NAV on 2019/07/22
|NAV on 2019/07/19
|52 week high on 2018/08/29
|52 week low on 2019/01/02
|Total Expense Ratio on 2019/03/31
|Total Expense Ratio (performance fee) on 2019/03/31
Old Mutual Unit Trust Managers (RF) (Pty) Ltd.
South African--Multi Asset--Low Equity
Standard Bank call rate for amounts of R1 million
John joined Old Mutual Investment Group South Africa (OMIGSA) in November 2004 as a portfolio manager. He is responsible for managing Capital Builder (including the life-wrapped guaranteed version, Capital Growth), certain institutional absolute return funds and the Volatility Arbitrage Hedge fund.
In 1999, John joined UBS Investment Bank in the derivative sales and structuring division. He was promoted to Director, Head of Derivatives and a member of the UBS management committee in January 2001. In 2002, John became a member of the JSE Financial Derivatives Advisory Committee.
Bivashen is a portfolio manager in the Customised Solutions boutique. Since April 2010, Bivashen has been co-managing various portfolios. He currently co-manages the derivative-based hedge funds, and has overall responsibility for hedge funds and bespoke client solutions.
Bivashen joined Old Mutual Investment Group in August 2007 as an investment structuring actuary. He was part of the portfolio management team responsible for research, operational management and client servicing; he was also co-manager of a call-overwriting fund.
Prior to joining Old Mutual Investment Group, Bivashen was at Metropolitan Employee Benefits Investment Services where he was part of the team responsible for the management of the capital guaranteed products, and also involved in product development.
Old Mutual Capital Builder comment - Sept 18
Developed market stocks advanced once again to alltime highs over the third quarter, and having recently surpassed the tenth anniversary of the global financial crisis, increased attention has been placed on the likely source of the next crisis. While US growth continues to impress on the upside, the Federal Open Market Committee (FOMC) has reiterated its guidance that the tightening cycle is far from complete, highlighting the risk associated with rising US interest rates. Rising US rates have had a knock-on effect on the global economy, with reduced liquidity fuelling the sustained emerging market sell-off.
On the trade war front, US President Donald Trump has given the go-ahead for circa US$200bn of tariffs on Chinese imports, which is expected to be met with fierce resistance from China and could spark further global market volatility in the future.
Locally, fiscal execution risk and the associated threat of a sovereign credit rating downgrade were highlighted by the recession-inducing second quarter GDP print. The stimulus plan announced by President Ramaphosa towards the end of September was received positively but the feedback from ratings agencies was that execution needs to follow in order to stave off forthcoming rating downgrades.
The third quarter of 2018 saw continued volatility in domestic equity markets, with the FTSE/JSE All Share Index shedding 2.2% over the quarter. Resources advanced 4.6% over the quarter on the back of the rand slipping 3.0% relative to the US dollar, while financials also ended the quarter up 4.2%. Industrials’ see-saw year continued, shedding a massive 8.2% over Q3. Nominal bonds (0.8%) and inflation-linked bonds (0.6%) ended the quarter in positive territory while listed properties’ horrid year continued, losing 1.0% over the quarter to take the year-to-date slide to -22.2%.
The portfolio has a moderate holding in equities, which are close to fully hedged to immunise against drawdowns. We continue to monitor real yields, which are slowly edging upwards to buying territory. The bulk of the fund is still invested in cash, money market instruments and floating rate notes. As such, the fund is well positioned to either participate in any further equity gains or to minimise drawdowns should equity markets continue to fall.
The fund aims to achieve capital protection and stable, tax-efficient growth
in excess of cash returns. The fund targets a gross annual return of 3% above
cash returns over rolling three-year periods, and aims to deliver positive returns
every quarter. Where negative quarters are experienced, the drawdowns are
likely to be relatively small.
WHO IS THIS FUND FOR?
The fund is suited to astute investors who want capital protection and stable, tax-efficient growth in excess of cash returns.
The fund invests in a broad spectrum of asset classes, including cash, fixed income, listed property and equities. Although equities generally account for between 65% and 75% of the portfolio, derivatives are used to reduce this to an effective equity exposure of 0% to 40%. The fund invests primarily in 20 to 25 large capitalisation shares. The balance of the portfolio is held in cash and money market instruments.
REGULATION 28 COMPLIANCE
The fund complies with retirement fund legislation. It is therefore suitable as a stand-alone fund in retirement products where Regulation 28 compliance is specifically required.