NAV on 2019/09/17
|NAV on 2019/09/16
|52 week high on 2018/09/21
|52 week low on 2019/08/27
|Total Expense Ratio on 2019/06/30
|Total Expense Ratio (performance fee) on 2019/06/30
Bridge Fund Managers (Pty) Ltd.
Average of the ASISA South African Equity General sector
Ian joined Grindrod Asset Management as Chief Investment Officer in September 2009. Prior to that, he ran his own consultancy where his clients included Marriott Asset Management, Fortress Asset Managers (part of the Resilient group of companies) and the Property Loan Stock Association of South Africa. Ian was the Investment Director at Marriott Asset Management from 2002 to 2007, having joined the firm as an Investment Analyst in 1996. Ian has been involved in the management of specialist listed property portfolios for the past 15 years.
Andrew joined Grindrod Asset Management in early 2013 and is currently a Portfolio Manager. Andrew has worked as a Product Development Analyst at Symmetry within the Old Mutual Group and then in the offshore hedge fund division at Maitland. Prior to joining Grindrod Asset Management, Andrew worked at Insinger de Beaufort BNP Paribas, a boutique asset manager and family wealth office. The company’s head office is in Amsterdam and the parent company BNP Paribas is based in Paris. As a member of the investment committee Andrew was responsible for global fund research, analysing all investment products including the more exotic asset classes of hedge funds and structured products. He was also responsible for much of the reporting and analysis of client portfolios including attribution reports and compliance with GIPS reporting standards. He also traded and balanced all offshore and local private client investment mandates and was actively involved in the management of the South African Fund of Funds within the firm.
Richard has over 12 years of investment experience which he gained in both the UK and South Africa. He spent 9 years in London working for global investment manager Schroders Investment Management, and hedge funds Trafalgar Asset Managers and CapeView Capital LLP. There he gained valuable insight into various investment strategies including long-only, event-driven, credit, private equity and long-short equity. He returned to South Africa in 2013 and worked for Atlas Trading (Grindrod) before joining Bridge Fund Managers (formerly Grindrod Asset Management) in 2014.
Bridge Equity Income Growth comment - May 19
Trade relations between the United States and China continued to sour during May, with both countries threatening to increase tariffs on a range of products as negotiations broke down again. It is becoming increasingly clear that the United States has no intention of backing down until it has rewritten the rules of global commerce in its favour. Against this uncertain backdrop, global economic activity has been slowing and central bankers have responded by promising countermeasures in the form of more accommodative monetary policy. Market participants now expect the US Federal Reserve to cut interest rates by 0.25% by the end of July. Other central banks have already responded by cutting official interest rates to stimulate local demand to offset the impact of lower global commerce.
In the UK, Prime Minister Theresa May announced her resignation and will become caretaker prime minister until the Conservative Party chooses her successor. Her party has indicated that a successor could be chosen as early as the end of July, with ex-London mayor, Boris Johnson, the early front-runner in the race to succeed her. May’s resignation continues to muddy the Brexit waters and her successor is unlikely to make a meaningful difference to the current situation. The chance of the UK exiting the European Union without a deal has now risen appreciably and is likely to place a further dampener on economic activity in 2019.
Global bond yields fell appreciably in May as investors focussed on how quickly central banks would respond to the threat of higher tariffs and a prolonged trade war between the United States and China. The yield of 2-year US Treasuries dipped below 2% again, while the yield on 10-year US Treasuries dropped almost 40 basis points to 2.13% by the end of the month. In Europe, the yield on 10-year German bunds fell to minus 0.21%.
In South Africa, the ANC secured victory in the May general election, although its majority in parliament continued to shrink, following similar outcomes in 2009 and 2014. President Cyril Ramaphosa announced a reduced cabinet consisting of 28 ministers, down from 36, with David Mabuza as his deputy. There had been some speculation that Mabuza, who was not sworn in with the other ANC MPs and had been asked to appear before the ANC’s Integrity Commission, would be passed over in favour of a female deputy president.
South African bond yields were only marginally lower, despite sharp declines in yields elsewhere in the world. Investors remain concerned that Moody’s will downgrade South Africa’s sovereign credit rating to non-investment grade given the ongoing problems at the country’s State-Owned Enterprises like Eskom, Transnet and SAA.
South Africa’s equity market followed global markets lower, with price downside exacerbated by a MSCI rebalance of their Emerging Markets Index. MSCI’s decision to include Saudi Arabia and to increase the weight of China A shares meant South Africa’s weight in the index was reduced. It was estimated that a total of R23 billion was sold by passive funds to realign their portfolios to the new index weights on 28 May. The sharply lower oil price also impacted on the share price of Sasol, which tumbled more than 22% during the month.
South Africa’s listed property sector declined marginally in May. MSCI’s reweighting of their Emerging Markets Index negatively impacted most of South Africa’s listed property companies and the sector was down more than 4% before it rallied in the final days of the month, after President Ramaphosa announced his new cabinet.
The Bridge Equity Income Growth Fund declined by 5.0% in May. The Fund continues to allocate approximately 90% of the portfolio to high quality businesses that are expected to deliver double-digit earnings growth over the medium and long term and reward shareholders with above-average dividend yields. The Fund also allocates 10% of the portfolio to listed property companies that offer an acceptable income yield and above-average income growth prospects, while at the same time providing an adequate level of property and geographic diversification
The investment objective of the portfolio is to seek a high level of income (more in the form of dividends) and long-term growth in dividend income in excess of the rate of inflation such that the portfolio will produce a total return in excess of the average of the ASISA South African Equity General sector at lower levels of volatility. Income will be a key component of the portfolio. The risk profile of this portfolio to the investor will be above average, due to its prominent exposure to the equity risk factor. Tax free instrument by virtue of S12T of the Income Tax Act