NAV on 2019/11/14
|NAV on 2019/11/13
|52 week high on 2019/11/13
|52 week low on 2019/01/07
|Total Expense Ratio on 2019/06/30
|Total Expense Ratio (performance fee) on 2019/06/30
Sanlam Collective Investments
10% STEFI, 10% ALBI, 25% JSE ALSI, 5% US T-Bill, 5% WGBI, 45% MSCI ACWI
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Ginsburg & Selby SCI WW Flex Fund - Jun 19
Despite a brief drop in May, risk assets continued the positive trajectory in 2019, with global equity markets increasing 3.8% during the quarter in US Dollars, taking the year-todate return to 16.6%. The major themes influencing markets continued, with the threat of a global economic slowdown being countered by the major central banks reaffirming their accommodative monetary policy.
Markets started the quarter on a positive note as investor sentiment remained optimistic, underpinned by the more accommodative stance of major central banks and the prospect of a trade resolution between China and the USA.
This optimism was however tested in May, as trade tensions between China and the USA escalated once again following the Trump administration increasing existing tariffs on $200bn of Chinese goods from 10% to 25% while threatening to impose the same tariffs on an additional $325bn of Chinese goods. Tensions between the two largest nations were escalated further when the USA blacklisted Huawei, China’s largest telephone-network equipment company, citing security concerns.
The knock-on effect from this uncertain global trade environment is now beginning to reflect in global economic data, with manufacturing surveys showing weakness around the world, notably in US business surveys. These weak data points prompted the major central banks to reaffirm their stance on supporting their economies should conditions continue to deteriorate. In June, key individuals within the Fed (including the Fed president Jerome Powell) acknowledged that rate cuts may be required before the year-end to keep the economic expansion going. This led to renewed investor optimism, with markets quickly recovering the losses experienced in May.
In South Africa, politics took centre stage with the national election taking place in May. The results were mostly in line with expectations, however, uncertainty remains regarding how much power Cyril Ramaphosa has within his own party to implement the policies required to improve the economic growth in South Africa. The urgency of these policies was evident with the Q1 GDP growth release, which showed that the economy shrunk by 3.1% on an annualised basis, the worst contraction since 2009. Despite this, the equity market still managed to outperform the Global and Emerging Market index during the quarter, increasing by 3.9% in Rand terms (6.3% in US Dollars).
The Ginsburg & Selby SCI Worldwide Flexible Fund generated a return of -1.2% in Rand terms over the quarter, underperforming the benchmark (+2.3%) and the ASISA Worldwide Multi-asset flexible peer group (+0.4%).
The underperformance during the quarter was as a result of the funds bias to offshore equities, which underperformed local equities over the period. Manager underperformance also detracted from performance, with a notable drop from the Contrarius Global Equity Fund and the Obis Global Balanced fund, which fell 13.8% and 3.5% respectively in Rand terms.
Going into Q3, we continue to expect increased volatility as markets weigh the positives from the major Central Bank’s support against the threat to global growth as a result of the prolonged trade tension. In this opaque environment and given the strong performance of global equities, we have slightly reduced the fund’s bias to global equities in favour of local fixed interest, which is currently offering attractive yields. After these changes, the fund will have approximately 71% exposure to risk assets and 58% in global assets.
The portfolio may invest in global and local securities, government, corporate and inflation linked bonds, debentures, non-equity securities, property shares, property-related securities, preference shares, money market instruments and assets in liquid form.
The portfolio may also invest in participatory interests and other forms of participation in portfolios of collective investment schemes or other similar schemes operated in territories with a regulatory environment which is to the satisfaction of the manager and trustee of a sufficient standard to provide investor protection at least equivalent to that in South Africa and which is consistent with the portfolio's primary objective.
The manager 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. 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.
The manager may vary the ratios of securities or assets in liquid form in changing economic environments or market conditions, or to meet the requirements in terms of legislation. The manager may retain cash or place cash in on deposit in terms of the deed and supplemental deed. The manager will be permitted to invest on behalf of the portfolio I offshore investments as legislation permits.