MACQUARIE EMERGING MARKETS INFRASTRUCTURE FUND
FACTSHEET DECEMBER 2010
Investment Objective Fund Details
The Macquarie Emerging Markets Infrastructure Fund (the “Fund”) Net Asset Value per
aims to provide shareholders with a total return over the medium to Share
31 December 2010
long term comprising both capital growth and income by investing (A USD)
primarily in securities operating in the infrastructure sector of
emerging market countries. The performance of the Fund is Portfolio Manager Jonathon Ong, David Dali
measured against the benchmark of the MSCI EM Infrastructure Investment Manager Macquarie Investment Management Limited
Sector Capped Index after fees.
Custodian and Central
RBC Dexia Investor Services Bank S.A., Luxembourg
Launch Date 28 January 2010
The Fund invests primarily in emerging markets infrastructure
securities, giving investors access to the Macquarie Group’s Reference Currency USD
specialist infrastructure expertise. The Fund adopts a systematic Fund Size as at
stock selection approach in combination with top down macro USD 3,834,443
31 December 2010
analysis. This macro-overlay allows the Fund to determine the
macro risk in the portfolio and to hedge up to 50% of the Fund’s
assets through cash positions. MSCI Emerging Markets Infrastructure
Benchmark Sector Capped Index
Fund Performance (as at 31.12.2010) (Bloomberg Ticker: MSEUEF$N Index)
Sub-Fund of Luxembourg SICAV
(UCITS III Compliant)
%-change since inception
5.0% Fund Codes and Minimum Investment Amounts
-5.0% Share Classes A (USD/EUR/CHF/GBP) C (USD/EUR/CHF/GBP)
-15.0% LU0433812293 – A USD LU0433812459 – C USD
LU0433812962 – A EUR LU0433813184 – C EUR
LU0433812533 – A CHF LU0433812889 – C CHF
Macquarie Emerging Markets Infrastructure Fund - A (USD) LU0482813465 – A GBP LU0482813622 – C GBP
MSCI Emerging Markets Infrastructure Sector Capped Index
MAEMMAU LX – A USD MAEMMCU LX – C USD
MAEMMAE LX – A EUR MAEMMCE LX – C EUR
Source: M acquarie, Bloomberg
Past perf ormance is no indicat or of f ut ure perf ormance.
MAEMMAC LX – A CHF MAEMMCC LX – C CHF
Since MAEMMAG LX – A GBP MAEMMCG LX – C GBP
= 1 mth 3 mths 6 mths YTD 1 yr Inception Minimum Initial 100 1,000,000
(28.01.2010) Subscription USD/EUR/CHF/GBP USD/EUR/CHF/GBP
Share Class Minimum Additional 100 50,000
3.21% 4.26% 18.51% N/A N/A 15.99% Subscription Amount USD/EUR/CHF/GBP USD/EUR/CHF/GBP
Fund Charges A C
Benchmark 4.56% 4.26% 19.18% N/A N/A 18.60%
Management Fee 1.50% p.a. 0.90% p.a.
Service Fee 0.30% p.a. None
Top 10 Holdings (as at 31.12.2010)= Custodian and Central
Portfolio Position Country Weight Administration Agent Max 0.40% p.a. Max 0.40% p.a.
America Movil Mexico 8.5%
Total Expense Ratio* N/A N/A
Companhia Concessoes Rodoviarias Brazil 7.3%
Performance Fee None None
Ultrapar Participacoes Brazil 5.9%
Up to 5% of Subscription
China Merchants China 5.4% Initial Charge None
Cosco Pacific China 4.1% Fund Statistics
Korea Electric Power South Korea 3.9% Volatility (1 yr) N/A
Centrais Eletricas Brasileiras Brazil 3.7% Sharpe Ratio (1 yr) N/A
Jiangsu Expressway China 3.1% Tracking Error (1 yr)** N/A
China Mobile China 3.0% G=== Disclosed 1 year from launch date
** Tracking Error is calculated for Class A (USD) against Benchmark (USD)
Tenaga Nasional Malaysia 2.8%
WS: MFG1_London: 1946327: v1
Macquarie Emerging Markets Infrastructure Fund
Emerging markets slightly underperformed developed markets, with MSCI World up 7.4%, while MSCI EM was up 7.1% (both in USD terms). The MSCI EM Infrastructure
Sector Capped Index returned 4.7%.
