NAV on 2019/01/18
|NAV on 2019/01/17
|52 week high on 2018/11/09
|52 week low on 2018/02/01
|Total Expense Ratio on 2018/09/30
|Total Expense Ratio (performance fee) on 2018/09/30
Allan Gray Unit Trust Management (RF) Pty Limited
South African--Multi Asset--Low Equity
Daily interest rate as supplied by FirstRand Bank Ltd.
Allan Gray Optimal comment - Sep 18
Thank you to all the investors who remained invested over the past year despite increased return volatility. We hope you are pleased with the improved Fund performance and reduced volatility. Rest assured that lessons have been learnt and we will continue to work hard to achieve the Fund’s objective of delivering positive long-term returns that don’t depend on the stock market.
During the third quarter, the Fund returned 4.9%, despite the stock market returning -2.2%. Over the latest one-year period the Fund returned 10.5%, compared to the stock market’s 3.3%, and over three years it returned 8.1%, versus 6.7% for the market.
This quarter’s return was achieved as a result of the Fund remaining almost fully hedged, with a net equity exposure of only 4.4%, and the Fund’s shares outperformed the stock indices we use for hedging.
During the quarter we sold a further 48% of the Naspers stub certificate position as the price of the certificate increased. We believe the remaining position still offers upside given the 44% discount Naspers is trading at to our estimated intrinsic value, but the reduced weighting should have a smaller impact on the Fund’s volatility. One indication of the reduced volatility in Fund returns is the volatility of daily returns, which were 46% lower in the quarter than in the last 12 months, and was lower than the average daily volatility since we changed our internal rules in April 2014 to allow for more flexibility in managing the Fund.
During the quarter we bought Investec, Glencore and Standard Bank and sold Sasol, Naspers and its stub certificate. At the end of the quarter, our top three overweight positions are British American Tobacco, Naspers and Glencore and our top three underweights are BHP Billiton, Richemont and FirstRand (and Anglo American, if the indirect FirstRand holding via RMB Holdings is taken into account).
Commentary contributed by Ruan Stander
The Fund invests mainly in selected shares and it uses exchange-traded derivative contracts on stock market indices to substantially reduce its net equity exposure to within a range of 0-20%. As a result, the Fund's return depends on the level of short-term interest rates (implicit in the pricing of the sold futures contracts) and the performance of the Fund's selected shares relative to the stock market index. The Fund's return is therefore unlikely to be correlated with equity market returns. In addition, a portion of the Fund is typically invested in cash and margin deposits.