NAV on 2019/07/22
|NAV on 2019/07/19
|52 week high on 2019/05/02
|52 week low on 2019/01/04
|Total Expense Ratio on 2019/03/31
|Total Expense Ratio (performance fee) on 2019/03/31
Sanlam Collective Investments
South African--Multi Asset--Low Equity
ASISA Category Average: South African - Multi Asset - Low Equity
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Ginsburg & Selby SCI Stable FoF - Mar 19
The market's appetite for risk assets returned in the first quarter of 2019 as both a dovish Fed and optimism for a truce on trade between the US and China provided support for risk assets.
Global Equities (MSCI AC World Index) had the best quarterly performance since Q3 2010, increasing by 12.3% in US Dollars and recovering most of the losses suffered in Q4 2018. This performance was mostly driven by the heavily-weighted US equity market, which increased by 13.7% in USD, the highest quarterly return since Q3 2009.
During the quarter the US Federal Reserve changed their stance on their normalization path by keeping the federal funds rate unchanged, while slowing down the rate at which they reduce their balance sheet. This more patient approach was a response to concerns relating to prevailing global economic and financial developments, as well as muted inflationary pressures. The Committee no longer expects further rate increases in 2019 and could potentially discontinue the balance sheet reduction program in October, but cautioned that future adjustments still remain data dependent. This more dovish tone provided support for risk assets as it eased some of the market's concerns that future rate hikes may put further pressure on an already fragile global economy.
The trade talks between the USA and China continued to show signs of progress with delegates from both countries remaining optimistic. The friction between the two countries has been a major headwind for global trade and therefore any positive news remains supportive for risk assets. Despite this progress, there is still a lot of uncertainty surrounding certain critical industries, such as technology. The positive sentiment towards risk assets also supported Emerging Markets, with the index increasing by 10% in US Dollars. This optimism on trade combined with continuing government support for the domestic economy supported the Chinese equity market, with the MSCI China index increasing by 17.85% in US Dollars.
In line with Emerging Markets, the JSE All-Share index also had a strong quarter, increasing by 8.0% in Rand terms. This positive return was however largely attributed to the strong performance of the larger rand hedge shares, as almost half of the companies listed on the JSE All-Share Index produced a negative return over the quarter.
Having initially appreciated against the major currencies at the start of the quarter, the Rand gave back all its gains following the Budget speech in February which once again highlighted the extent of the country’s fiscal problems. This dire fiscal position, combined with the anticipated impact of Eskom’s rolling blackouts, dimmed sentiment towards the country. The Rand ended the quarter at R14.42 to the USD and R18.79 to the GBP, reflecting a depreciation of 0.25% and 2.6% respectively.
The Ginsburg & Selby SCI Stable Fund generated a return of 3.9% in Rands over the quarter, slightly underperforming the ASISA SA Multi-Asset Low Equity peer group (4.0%).
The Fund’s slightly more conservative positioning and lower offshore exposure detracted from performance relative to our peers. A notable strong performer during the quarter was the Nedgroup Global Equity Fund, which returned 12.8% in Rands over the quarter.
Going into Q2, we continue to expect increased volatility as most of the concerns which led to the market fall in Q4 remain unresolved. While increased volatility can be painful over the short term, it creates opportunities which our skilled active managers are able to exploit. We are however still cognizant of the risks and therefore maintain the funds conservative positioning with 34% invested in risk assets and 23% in offshore assets.
The portfolio aims to provide investors with a return of 3% above the South African Inflation (CPI) after all costs, measured over five –year rolling periods. The portfolio aims to deliver a stable return while providing a high degree of capital certainty over any 24-month period. The portfolio is suitable for investors with a medium term investment horizon.Investments to be included in the portfolio will, apart from assets in liquid form, consist solely of participatory interests in portfolios of collective investment schemes registered in the Republic of South Africa or of participatory interests in collective investment schemes or other similar schemes operated in territories with a regulatory environment which is to the satisfaction of the manager and the trustee of a sufficient standard to provide investor protection which is at least equivalent to that in South Africa.
The portfolio will be managed in accordance with regulations governing pension funds.
The portfolio may invest in listed and unlisted instruments (derivatives) as defined by the Act from time to time. The portfolio may invest in collective investment scheme portfolios investing in the equity, bond, money, or property markets. The underlying managers may make active use of listed and unlisted financial instruments to reduce the risk that a general decline in the value of equity, property and bond markets may have on the value of the portfolio. Within regulatory constraints, the manager shall have the maximum flexibility to vary assets between the various markets, asset classes and countries to reflect the changing economic and market conditions.
For the purpose of this portfolio, the Manager shall reserve the right to close the portfolio to new investors on a date determined by the Manager. This will be done in order to be able to manage the portfolio in accordance with its mandate. The Manager may, once a portfolio has been closed, open that portfolio again to new investors on a date determined by the Manager. The Trustee shall ensure that the investment policy set out in the preceding clauses are adhered to; provided that nothing contained in this clause shall preclude the manager from varying the proportions of securities in terms of changing economic factors or market conditions or from retaining cash in the portfolio and/or placing cash on deposit.
Nothing in this supplemental deed shall preclude the manager from varying the ratios of securities or assets in liquid form in changing economic environment or market conditions, or to meet the requirements in terms of legislation and from retaining cash or placing cash on deposit in terms of the deed and this supplemental deed.