Annual General Meeting (BRFI)

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Thank
you so much, Katrina, and good afternoon.

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We are often you know,
we are a good afternoon,

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everyone,
and thank you so much for being here.

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So just to take you through a little bit
about sort of

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how we're thinking about the trust, where
the fund is positioned at the moment.

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There's really sort of three main themes

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for sort of why we think
this part of the world is interesting.

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Where we think there's opportunities
and what we like to invest in.

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You can see on the left hand
side, actually,

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where the fund is currently invested.

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So just to give a flavor of the countries.

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But really what we're looking for
is trying to find markets that we think

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are really generally
underrepresented in people's portfolios.

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So just as a reminder,
we take, the emerging markets index

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and we take out, 
the seven of the large markets.

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So we take out Brazil, China, India,

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Mexico, South Africa, Korea and Taiwan.

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We don't invest there.

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And then we really invest in
anything else.

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Sort of below that.

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So any of the smaller emerging frontier
market countries would be where we invest.

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We choose that as a universe
because we think it's a part of the world

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that's really underrepresented.

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So we think if you take, 
a good sample of sort of 100,000 investors

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across the UK
and would analyse their portfolios,

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I think very few of them
would have a large allocation

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in their portfolio to say, Hungary, or,

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Indonesia or the Philippines
within their portfolios.

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So we think these markets
are really underrepresented, and that's

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despite them representing a very large
percentage of the world's population.

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We think
these markets are under-researched.

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So if we look at a lot of the companies
in our portfolio,

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there are very few analysts
covering them externally.

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To us, and where there are analysts,
the vast majority of them will be

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local analysts in their local countries
who are covering them.

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Some of those analysts are excellent
in those local countries.

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But if you have a single utility company

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in your country, you may analyse it
very well, but you probably haven't seen,

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the ways in which utility companies
have gone on to either do

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well or badly globally.

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So we think there's a huge opportunity
by looking at lots of different markets,

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to really be able to, to make alpha

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from some of these companies that we think
are really under-researched still.

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And finally, we would contend that
the universe is still very undervalued.

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So cheap relative to its own history.

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Cheap relative, to other markets.

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And very much, I
think, cheap in an absolute sense as well.

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So we are investing in markets
that are underrepresented,

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under-researched and undervalued.

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You can see on the map
some of the countries

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where we're currently invested.

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So you can see it's a very broad,

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and geographically well diversified,
I think, and well spread,

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portfolio.

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Moving on then, to
what we've been doing over the past year.

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You can see quite a substantial portion
of the portfolio has gone

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into some of the smaller countries 
within our universe,

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very much at the small end.

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And, for those of you
who were here in 2016,

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these might well be familiar names,
that we talked about the companies

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we liked in
some of these countries at that point.

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I know some of you were here then,
so I'm sure you remember.

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So at that point,
we had large percentage about sort of up

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to 35% of the portfolio across
seven of the smaller names.

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And these are really

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the markets at the smaller
end of the universe that we look at.

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We actually took that all the way down
to pretty much zero.

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Actually, if you look at the end of 2023,
it does show

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that there was sort of 4% left, but
the vast majority of that was in Turkey.

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And actually there we held a gold minor.

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So I think it doesn't really count.

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Probably as domestic investor,
it's more about what was happening,

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in the commodities market.

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So you can see excluding
that came all the way almost down to zero.

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And now it's back up to around
just over 30% of the portfolio.

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We haven't gone back
into all of those countries.

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We're invested then,
but we have gone back into five of them.

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And I

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think there's a bit of a common theme
across all of them.

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He's a countries
which saw inflation go up a long way.

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They saw interest rates
go up a long way down.

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During that time we also had Covid.

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So the governments ended up
quite indebted.

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They had to do an austerity program.

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Unlike the UK
or the US, where you can just print a bit

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more money, that was isn't really
the option in these smaller countries.

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So we had a bit of an austerity program

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obviously has quite an impact
on domestic consumption.

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At the same time, because of Covid,
I think households end up

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ended up quite extended
and had to have a few years again

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where they needed to see some real wage
growth

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come through to repair household
balance sheets as well.

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Having had that, we've had government
balance sheet repair, we've had household

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balance sheet repair.

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We're seeing interest rates
come down quite a lot.

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Because actually inflation, I'd say,
and pretty much all the countries

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we look at globally,
is it pretty low levels versus history.

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I'd say it's below the historic average.

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Pretty much everywhere

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we're looking at across emerging
and frontier countries at the moment.

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So those out of that
we're seeing countries cut interest rates.

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We're seeing economies
start to do better and markets

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tend to actually do
well in advance of that, really.

