IN FOCUS: RWANDA ‘ WE ARE FINANCING A COUNTRY THAT IS SLOWLY BEING REBUILT’
Rwanda is a country many investors are overlooking at the moment and that is one of the main reasons I like it. Its government bonds are too small to be included in JP Morgan’s benchmark index as they have released only around $400m. But there is enormous growth potential.
This is a country that has been ravaged by civil war in the past and is now looking to recover, so there is a lot of low-hanging fruit. The country is no longer fighting itself so things need to be rebuilt and we are expecting a steady increase in infrastructure and productivity as things stabilise over the long term.
Rwanda is growing faster than its neighbours, but it is stable growth, not driven by any one spike in commodities prices or any other bubble. For a subSaharan African country we think that transparency has come a long way, too. There are still issues, but things are improving in the business culture and in gender equality.
This was one of the first holdings I added to the fund when I took over in 2013 and it has been in the fund since. It’s a core position and a solid performer, paying a yield of around 5pc to 6pc. been devalued or the commodities particular to those economies have not done so well. We think they are now turning the corner and growth is coming back, deficits are shrinking and commodity prices such as cocoa in the Ivory Coast or oil in Angola are on the rise. I bought Ukrainian government bonds following the annexation of Crimea by Russia in 2014. As the country recovered and its debt was restructured we more than doubled our money in about six months.
Recently we got hurt a little by the crisis in Turkey. I had about 1pc to 2pc of the fund invested in local currency and the banks. Thankfully the exposure was minimal. Yes. I would have worked at an international aid organisation.