NAV on 2019/09/16
|NAV on 2019/09/13
|52 week high on 2019/04/23
|52 week low on 2019/08/27
|Total Expense Ratio on 2019/06/30
|Total Expense Ratio (performance fee) on 2019/06/30
Sanlam Collective Investments
South African--Equity--Large Cap
95% FTSE/JSE Capped SWIX 40 Index and 5% STeFI calculated over a rolling 1 year period
No email address listed.
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Deon van Zyl
Deon has 30 years investment experience. He started his financial career at Santam Insurance as an Economic Analyst. Deon then moved to Metropolitan Insurance Investment Division, where he initially focused on dealing in equities and fixed interest instruments. Thereafter, he became the Head of Treasury as well as managing the company's in-house pension fund. In 1996, he was appointed Head of Fixed Interest, responsible for fixed interest strategy and was a member of the Investment Strategy Team for Metropolitan Asset Managers. Deon started managing the Metropolitan Inflation Linked Bond Fund in 2002, together with the Metropolitan Money Market, Bond and Income funds. He has been the recipient of more than one Raging Bull Awards and Morningstar Category Awards. In early 2012, Deon van Zyl, Brandon Quinn and a group of investors founded Saffron Wealth.
Brandon has 17 years investment experience. He started his finance career at NBS Bank where he established and developed the market research and planning function. Brandon then moved to BoE Bank Treasury, where he initially focused on forex exchange trading and interest rate and currency arbitrage. Thereafter, he managed the market risk of BoE Treasury, BoE Stock Brokers and BoE Hedge Funds while completing his CFA. He was Global Treasurer of Seaboard Overseas Limited, a NYSE-listed multi-national commodity-trading company before joining Metropolitan Asset Managers. At Metropolitan, he headed up the Hybrid & Structured Investments unit which specialised in Liability Driven Investments, sovereign, corporate and inflation-linked bond structuring, interest rate and equity-derivative structuring. Brandon was the chairman of the Alternative Strategies Investment Committee and managed an enhanced income fund focusing on alternative asset application and multi-strategy fund management. In early 2012, Brandon, Deon van Zyl and a group of investors founded Saffron Wealth. Brandon is the lead manager on the Saffron Opportunity Income Fund which won the 2014 Raging Bull Award for the Best South African multi-asset income fund on a risk-adjusted basis.
Saffron SCI Large Cap Fund - Jun 19
The Saffron SCI Large Cap Fund returned 2.57%, with the benchmark (composite 95% Capped SWIX Top 40 Total Return + 5% STeFI Call Index) returning 3.41%, an underperformance of 0.84% for the period, with the fund down against benchmark by 0.7% year-to-date.
The second quarter of 2019 was led by expectations on global central bank policy decisions, outlooks for structurally lower growth and inflation expectations and US China trade wars negotiations.
Global central banks again dominated the direction of capital flows this quarter, with the perception of the beginning of more accommodative monetary policy playing a major role in asset allocation decisions - clearly seen through movements in the US 10-year (down from 2.41% to 2.01%) and the German 10 -year Bund (- 0.07% to -0.33%). The spread between these two benchmark rates continues to widen, indicating much diverging investor expectations between Europe and the United States.
The Australian central bank led the cutting cycle, reducing their policy rate by 0.25%. The Bank of Japan and the Bank of England kept rates unchanged while the latest European Central Bank meeting (and Draghi's last) indicated a willingness to loosen monetary policy further. In the US, market participants have recently begun pricing in at least two 0.25% rate cuts from the FED, likely in July and September respectively. This after the FED removed their 'patient' stance from their latest market report and indicated an unease with such low breakeven inflation expectations for the future.
Asset class returns were broadly mixed over the quarter: The MSCI World Equity Index provided a total return of 4.18% with the MSCI EM Equity Index returning only 0.69% over this period. Chinese equities gave back some previous quarter gains (Shanghai Composite Index returned -2.41%) and lost ground to the S&P 500 Index (4.30%) over the quarter.
A lack of risk appetite for emerging markets saw EM Credit unchanged with the JP Morgan EMBI Plus Sovereign Spread Index unchanged over the period at 405 points while the domestic ALBI (All Bond Total Return Index) returned a more modest 3.70% on the back of consistent R186 support. In the global credit space, the Markit iBoxx USD Liquid High Yield Index gained 1.54 % over the period. The VIX Index, which measures S&P 500 risk sentiment, traded slightly higher at the end of the quarter at 15.08 from 13.71.
Commodity returns were reversed during the second quarter. The CRB Commodities Index returned -4.3% (+4.2% in the previous quarter), with the CRB Metals Index as the biggest loser at -13.3% (up 8.0% in 1Q19). The CRB Livestock Index returned -7.6% (previously +8.9%). Brent crude oil prices traded at USD66.55 at quarter-end (down -2.7%). Oil jumped to a five-week high after Saudi and Russia signalled their support for an extension of OPEC+ output cuts and a US-China agreement to restart trade talks improved the demand outlook. The rand price per barrel traded at ZAR943.72, down -4.4% over the quarter as the rand appreciated by 2.9% against the dollar. Palladium (+11.0%) and gold (+9.07%) performed strongly, with copper (-7.8%) and platinum (-1.7%) losing.
Domestically, the Rand strengthened against the dollar by 2.86% over the quarter, with EM peers Brazil and Turkey strengthening and weakening by 1.80% and - 4.00% respectively over the same period. Internationally, the Trade Weighted Dollar Index weakened modestly by 1.19%. The Euro strengthened against the Dollar by 1.38% and the Pound weakened by 2.60%, dragging its feet due to the continued Brexit turmoil.
South African equities performed broadly in line with their global counterparts. The JSE All Share and Top40 Indices returning 3.92% and 4.61% respectively. The Capped SWIX Top40 Index to which the Saffron SCI Large Cap Fund is benchmarked, returned a slightly lower 3.22%.
Top performing bespoke Saffron relative sectors included Gold Mining (30.73%), Telecoms (14.42%) and Foreign Consumer (11.19%) with the major laggards being Energy (-16.66%), Foreign Property (-10.36%) and Domestic Consumer (-9.12%).
In a quieter end to the second quarter, the fund took profit on a number of sectors including Telecoms, Domestic Consumer and Domestic Retail which had benefitted from stronger ZAR and lower domestic interest rates. Detractors of value included the Healthcare, Paper and Pulp Industrial and Logistics sectors which continue to suffer from sector specific concerns.
The fund currently has no exposure to derivative positions.
The fund is positioned for a on-balance stronger Rand, similarly to Q1 with exposure to the Domestic Property, Domestic Consumer, Industrial and Logistics sectors.
The portfolio's investment universe consists, apart from assets in liquid form, of equity securities listed on the Johannesburg Stock Exchange. The portfolio may also invest in participatory interests and other forms of participation in portfolios of collective investment schemes, registered in South Africa. The portfolio will invest in up to 50 equity securities and such equity securities will not include companies outside of the top 60 companies by market capitalization on the FTSE/JSE Securities Exchange. The portfolio's equity exposure will always exceed 80% of the portfolio's net asset value. The portfolio may from time to time invest in financial instruments, in accordance with the provisions of the Act, and the Regulations thereto, as amended from time to time, in order to achieve the portfolio's investment objective.