NAV on 2020/02/25
|NAV on 2020/02/24
|52 week high on 2020/02/20
|52 week low on 2019/08/16
|Total Expense Ratio on 2019/09/30
|Total Expense Ratio (performance fee) on 2019/09/30
Sanlam Collective Investments
South African--Multi Asset--Low Equity
Average SA MA Low Equity
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Megafin (Pty) Ltd
Megafin Stable FoF comment - Jun 19
Megafin SCI Stable Fund of Funds Portfolio Update Conservative investors generated decent returns during the second quarter of 2019. Income generating assets such as cash and bonds delivered decent outcomes during the quarter. Local equities contributed positively to portfolio performance, while global equity allocations faced a headwind from a stronger rand over the quarter.
The Megafin SCI Stable FoF’s returned 1.1% for the quarter and has generated a return of 4.8% 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.
Local bonds, which make up the bulk of the Portfolio, drove performance over the quarter as yields moved lower across the globe in response to lower future expected interest rates. Local cash also contributed to the stable performance profile of the Portfolio, generating a positive return for end investors from this portion of the Portfolio. Local equity allocations generated decent returns for investors in line with the supportive global environment. A small allocation to global equities generated a decent return for investors in hard currencies, however, due to rand strength over the quarter these allocations did not contribute meaningfully to portfolio performance. Although it is not a significant allocation within the Portfolio, local listed property contributed positively to portfolio performance, this was achieved despite the asset class facing headwinds in the South African environment.
The contribution from fund selection was mixed over the quarter.
Coronation Strategic Income delivered decent performance in the second quarter of the year. Significant allocations to local corporate bonds drove returns over the quarter, in line with strong performance from global bond markets, as yields lowered in response to lower future expected interest rates.
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.
We are pleased that investors received a positive return from their portfolio during the second quarter of 2019. The diversified structure of the Portfolio contributed positively to outcomes, as all local asset classes generated decent returns. We will continue to follow a valuation-driven approach when allocating to different asset classes. This will allow the Portfolio to generate inflation-beating returns in a variety of market environments.
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 effective exposure to equities will not exceed 40% of the portfolio. The portfolio will be managed in accordance with regulations governing pension funds. 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. The Manager shall be permitted to invest on behalf of the portfolio in offshore investments as legislation permits. 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.