The unaudited semi-annual report as at 30 September is now available!
The Luxembourg Microfinance and Development Fund has published its unaudited semi-annual report that covers the period from April to September 2017. In this edition, we decided to focus on the views of our Investors, who represent the growing numbers of those who look beyond financial returns and seek also to align their investment assets with their values and principles.
In line with its mission, the Fund has revised its strategy and the focus has been on small Tier 3 microfinance institutions; on geographic expansion, particularly in Asia; and the implementation of more attractive financial products. This semester, the Fund’s microfinance portfolio grew by 6% to EUR 21.9 million. The level of liquidity has also stabilised since the implementation of the revised strategy, and began to decline. Significant progress in the expansion of the fundraising efforts model was deployed, particularly for Class C shareholder subscriptions totalising 29% of the NAV (26% at end-March 2017). Class C shares beneficiate of a risk protection from class A and Abis. ADA’s shares were converted to Abis shares at the launch of the new share class.
LMDF is currently working on its second edition of the Social Performance Report, a report that will allow the Fund to identify its strengths and weaknesses in implementing its vision and mission, and thus measure its results.
Excess liquidity continues to negatively impact the fund. One of the strategic priorities is to improve the operational effectiveness of the LMDF. The TER decreased significantly from 3.2% to 2.6% (annualised) during this period. This decrease is due to the high level of liquidity which led to a decrease in the investment adviser’s remuneration (paid on basis of investments in microfinance) and the absence of significant losses on the portfolio. Net returns were 1.0% for class A, 0.6% for the Abis class, 0.8% for class C and 1.4% for class B. This compares to -0.2% performance of the current microfinance debt index for the same period (SMX Symbiotics Euro index).