Results

Financial results

The net result of Triodos Microfinance Fund for 2014 amounts to EUR 12.5 million (2013: EUR 9.3 million). The fund’s interest income from loan investments increased by 59.6% to EUR 10.4 million in 2014 (2013: EUR 6.5 million), which is in line with the growth rate of the portfolio. In addition, the fund received dividend income from two equity investments, amounting to EUR 0.8 million (2013: EUR 0.9 million).

The fund realised a gain on investments of EUR 5.1 million as a result of the sale of shares in ACLEDA Bank. The realised losses on investments are related to the sale of shares in Mibanco (EUR 1.5 million). The net increase in the value of the investments is an exceptional result: EUR 13.6 million. This amount consists of a gross EUR 20.8 million increase in valuations, of which EUR 14.5 million from exchange rate differences as a result of the volatile currency markets towards the end of 2014. The gross amount is adjusted for EUR 6.2 million, consisting of a reclassification of EUR 3.9 million to realised gains and losses resulting from the sale of the two equity investments and EUR 2.3 million provisions that have been taken on non-performing loans.

The fund made a net unrealised loss of EUR 11.7 million (2013: unrealised gains of EUR 3.4 million) on foreign exchange contracts during the same period. These losses have to a large extent nullified the appreciation of the portfolio as a result of foreign exchange fluctuations. Total expenses in 2014 came to EUR 4.2 million (2013: EUR 3.3 million). The bulk of these expenses relates to management, distribution and service fees, which rose to EUR 3.6 million (2013: EUR 2.9 million) and are in line with the growth of the assets under management.

Return

The return in the EUR-denominated institutional share class was 6.0% (2013: 7.2%). In the first six months of the year, the fund had relatively high liquidity levels as a result of the sale of the two equity investments and strong inflows from investors. This additional inflow was almost fully absorbed in the second half of the year, when disbursements of new investments peaked and led to a higher investment ratio and increased returns in the same period. The return was furthermore negatively affected by the provision on a non-performing loan in Bosnia Herzegovina. Differences in the performance of share classes are mainly attributable to the different cost bases, as explained below in the Costs section.

Return* based on net asset value (NAV) per share

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Share class

1-year
return p.a.

3-year
return p.a.

5-year
return p.a.

Return p.a. since inception

 

 

 

 

 

*

The return includes reinvestment of dividends, including costs.

**

The Z-share class has a limited history. Historic returns are based on the similar R-share class which has an identical investment policy.

***

The GPB-denominated share classes are hedged against the euro.

Source: RBC Investor Services Bank S.A. and Triodos Investment Management

B-cap (EUR)

5.3%

6.5%

5.7%

5.2%

B-dis (EUR)

5.3%

6.5%

5.7%

5.2%

I-cap (EUR)

6.0%

7.3%

6.5%

5.8%

I-dis (EUR)

6.0%

7.3%

6.5%

5.7%

R-cap (EUR)

5.3%

6.5%

5.7%

5.3%

R-dis (EUR)

5.3%

6.5%

5.7%

5.3%

Z-cap (EUR)**

5.8%

6.7%

5.9%

5.4%

Z-dis (EUR)**

5.8%

6.7%

5.9%

5.4%

KB-cap (GBP)***

5.3%

6.7%

5.4%

KB-dis (GBP)***

5.3%

6.7%

5.0%

KI-dis (GBP)***

6.1%

7.5%

6.6%

5.8%

KR-dis (GBP)***

5.4%

6.7%

5.8%

5.1%

KZ-cap (GBP)***

5.9%

5.8%

KZ-dis (GBP)***

6.0%

6.2%

 

 

 

 

 

Liquidity

Triodos Microfinance Fund aims to retain a minimum of 10% of its net asset value in cash or cash equivalents, in order to facilitate redemptions in the fund. The fund’s liquidity and other current assets at year-end was 12.5%. Liquidity levels were higher during the first 6 months of the year and came down during the last 6 months as the result of higher disbursement levels. The fund has approved and committed investments of EUR 8.7 million as per December 31, 2014, including EUR 7.7 million in new equity investments.

Costs

The largest item in the cost structure of Triodos Microfinance Fund is the management fee paid to the Investment Manager, Triodos Investment Management. Triodos Investment Management uses this fee primarily to cover staff costs, including travel expenses incurred in connection with providing new finance facilities and managing existing finance facilities. This is generally quite an intensive process, especially the management of the fund’s equity investments, which requires frequent trips to the countries where investments are made.

The ongoing charges for Triodos Microfinance Fund, which include the management fee, ranged from 2.00% to 2.05% for institutional share classes and from 2.26% to 2.72% for the other share classes. More detailed information on management fees and ongoing charges can be found (PDF:) in the notes 5 and 6.

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