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Even so, start to do well even before
they see that really come through.

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And a good example of that,
I think, is Pakistan,

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where actually the market
there was up nearly 100%

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last year in calendar year 2025.

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Which is really interesting, I think
given given where that country's at.

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So I'm going to hand over to Sam
to talk through the next couple of slides.

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So with... we’re look a bit to the more broadly,
back to the point

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that Emily made, if you look at the top
left of this slide,

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it's a point that Emily,
I said alluded to earlier

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that the markets we invest in
are about 34% of the world's population.

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In terms of market cap, they are about 1%.

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And in terms of weight in global indices,
if you can just about

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make out that green line for there's
not even a block,

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there, about 0.1
percent, of global indices.

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And that's really kind of interesting.

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If one thinks about it,
that such a large proportion,

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roughly a third of the world's
population, completely ignored,

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when it comes to investment,
obviously there are smaller portion

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of global GDP,
but still a sizable portion of global GDP,

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but completely irrelevant,
in the way indices are constructed today.

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If we now move on to the top
right of this chart,

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this is a slide that we've had in
for many years.

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In our presentation, you can see

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and this surprises people
that actually the benchmark

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that, we're aware of for
our trust is less volatile.

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It moves about on a daily basis
less than the S&P,

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less than emerging markets,
less than the FTSE All-Share.

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And this is the point that people
are often surprised about

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because we're investing
in all these countries,

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whether it's Pakistan

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and Bangladesh or Kenya and others,
that would seem to be really volatile.

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But when you put them all together,
they're not very volatile

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because there's no correlation

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between these,
because when there's a crisis in Kenya

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that tells you very little about
what's going on in Chile, when there's

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some great story in Kazakhstan,
it doesn't really reflect on Vietnam.

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And this is one of the great features
of our investment trust, of our fund

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that has fairly little volatility
despite the underlying

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market, seemingly being very volatile.

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If we look at the bottom left of this
slide, again, a slide that we've had in

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for many years, Emily and myself
don't have too many new ideas, sadly,

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but this does speak to the
consistency of message, if nothing else.

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It's about the valuation,
of these markets.

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And you can see that our investment
trust trades in about

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nine times
earnings, far lower than the S&P.

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About a third of the multiple of the S&P,
about a half of the multiple

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of the FTSE All-Share.

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And obviously these countries are growing
considerably faster.

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And then if we look at the bottom right,
this is actually a slightly new,

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variation of a slide
that is an old slide, which is that

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if one thinks in dollar terms, the, 
dividends of this fund

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have grown by about just under 10%

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per year, since we kicked off in 2011.

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Really reflecting the underlying earnings
growth of the companies,

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that we see, 
and that we invest in on a daily basis.

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If we go on to the next slide, 
this is the point

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I was alluding to a minute ago,
just about the correlation.

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And this is really quite important
if one thinks about it,

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because if one invests
in the Western world,

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when there's a problem in the US,
then all markets go down.

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We can be fairly sure that if
this afternoon the Dow was to go down 3%,

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the FTSE would be unlikely to be up
this afternoon, probably be down

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quite a bit to, and that would be true
for markets in Germany and Japan,

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tomorrow, they all move together.

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What's interesting about all markets,
is they really don't move together.

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And you can see this, we've
sort of put a correlation matrix up here,

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and you can see the extent
to which the markets

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that we invest in
are either correlated or very loosely

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correlated, are actually inversely
correlated, with, with each other.

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So for example,
if we look at Bangladesh, easy to spot

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because it begins with a B, you'll see
it's actually inversely correlated with Chile.

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So on average day when Bangladesh goes up
remarkably, Chile actually goes down.

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And you can sort of see across, this,
this chart,

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the slide, the markets that we invest in
aren't highly correlated,

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which is, really good,
when it comes to investing.

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And if we go on one more slide,
perhaps the more good news,

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which is this slide,
they weren't always looked like this,

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because we weren't
always outperform over so many periods.

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But it's kind of good to see that year
to date in 2026, early in the year.

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It's a nice, positive start to the year,
both in absolute and relative terms.

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2025 was nice and positive
and relative in absolute terms.

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In 24 and 23.
So it's not true every year.

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But if we look at the much more important
longer term time frame over one, three,

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five years and since inception,
you can see it's a pretty good story

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of absolute returns, and relative returns
for those who have been with us.

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And as I only said, it's really great
to see many people, here today

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who have been with us, 
really since we kicked off, 15 years ago.

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And with that, good news,
I hand it back to Emily.

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Fantastic.

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Thanks Adam.