China underperformed in December due to concerns over inflation and the impact this may have on interest rates. The central bank did in fact increase rates by 25bps
during the month. China's higher inflation is largely driven by a spike in agricultural prices which will not be significantly impacted by interest rates, so we do not expect
much higher rates.
We remain positive on China as it has one of the healthiest economies in the world. In fact, during the month of December S & P raised China's long-term sovereign debt
rating to AA - from A+, citing strong foreign exchange reserves.
The new administration in Brazil confirmed its support for the infrastructure sector by announcing a number of measures designed to encourage funding for infrastructure
projects in Brazil. It is also worth noting that Russia and Qatar were awarded the 2018 & 2022 FIFA World Cup respectively, which highlights the growing importance of
the emerging world. We are already expecting infrastructure spending in Brazil to benefit from its hosting of the 2014 FIFA World Cup and we would expect both Russia
and Qatar to experience a similar boost to infrastructure spending as they look to develop their domestic infrastructure.
There were a number of company specific announcements across the infrastructure sector:
- The Malaysian government has approved the RM36bn MRT (Mass Rapid Transportation) project. As this project was championed by MMC, our Malaysian
listed infrastructure development company, we are confident that MMC is well positioned to win a number of the MRT construction projects.
- Chinese container port operator Cosco Pacific reported a monthly container throughput increase of 19.1% yoy in November. YTD Throughput year to date
increased 20.0% yoy. The market reacted positively to this very strong volume growth.
- Our Chinese gas distribution stocks lagged the December rally on concerns about the ability of these companies to pass on higher gas prices to end users.
We do not share these concerns and remain confident in the strong earnings outlook for our stocks.
- In China, Jiangsu Expressway and Zhejiang Expressway performed solidly, rebounding after weak performance by the Chinese market last month.
- In the Philippines, we took advantage of recent weakness in Manila Electric's share price to invest in the leading provider of electricity in the country. Manila
Electric's franchise area covers 20m people (23% of Philippines population), 9337sq km and the area produces around 50% of Philippines GDP.
- In Mexico, Grupo Aeroportuario del Pacifico performed well after reporting traffic above market expectations and as the outlook for the US economy improved.
Following two years of strong performance, a period of consolidation would be healthy for EM markets. Any resurgence in European sovereign debt concerns would
make it difficult for EM equities to rally further from current levels.
However, our longer-term view remains positive as the three foundation assumptions that support EM infrastructure investment (economic growth, population growth,
and urbanisation) all remain intact and we continue to see good investment opportunities arising from the infrastructure shortage in EM.
The Fund has significant investments in a number of themes, such as gas distribution, infrastructure development and seaports. The Fund is underweight in low growth
telecommunication stocks and electric utilities.
Top 5 Country and Sector Active Allocation (as at 31.12.2010)
Country Fund Benchmark Active Weight Sector Fund Benchmark Active Weight
China 29.3% 21.2% 8.1% Construction & Engineering 4.3% 0.0% 4.3%
Mexico 14.9% 9.0% 5.9% Marine Ports & Services 11.0% 7.1% 3.9%
Brazil 24.8% 21.1% 3.6% Airport Services 6.8% 3.0% 3.8%
South Korea 7.5% 4.1% 3.4% Highways & Railtracks 15.2% 11.7% 3.5%
Hungary 0.0% 0.1% (0.1%) Industrial Conglomerates 3.4% 0.0% 3.4%
IMPORTANT INFORMATION AND RISK WARNINGS
The value of an investment in the Fund and any income from it may fall as well as rise and investors may not get back the amount originally invested. Past performance is not necessarily a guide to
future performance. Particularly if the performance refers to a period of less then 12 months (YTD performance data, Fund launch less than 12 months ago), the performance data is no guide to
future performance due to the short comparison period. Potential initial or redemption charges are not reflected in the performance data. Any performance data is shown in the Fund currency and
is based on the performance of the A share class. Emerging markets can be more volatile than developed markets. Where Macquarie has expressed views and opinions, these may change. Please
refer to the latest relevant Full Prospectus and the Fund’s Simplified Prospectus for more information. The distribution and the offering of funds in certain jurisdictions may be restricted by law.
