NAV on 2019/09/18
|NAV on 2019/09/17
|52 week high on 2019/04/23
|52 week low on 2018/11/23
|Total Expense Ratio on 2019/06/30
|Total Expense Ratio (performance fee) on 2019/06/30
Fairtree Asset Management (Pty) Ltd.
FTSE/JSE Capped Shareholder Weighted All Share Total Return Index (Capped SWIX)
Stephen completed his MBA at Stellenbosch Business School in 1996. He began his Asset Management career in 1997 as an Industrial Analyst with Southern Asset Management. In 2000 he joined RMB Asset Management as a Diversified Industrial Analyst and remained involved in industrial research until 2007. In 2001 he moved into the Resources team also as an analyst. He progressed to Head of Resources research in 2007, and held the position until the end of 2009 when he moved permanently onto portfolio management of institutional and retail portfolios. In 2001 he qualified as a CFA. He began his Portfolio Management career in 2002, managing the RMB Value Fund, and became a full time Portfolio Manager of Institutional Balanced Funds and Retail Equity Funds in 2010. Stephen joined Fairtree Capital in 2011 as a Portfolio Manager and currently manages the Fairtree Assegai Long Short Equity Fund and the Fairtree MET Equity Fund.
Cor started his career in the mining industry in 1996 as an engineer for De Beers. Between 2000 and 2008 he was involved in management consulting, working for Bain & Company and Seabury Group where he advised corporations in Johannesburg, New York and Sydney on strategy, operational optimisation and revenue enhancement. During this time, he gained in-depth knowledge of the mining, telecommunication, aviation, public sector and manufacturing industries. Cor moved to the fund management industry in 2008, where he was head of resources and a fund manager at RMB Asset Management, and a subsequently as sell-side analyst for HSBC, covering the platinum and diversified mining sector. In 2012 Cor joined Fairtree to co- manage the Fairtree MET Equity Fund. Cor ascribes his initial value investment style to the influence of investment icons such as Benjamin Graham and Warren Buffet. However, with experience in management consulting he realised the importance of strategic positioning of companies within an industry and their relative competitive advantage tying into the quality of their business.
Fairtree MET Equity comment - Dec 16
The FTSE/JSE All Share Index (ALSI) had a good December returning 1.0%. The election of Trump as US president provided some support for commodities on promises of US fiscal stimulus. South African sovereign credit has not been downgraded to junk status, but remains on negative outlook. Political uncertainty is still elevated locally. The Rand appreciated by 2.6% during the month, ending the year as the third-best performing EM currency.
Resources had a weak December, decreasing by -3.6%. Financials and Industrials increased by 3.5% and 1.8% respectively.
During December, Bonds increased by 1.6% and Cash returned 0.6%. The MSCI Emerging Market Index increased 0.3% (USD), underperforming the MSCI World Index which increased by 2.2% (USD).
The cyclical upturn in commodities continued to be supported during December with price changes ranging from -2 % to +12% during the month. During December Iron Ore increased by 1 0% to $77.9/t, Thermal Coal increased marginally by 0.5% to $84/t, while Manganese ended the month down 1 %, but still at a very elevated $9.0/mtu at the end of December. Brent Crude oil increased by 12%, ending on $56.8/bbl. Gold $1,148/oz and Platinum $903/oz were down 2% and 1% respectively. Commodities have been supported by record monetary stimulus by China since November 2 015. Going forward we expect policy makers in developed markets to turn their attention to commodity intensive fiscal stimulus as a means to return their respective economies to trend growth.
The VIX Index (Volatility or 'Fear' Index) increased by 5% to 14 during December.
Movements in commodity prices from current levels have a leveraged impact on the cash flow generation of commodity producers. At current commodity prices many commodity producers are generating healthy free cash flows as a result of margin uplift and large cuts in capital expenditures. Declines in commodity prices could negatively affect cash generation, whilst moderate increases in commodity prices could make for appealing investment cases. We expect significant share price volatility going forward in the sector.
During December, the fund's performance was positively affected by positions in Sappi (+9%), Steinhoff (9.5%), Truworths (13.6%) and Foschini (7.3%), while positions in Naspers (-2%), Anglo (-8%), Shoprite (-8.3%) and African Rainbow (-8.3%) detracted from the performance.
The fund invests in a number of focussed strategies. Amongst these strategies we continue to be overweight Earnings Growth (Consumer Discretionary), Cyclical (Resources), Value and Yield (Financials, Consumer Discretionary). During 2016 we have increased our position in commodity driven cyclical shares where free cash generation is positive at spot prices and decreased our exposure to Defensives (Consumer Staples, Healthcare). The fund has exposure to Rand hedge equities which totals around half of the portfolio.
The Fairtree Equity Prescient Fund will be a general equity fund. The objective of the fund is to offer medium to long term capital growth. In order to achieve this objective the fund will invest in selected shares across all industry groups as well as across the range of large, mid and smaller cap shares. The fund will seek to capture value by focussing on equity selection opportunities. The portfolio will predominately invest in South African markets, but is however permitted to include investments in offshore jurisdictions subject to the investment conditions determined by the Registrar from time to time. The portfolio is permitted to invest in listed and unlisted financial instruments in line with the conditions as determined by legislation from time to time.