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We're just going to try
and give you a little bit more detail

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then of sort of how the portfolio
is positioned at the moment.

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And, I'm sorry, the slides on the screen.

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Look, I have quite small writing,
so hopefully you can see it

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on your packs as well.

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And if not, you don't have one there else
and more at the side.

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But I think,

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you know, the message from us here
really is that if you look at the pull

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the pie chart on the left,
that it's really nicely diversified,

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so you can see it spread
between a lot of different countries.

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And we really like to have
that diversification in our portfolio,

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picking up really interesting stocks and
just really different parts of the world.

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And this isn't going to be
therefore determined

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by what's happening in a single country,
a single area of politics.

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It really is going to be a lot of sort
of idiosyncratic bottom up, stock

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specific risks that are driving returns,
in the portfolio,

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as Sam talked about with that correlation
slide.

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So countries
that we like in the moment, at the moment

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you can see have come up, you can see
quite a large weight in Turkey.

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We're hoping that some of the reform
agenda we're seeing

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on the economic side really starts
to come through some really cheap stocks.

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They're trading on 2 to 3, four times p.

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We're invested in at the moment.

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You can see somewhere like Kenya,
you know, that's reentered the portfolio.

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Again, a couple of
really interesting companies there.

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It's been doing quite nicely year to date,
but from just, again, a really low

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starting point.

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One of the banks that we have
that we actually bought on 1.8 times PE,

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which
which we had to just check the numbers

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a few times
because we couldn't quite believe

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that was the valuation
when we did that one.

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But but nice to be
able to find it when you can.

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So if we move on to the next slide,
you can see position

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relative to the benchmark.

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We don't think about it
this way too much.

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But it is obviously there.

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I think the country to sort of note here
is that of Egypt at the top left.

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Again,
that's a country that we've gone back to

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in the last couple of years,
having had almost nothing there.

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We went back to it post the devaluation.

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We think it's in
quite an interesting space at the moment.

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As we're just starting to see
an increase in volumes coming through

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Suez Canal, Suez Canal volumes
go back to where they were.

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That's about 1.5% of GDP.

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So quite significant export earnings
for them.

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And the other thing
that we have represented in our portfolio

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in Egypt is, exposure
to sort of fintech and digitalisation.

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And I think some of the big technology
changes we're seeing,

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having quite a big impact there.

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So in a country where banking population
penetration is still in the 20s,

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you know, being able to reduce the cost
to serve to a banking customer

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could have some really interesting
implications. There.

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You move on to the next slide.

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You can see the top ten,
in the portfolio.

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And again to pick out just some slightly
different names and themes.

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If you go down the list,
there's a company there called Rassam.

00:13:16:13 - 00:13:17:08
Yeah.

00:13:17:08 - 00:13:18:26
I don't know if you'll be familiar
with that or not,

00:13:18:26 - 00:13:23:25
but it's an insurance company in Saudi
Arabia actually having, motor insurance.

00:13:23:25 - 00:13:25:22
So when you drive is compulsory

00:13:25:22 - 00:13:28:22
in Saudi Arabia,
but I think about 75% of people have it.

00:13:28:29 - 00:13:31:20
So you can see quite a lot of growth
just to catch up with

00:13:31:20 - 00:13:33:02
with where people should be.

00:13:33:02 - 00:13:34:23
That can happen there.

00:13:34:23 - 00:13:35:24
And that's quite it's

00:13:35:24 - 00:13:38:14
a leader in that space
and doing quite nicely on the back of,

00:13:38:14 - 00:13:41:27
increasing enforcement of people
just having motor insurance

00:13:41:27 - 00:13:43:29
that they should have, in that country.

00:13:45:03 - 00:13:48:09
If we move on to the next slide,
maybe a little bit more interesting,

00:13:48:09 - 00:13:51:09
it's just showing you changes
that we've made over the past year.

00:13:52:00 - 00:13:54:04
And again, you know, on the left
hand side, you can pick up

00:13:54:04 - 00:13:57:04
some of the interesting opportunities
we've moved into and see,

00:13:57:06 - 00:14:00:22
you know, that increase in weight
in, in Turkey, Egypt

00:14:00:22 - 00:14:03:23
I think has been left off the top because
that would that would certainly be there.

00:14:03:23 - 00:14:05:02
So I apologize for that.

00:14:05:02 - 00:14:08:28
But you can see increase in weight
in Turkey a little bit more in Kazakhstan,

00:14:09:05 - 00:14:12:07
Poland doing quite nicely as well
and really benefiting,

00:14:12:07 - 00:14:15:05
I think, just from outsourcing
from Western Europe to Eastern Europe,

00:14:15:05 - 00:14:17:26
just as a, a lower cost place
of doing business.

