NAV on 2019/01/16
|NAV on 2019/01/15
|52 week high on 2018/09/04
|52 week low on 2019/01/07
|Total Expense Ratio on 2018/09/30
|Total Expense Ratio (performance fee) on 2018/09/30
Sanlam Collective Investments
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Sam has been appointed head of the Unconstrained Strategies team at Momentum Asset Management and brings 16 years' of domestic and global investment experience to the firm. Sam was at Investec Asset Management until September 2011, where he held the positions of director, head of South African equities and portfolio manager in the Global Contrarian team. He started his career in the investment management industry at Allan Gray and moved to Abvest (now ABSA Asset Management), where he fulfilled the roles of portfolio manager, chief investment officer and, ultimately, chief executive officer, before leaving to join Investec Asset Management in early 2006. He headed a team of investment professionals responsible for well over R100 billion in equities across the full spectrum of portfolios, from pure equity to multiasset mandates. He was the lead portfolio manager and key decision maker for close on R40 billion in client assets, including the Investec Global Franchise Fund and Investec Cautious Managed Fund. He also managed the Discovery Equity Fund from its inception in November 2007.
Counterpoint SCI Value Fund - Sep 18
SA equities experienced a volatile third quarter on the back of increased currency volatility, rampant US equity markets and widening disparity across global markets.
In the third quarter, the primary driver of returns was the weakness of the rand, as a consequence of sustained US dollar strength and EM contagion.
Market leadership was narrow, led by Resources stocks and selected sectors with the Financial & Industrial complex.
The All Share Index declined by 2.2% to reverse much of the previous quarter's gains. SA Resources led the way, with a 5.2% return, followed by Financials with 2.8%. SA Industrials were the hardest hit and caused a drag on the entire index, with a decline of 7.8%. Mid-Caps and Small-Caps fell by 1.7% and 2.2% respectively.
In terms of Equity sectors, the top performers were Platinum +25.5%, Non-life Insurance +16.6% and Life Insurance +12.4%. The worst performers were Pharmaceuticals -31.8%, Mobile Telecoms -12.8%, and Media -12.3%.
The quarter was dominated by a reversal in sentiment towards domestically oriented equities. Valuations have reverted to more reasonable levels.
Domestic Policymakers and leadership have demonstrated a resolve and ability to address the structural impediments in the fiscus and critical institutions. The process is underway and will take time. The decline in domestic assets has led to less euphoric valuations and represents an opportunity for investors to participate in the recovery on a more rational basis.
Global Equity contagion remains a relevant risk. The CBOE Volatility Index (VIX) has been relatively stable after the spike in February. There are renewed signs of complacency, which does not augur well for the future. In addition, the trend in EM equities is negative. China (Shanghai) remains firmly in a bear trend and equity markets across the EM spectrum are showing signs of fatigue.
In contrast, the US Equity market continued to power ahead, led by Information Technology. Technology stocks have been the undisputed leader of the cyclical bull market since 2009 and there are no signs that the trend is reversing.
Domestic Equity valuations remain attractive relative to long term growth prospects. The Rand is likely to remain range bound and could strengthen steadily. SA Inc equities are once again offering pockets of value. We continue to believe that we are entering a prolonged period that will suit stock-pickers and active managers.
The probability is high that domestic equities, as an asset class, will muddle through provided that the risk of global contagion remains benign. For that reason, we remain cautiously optimistic and confident in our stock selection approach and ability.
The Fund declined by 0.53% in the third quarter. Performance remained well ahead of both the All Share Index and the average fund. Fund performance has experienced a positive turnaround in the last 16 months, as a change in market leadership has benefited our active, value conscious approach.
The Fund was able to navigate the third quarter very well, while attempting to take advantage of the heightened volatility. Market leadership was narrow and the Index return was heavily influenced by Resources (excluding Gold), selected financials and Rand weakness.
Contributors include the Fund's low weighting in listed property, domestic consumer and industrial stocks dogged by controversy or declining earnings. Avoiding calamity has enabled the fund to add significantly value in recent months. The Fund's high exposure to Global Equities (via the Counterpoint suite of Global Funds) was a solid contributor to returns.
The fund's continued lower weighting in domestically oriented stocks added significant value as retailers and mid-cap stocks struggled. The very low exposure to Naspers was a big contributor to relative returns.
Detractors included positions in Tobacco, Mobile Telecoms, Healthcare and Gold.
The fund positioning and strategy remains virtually unchanged. We remain relatively concentrated and meaningfully different to both the index and the average fund.
The direct and indirect off-shore exposure remains high. Rand weakness has been a huge benefit.
Narrow market leadership and increased disparity in the prices of the underlying stocks, has presented an opportunity for changes in our positioning.
The most significant changes include an increase in Tobacco and domestically oriented holding companies. We are steadily increasing our allocation to domestic consumer and precious metals.
Our recent changes represent exceptional value and are contrarian in nature because the stocks are currently out of favour.
Cash weighting remains above average. As always, we remain vigilant and ready to deploy cash as opportunities unfold.
The portfolio will be a specialist equity portfolio with a 'value' bias and will consist of financially sound equity securities listed on exchanges and assets in liquid form. The portfolio may invest in listed and unlisted financial instruments that will only be limited by the statutory limitations placed on the inclusion of financial instruments in portfolios. At all times at least 80% of the portfolio's investments will be in listed equity securities. The manager may from time to time invest in participatory interests in portfolios of collective investment schemes registered in the Republic of South Africa and which are consistent with the portfolio's primary objective.