We believe investors can look at Africa as a way to deepen their emerging market allocations without increasing risk.
We are staying bullish on Africa as developed and emerging countries continue their quest for natural resources in Africa and as quantitative easing and other stimulus measures from developed economies lead to sustainable medium to long term inflation pressures.
To learn more about investing in Africa, download our white paper here http://nilecapital.com/research.php.
The Nile Pan Africa Fund (NAFAX) returned 8.54% for the month of December and 23.3% from inception to date. The table below summarizes performance relative to the S&P 500.
As of December 31, 2010. Inception Date is April 28, 2010.
|Fund Name||1 Month||Since Inception|
|Nile Pan Africa Fund (NAFAX)||8.54%||23.30%|
|S&P 500 Total Return||6.68%||7.07%|
To see additional performance information, please click here.
The performance data quoted here represents past performance. Current performance may be lower or higher than the performance data quoted above. Investment return and principal value will fluctuate, so that shares, when redeemed, may be worth more or less than their original cost. Past performance is no guarantee of future results. As stated in the current prospectus, the Fund's total annual operating expense ratio (gross) is 4.17% for Class A, 4.92% for Class C and 3.92% for Institutional Class shares. The Fund's investment adviser has contractually agreed to reduce its fees and/or absorb expenses of the fund, at least until July 31, 2011, to ensure that the Total Annual Fund Operating Expenses After Fee Waiver (exclusive of any acquired fund fees and expenses, borrowing costs, taxes and extraordinary expenses) will not exceed 2.50% for Class A, 3.25% for Class C and 2.25% for Institutional Class shares, subject to possible recoupment from the Fund in future years. Please review the Fund's prospectus for more detail on the expense waiver. Results shown reflect the waiver, without which the results could have been lower. A Fund's performance, especially for very short periods of time, should not be the sole factor in making your investment decisions. For performance information current to the most recent month-end, please call toll-free 1-877-68-AFRICA.
Investors should carefully consider the investment objectives, risks, charges and expenses of the Nile Pan Africa Fund. This and other important information about the Fund is contained in the prospectus, which can be obtained by calling 1-877-68-AFRICA. The prospectus should be read carefully before investing. The Nile Pan Africa Fund is distributed by Northern Lights Distributors, LLC member FINRA. Nile Capital Management, LLC is not affiliated with Northern Lights Distributors, LLC.
Mutual Funds involve risk, including possible loss of principal. Because the Fund will invest the majority of its assets in African companies, it is highly dependent on the state of the African economy and the financial prospects of specific African companies. Certain African markets are in only the earliest stages of development and may experience political and economic instability, capital market restrictions, unstable governments, weaker economies and less developed legal systems with fewer security holder rights. Adverse changes in currency exchange rates may erode or reverse any potential gains from the Fund's investments. ETF's are subject to specific risks, depending on the nature of the underlying strategy of the fund. These risks could include liquidity risk, sector risk, as well as risks associated with fixed income securities, real estate investments, and commodities, to name a few. Non-diversification risk, as the Funds are more vulnerable to events affecting a single issuer. Investments in underlying funds that own small and mid-capitalization companies may be more vulnerable than larger, more established organizations.
The S&P 500 Index is an unmanaged composite of 500 large capitalization companies. The index is widely used by professional investors as a performance benchmark for large-cap stocks. The MSCI Emerging Markets Index is a market-capitalization weighted index of 21 emerging market country indices. The MSCI Frontier Markets Index is a market-capitalization weighted index of 26 emerging market country indices. You cannot invest directly in an index.