00:14:17:26 - 00:14:21:23
Again, it's something I think that's been
talked about for probably 15, 20.

00:14:21:23 - 00:14:23:25
I'm underselling that maybe 25 years,

00:14:23:25 - 00:14:26:25
but it's still very much true
and happening and coming

00:14:26:25 - 00:14:29:29
through, and leading to some really nice
growth in Poland at the moment.

00:14:32:24 - 00:14:33:20
So I'm sure there'll

00:14:33:20 - 00:14:36:01
be a few more questions on the areas
that are where we're invested,

00:14:36:01 - 00:14:37:15
and we'll be very happy
to take some in a minute.

00:14:37:15 - 00:14:40:15
But if I hand back to Sam,
then for the final slide

00:14:41:15 - 00:14:44:08
and once again, no change here,

00:14:44:08 - 00:14:47:06
a slide that's been for those people
who had the AGM last year,

00:14:47:06 - 00:14:49:23
they'll recognize this slide
because what we've been saying

00:14:49:23 - 00:14:52:02
for the last 15 years
continues to be true.

00:14:52:02 - 00:14:55:02
These are markets
with growth is at companies with growth.

00:14:55:09 - 00:14:59:01
These are companies yielding
quite significant amounts of cash

00:14:59:01 - 00:15:02:15
which
which obviously we pay to our investors.

00:15:02:28 - 00:15:04:10
They are cheap valuations.

00:15:04:10 - 00:15:07:21
These markets continue
to be a lot cheaper, as Emily said,

00:15:07:27 - 00:15:09:15
than what we see around the world.

00:15:09:15 - 00:15:12:05
And the low volatility is something
which I touched on earlier.

00:15:12:05 - 00:15:14:08
That's what the markets give to us.

00:15:14:08 - 00:15:15:27
And then we put that together

00:15:15:27 - 00:15:18:17
with our approach,
which is active management.

00:15:18:17 - 00:15:20:25
We don't need to be in
any particular country.

00:15:20:25 - 00:15:22:29
We're happy to walk away from any country

00:15:22:29 - 00:15:25:03
if we think it's going
in the wrong direction.

00:15:25:03 - 00:15:27:23
This is not a single region,
not a single country fund

00:15:27:23 - 00:15:31:24
where we'd have to speak to you positively
about the wonders of whichever country

00:15:31:24 - 00:15:35:10
it was on, an annual basis,
if we don't believe it ourselves.

00:15:35:17 - 00:15:38:14
So active management is really important
for us.

00:15:38:14 - 00:15:42:22
We focus on hard currency returns,
as I say, every year returns

00:15:42:22 - 00:15:46:23
and quotes and chanira, Kwanza or
any other currency are not relevant to us.

00:15:46:23 - 00:15:52:12
We think about dollar returns, liquidity
management, is very important for us.

00:15:52:12 - 00:15:54:22
All our stocks trade every single day.

00:15:54:22 - 00:15:59:01
No mark to make believe, no level
three assets, no pre-IPO situations,

00:15:59:09 - 00:16:03:11
no fun and games listed stocks that
anyone here with a Bloomberg terminal,

00:16:04:01 - 00:16:06:19
with a Bloomberg
terminal could value themselves

00:16:06:19 - 00:16:09:26
in about 10s and then discount management
that's very relevant this year.

00:16:09:26 - 00:16:13:29
Perhaps a bit more relevant this year
than last year as we've committed,

00:16:13:29 - 00:16:17:17
as we did in 2016, 2021 and now 2026,

00:16:17:27 - 00:16:22:12
to have, a five year,
exit opportunity for investors

00:16:22:12 - 00:16:26:20
and the Chair will reflect a bit
more on this in a few minutes,

00:16:26:20 - 00:16:27:19
but really important

00:16:27:19 - 00:16:31:26
to keep our discount tight and narrow
or even trade at a premium where possible.

00:16:31:26 - 00:16:36:05
So we continue to be really excited
about the outlook for frontier markets

00:16:36:05 - 00:16:39:10
and the specific countries and companies
we're investing in.

00:16:39:10 - 00:16:40:29
We think there's a great strategy,

00:16:40:29 - 00:16:45:02
great structure, and we're really happy
and proud to stand here for now.

00:16:45:04 - 00:16:48:05
15 AGM's and said broadly the same thing,

00:16:48:05 - 00:16:51:12

but in the same time, I've managed to make
some pretty decent returns

00:16:51:12 - 00:16:53:14
for investors. Thank you very much.