NAV on 2019/01/18
|NAV on 2019/01/17
|52 week high on 2018/01/25
|52 week low on 2018/12/10
|Total Expense Ratio on 2018/09/30
|Total Expense Ratio (performance fee) on 2018/09/30
STANLIB Collective Investments (RF) Limited
FTSE/JSE All Share index
From 1989 to December 1998, Theo worked for UAL/NIB Asset Management and then joined Liberty Asset Management in January 1999 as a research sector head. His expertise covers the luxury goods, beverages, tobacco, food retail and food manufacturing subsectors.
Herman van Velze
With a mining engineering background, Herman started his asset management career in 1993 as a mining analyst. Winner of several awards in 2007, he has successfully managed the STANLIB Balanced Fund since 2005 and is currently Head of Balanced Funds.
Robin started his investment career in 1998 working in corporate finance & private equity. At STANLIB he began as an Industrial Analyst, transfering in 2006 to managing general equity funds. Robin has successfully managed Balanced Funds since 2007 and is currently Head of Balanced Funds.
Following 5 years in corporate finance at Standard Bank, Warren joined STANLIB in 2005 where he initially specialised in resources analysis and portfolio management. He has been a portfolio manager in the Multi-Asset Franchise since 2009.
STANLIB SA Equity comment - Sep 18
The STANLIB SA Equity fund returned -1.7% during the quarter ended September 2018. The benchmark (JSE SWIX) returned a negative 3.3% over the period. The one year return for the fund is 0.5% compared to the benchmark that returned 0.9%.
In the quarter our overweight exposures to Sanlam, African Rainbow Minerals and Sasol contributed to performance, whilst the main detractors were Pepkor, ABInbev and Shoprite. Our underweight positions in Naspers and Aspen relative to the benchmark added to relative performance whilst our underweight position in Anglo American detracted from performance.
We did the following noteworthy trades during the quarter. We added Discovery to the fund. We like the long term growth story built upon the health insurance business and the leverage opportunity into other financial services. We sold out of Coronation due to our concerns around their ability to show superior earnings growth as their funds underperform peers. For some time we have been overweight resources and this remains the position although we sold out of our Anglo American shares in the quarter. The position in Vodacom was sold during the quarter as the growth and dividend forecasts are reducing due to competitive environment and share issuances.
The JSE All Share Swix index total return for Q3 2018 was -3.3%. SA Resources topped the performance tables with a 5.2% return. Industrials and Financials delivered -8% and 3% respectively. The one year return for the SA market is 3%. Resources did the heavy lifting delivering a 27% return over the period.
The JSE All Share PE (price earnings ratio) is currently 19x and 13x on a forward basis. The dividend yield is 3.2% historic and 3.8% forward. Consensus earnings growth is forecast to be 20% and 15% for 2018 and 2019. Resources will continue to deliver good earnings growth this year and industrial (Telecommunications and media) companies will carry the flag in 2019.
The STANLIB SA Equity fund’s rand hedge exposure is in line with its benchmark, with a tilt towards the resources sector. We expect consumer confidence in South Africa to improve in the medium term, which motivates our 5% active position towards this segment, we are overweight banks, insurance and retail shares. The Property sector outlook has deteriorated as the economic uncertainty and vacancies remain a concern, the fund has no exposure to property shares.
The clear policy enactments by the Chinese government to focus on environmental improving policies have created an opportunity for paper and pulp companies as the demand for high quality commodities across the board has led to improving prices. The fund has built up a meaningful overweight in Sappi and Mondi. Our exposure to Sasol has been vindicated as oil prices continued to increase to current levels of circa 75$/barrel and we retain this overweight.
Naspers' leading position in multiple emerging markets should enable the group to benefit as increased internet penetration continues across its operating regions, creating additional markets and driving the next leg of revenue growth. Management sees profitability in e-Commerce as key to closing the holding company discount. This should benefit our largest holding in the fund.
Emerging Markets remain volatile as the trade wars and Chinese response continue to suppress confidence in Emerging Markets and this impacts SA to some degree. The next few months will provide further clarity on these matters.
The commentary gives the views of the portfolio manager at the time of writing. Any forecasts or commentary included in this document are not guaranteed to occur.
The STANLIB SA Equity Fund's objective is the steady growth of income and capital in the longer term. Investments will consist of ordinary shares from a broad spectrum of the sectors of the JSE and when appropriate, other securities, including non-equity securities and preference shares. The trustees shall ensure that the composition of the assets and their respective proportions in this portfolio will not be identical to the STANLIB Wealthbuilder Fund at all times. This portfolio may not have any direct and/or indirect foreign exposure.