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
Sanlam Collective Investments
FTSE/JSE Shareholder Weighted Index (SWIX) (J403T)
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First Avenue SCI Focused Qual Equity Fund - Sep 18
The volatility within key economic variables continued into the third quarter due to South Africa entering into a technical recession, collapse of the Turkish lira and an amplification of the trade war between the US and China. For example, the Rand-Dollar exchange rate fluctuated from R13.72 to a peak of R15.42 and reverted back to R14.14. The result was a significant increase in market volatility and nervousness amongst local and foreign investors. Amidst such an environment, we observe initial signs of the market reverting back to the certainty offered by quality companies – specifically, in cases where strong results were reported. Examples include Discovery, FirstRand and BidCorp. However, these positive contributions (relative to benchmark) were eroded by the Basic Materials sector which continues to rally on the back of restructuring, currency movements and commodity prices. We maintain a structural underweight position to the sector based on our belief that it is not able create shareholder value consistently over long periods. Even though the sector can rise substantially in the short term, forecasting the factors that drive these movements is essentially a “mug’s game” that is hard to repeat consistently. We continue to maintain our discipline of investing only in companies that offer the best potential for long term wealth creation despite the environment disproportionately favouring such cyclical sectors. Our focus remains on protecting our client’s wealth (instead of reaching for risk) during periods of heightened volatility. As an example, we exited from our holding in MTN post an escalation in regulatory risk in Nigeria with the Central Bank accusing MTN of illegally repatriating USD 8.1b in historical dividends.
The objective of this portfolio is to provide investors with steady compounding of capital overtime through a concentration of holdings in companies of the highest quality. Growth of income is more important than level of income.
The portfolio will invest in assets in liquid form and in shares across all economic groups and industry sectors of the JSE Securities Exchange South Africa as well as across the range of large, mid and smaller cap shares and such other financial instruments as may be permitted by the prevailing regulations. This will be a highly focused quality equity portfolio concentrating on a maximum of 20 securities of the highest quality. The portfolio may also invest in collective investment schemes in property as well as any other securities that the Act may allow from time to time. When investing in derivatives, the manager will adhere to the prevailing regulations.