Persons into whose possession this document may come are required to inform themselves about and to comply with any relevant restrictions.
This does not constitute an offer or solicitation by anyone in any jurisdiction in which such an offer is not authorised or to any person to whom it is unlawful to make such an offer or solicitation.
Persons interested in acquiring shares in the Fund should inform themselves as to (i) the legal requirements in the countries of their nationality, residence, ordinary residence or domicile; (ii) any
foreign exchange controls; and (iii) any relevant tax consequences. The Fund is not registered under any US securities law, and may not be offered or sold in the USA, its territories or possessions,
nor to any US persons. The Fund is not publicly offered for sale in any jurisdiction in which the Fund is not authorised to be publicly sold. The Fund is available only in jurisdictions where its
promotion and sale is permitted.
INVESTMENTS IN ANY OF THE SUB-FUNDS OF MACQUARIE FUND SOLUTIONS ARE NOT DEPOSITS WITH OR OTHER LIABILITIES OF MACQUARIE BANK LIMITED OR OF ANY ENTITY IN
THE MACQUARIE GROUP AND ARE SUBJECT TO INVESTMENT RISK, INCLUDING POSSIBLE DELAYS IN REPAYMENT AND LOSS OF INCOME AND CAPITAL INVESTED. NEITHER
MACQUARIE BANK LIMITED NOR ANY MEMBER COMPANY OF THE MACQUARIE GROUP GUARANTEES ANY PARTICULAR RATE OF RETURN OR THE PERFORMANCE OF ANY OF THE
SUB-FUNDS OF MACQUARIE FUND SOLUTIONS, NOR DO THEY GUARANTEE THE REPAYMENT OF CAPITAL FROM ANY OF THE SUBFUNDS OF MACQUARIE FUND SOLUTIONS.
The Fund is a sub-fund of Macquarie Fund Solutions, a Luxembourg SICAV. The Articles, the Prospectus and the Simplified Prospectus as well as the annual and semi-annual reports can be
obtained in the United Kingdom free of charge at the Information and Paying Agent Macquarie Bank International Limited, 1 Ropemaker Street, London EC2Y 9HD, in Germany free of charge at the
Information and Paying Agent Deutsche Bank AG, Junghofstraße 5-9, 60311 Frankfurt/Main, Germany and in Austria at the Information and Paying Agent Erste Bank der österreichischen
Sparkassen, Graben 21, A-1010 Vienna, Austria.
Representative in Switzerland: ACOLIN Fund Services AG, Stadelhoferstraße 18, CH-8001 Zurich, Switzerland www.acolin.ch. The Articles, the Prospectus and the Simplified Prospectus and the
annual and semi-annual reports can be obtained free of charge at the Swiss Representative.
Paying Agent in Switzerland: RBC Dexia Investor Services Bank S.A., Esch-zur-Alzette, Zurich Branch, Badenerstraße 565, CH-8066 Zurich, Switzerland.
Issued and distributed in the United Kingdom by Macquarie Bank International Limited, 1 Ropemaker Street, London EC2Y 9HD. Authorised and regulated by the UK Financial Services Authority.
Issued in Switzerland by ACOLIN Fund Services AG, Stadelhoferstraße 18, CH-8001 Zurich, Switzerland.