NAV on 2020/07/31
|NAV on 2020/07/30
|52 week high on 2020/07/31
|52 week low on 2020/03/24
|Total Expense Ratio on 2020/03/31
|Total Expense Ratio (performance fee) on 2020/03/31
Sanlam Collective Investments
Average SA MA Low Equity
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Megafin (Pty) Ltd
Megafin Growth FoF comment - Jun 19
Megafin SCI Growth Fund of Funds Portfolio Update
After a very strong start to the year, aggressive investors had mixed fortunes during the second quarter of 2019, largely due to rand strength against developed market currencies which detracted from the Portfolio performance.
The Megafin SCI Growth FoF’s returned 0.7% for the quarter and has generated a return of 3.8% over the past year.
After disappointing performance in May, global equity markets finished the quarter strongly, largely on the back of comments from the major central banks that they would be willing to provide support in the form of lower interest rates and easing trade tensions between the U.S. and China.
The Portfolio’s significant allocation to global equities delivered decent hard currency returns during the quarter, however, rand strength detracted meaningfully from the performance of these allocations. Within global equities, developed market equities outperformed emerging market equities, driven higher by U.S. equity markets which make up a significant portion of global equity indices. The other material allocation within the Portfolio, local equities, contributed meaningfully to performance in line with the supportive global environment. Within local equities, Financials contributed the most to performance, while Industrials and Resources also generated positive performance over the quarter. A small allocation to local listed property contributed positively to portfolio performance, despite the asset class facing headwinds in the South African environment.
The contribution from fund selection was mixed over the quarter. Nedgroup Core Bond delivered strong performance in the second quarter of 2019. The fund's significant allocation to South African government bonds drove performance as bond yields fell across the globe in expectation of lower future interest rates.
CoreShares S&P SA Top 50 was one of the best performing funds over the quarter. This is a passive fund that invests in the largest 50 companies on the JSE, however, they cap their weight to one share to 10% of the fund. The fund’s exposure to resources, especially the gold miners, was a solid contributor to performance over the quarter.
PSG Equity underperformed the market and its peers over the second quarter of 2019. The fund had a few stock specific detractors: Glencore (-16%), Imperial (-14%) and Japan Post Insurance (-16%). Large-cap shares continued to outperform the small and mid-cap shares over the quarter.
No changes were made to the portfolio composition during the quarter.
While equity allocations can be volatile over short time periods, they are necessary in order to generate significant inflation-beating returns over the long term. With strong performance in the first quarter of 2019, the Portfolio has delivered decent rand returns year-to-date, which is encouraging.
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 consist of a mix of collective investment scheme portfolios investing in equity, bond and property markets and money market instruments. The asset allocation will be actively managed by the investment manager to reflect changing economic and market conditions. The portfolio will be managed by Megafin CC. This portfolio will, at no time, duplicate any Sanlam multi asset portfolio. The portfolio will also be allowed to invest in listed and unlisted financial instruments (derivatives) as allowed by the Act from time to time. 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 Manager shall be permitted to invest on behalf of the portfolio in offshore investments as legislation permits. 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.