NAV on 2019/09/13
|NAV on 2019/09/12
|52 week high on 2019/05/03
|52 week low on 2019/08/27
|Total Expense Ratio on 2019/06/30
|Total Expense Ratio (performance fee) on 2019/06/30
Sanlam Collective Investments
FTSE/JSE Shareholder Weighted All Share Index (SWIX)
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First Avenue SCI Equity Fund - Jun 19
During Q2 2019, several respected JSE listed companies experienced substantial drawdowns which is becoming a common trend in the current SA economic environment. These include Tongaat (-39%), Intu Properties (-33%) and Omnia (-31%). We have recently added a new component to our research methodology that assists us in avoiding such companies that permanently destroy shareholder capital. The process, known as negative selection, focuses on forensic accounting, mergers & acquisitions and ESG and has been instrumental in helping us avoid such drawdowns in our portfolio. Assisted by this process enhancement, the fund outperformed its benchmark in the quarter as quality stocks exposed to the domestic economy experienced a rebound after being sold down to excessively low valuations over the past 2-3 years. These include quality SA banks, consumer goods and services. In addition, cyclical companies (e.g., materials), which we have low exposure to, underperformed the benchmark during the quarter. Our view is that we are close to reaching an inflection point where SA domestics take over market leadership from resources and this will be positive for the fund going forward.
The fund aims to deliver long-term capital and income growth in excess of the market index while offering a higher degree of capital protection to investors by limiting its universe to listed equities of low fundamental risk. Aiming for high returns with lower fundamental risk - We invest in high quality companies as this strategy has been shown to outperform the market most consistently and with low risk over long periods of time. The idea is to reduce the probability of permanently impairing shareholder capital by desisting from taking risky bets. Our franchise value lies in differentiated research into the industry dynamics that drive company profitability. The portfolio may invest in participatory interests of underlying unit trust portfolios. The portfolio may also invest in collective investment schemes in property as well as any other securities that the Act may allow from time to time. When investing in derivatives, the manager will adhere to prevailing derivative regulations.