NAV on 2020/07/31
|NAV on 2020/07/30
|52 week high on 2019/12/18
|52 week low on 2020/03/23
|Total Expense Ratio on 2020/03/31
|Total Expense Ratio (performance fee) on 2020/03/31
Old Mutual Unit Trust Managers (RF) (Pty) Ltd.
South African--Multi Asset--Flexible
Arthur joined MacroSolutions as Portfolio Manager in October 2011. Arthur is responsible for the domestic equity portfolios of the dynamic funds, including the Old Mutual Flexible Fund.Prior to joining MacroSolutions, Arthur was the Chief Investment Officer at Hermes Asset Management where he was responsible for the investment process and strategy, equity research and portfolio management. Before joining at Hermes, he served as a senior portfolio manager and an equity analyst at various prominent investment houses, including Quaystone Asset Management, Syfrets and BoE. Arthur has 27 years of investment experience.
Peter is an award-winning analyst who has extensive experience in the investment arena. He worked at a stockbroker for 10 years as an analyst and equity strategist, after which he was the Head of Research and Head of Equities for Cazenove South Africa.Peter joined Old Mutual in May 2005 and has been the Head of MacroSolutions since 2007. Peter has specific responsibility for third-party funds, including the Profile range. He also manages two unit trust funds, Old Mutual Maximum Return Fund of Funds and Old Mutual Flexible Fund. The Old Mutual Edge28 Life Fund is also part of his portfolio. Having analysed countries and companies, Peter can integrate top-down and bottomup drivers and valuations to create an optimal portfolio.
Old Mutual Flexible comment - Dec 19
The final quarter of 2019 was positive for risk assets, resulting in good returns for the full year. Despite slower economic activity globally and the increased intensity of the trade war between the US and China, global equities marched steadily higher. The US Federal Reserve stepped in to arrest the slowdown, cutting rates by 0.75%, and progress on a trade resolution towards the end of the year helped lift global equities nearly 24% in rand terms in 2019 with the US equity market leading the way. From a sector perspective, IT was the stand-out performer, while energy was the laggard.
Local equities caught the move higher in global equities in the fourth quarter, ending almost 7% higher for the calendar year. This was driven primarily by a strong performance from the platinum and gold sectors as precious metals moved higher. Despite the rand ending the year stronger, other rand hedge counters contributed positively with double-digit returns, while many SA-facing names were under pressure. In addition to weak economic conditions, instances of stockspecific issues arose in the form of excessive debt levels and ESG matters. The local property sector also suffered, returning a paltry 1.9% in 2019. Despite the weak economy, persistent Eskom problems and growing downgrade risks, local bonds returned over 10% in 2019.
The Old Mutual Flexible Fund delivered a performance in 2019 in line with its peer group average and marginally behind its performance target. As global equity ran up and local assets lagged during the year, the fund has steadily reduced exposure to global assets in favour of domestic bonds and equity. This strategy was premature and has cost the fund some relative performance, even the local government bonds delivered returns ahead of our performance target. The fund is overweight to platinum miners, which delivered a spectacular return during the year as the palladium price soared. Raubex and British American Tobacco were two other strong equity performers during the year. Naspers has been disappointing subsequent to listing Prosus, lagging the Capped All Share Index (CAPI) and its dominant investment, Tencent.
Fund returns were negatively impacted by the underperformance of some domestic equity holdings. As a group these are profitable companies that are experiencing tough operating conditions in the weak local economy, with cyclically depressed earnings and trading at multi-year low valuations with muted expectations priced in by the market. We believe that these companies make attractive investments, if one has the required patience.
The Old Mutual Flexible Fund remains cautiously positioned and has retained its underweight position in global equity and its large exposure to domestic bonds.
Looking forward, we expect good real returns from local equity and bonds due to their cheap valuations. Global equity, the other major component of the portfolio, offers lower real returns but provides valuable diversification.
The fund aims to deliver long-term equity-like returns, but at lower levels of volatility than equity. The fund will predominantly invest in shares, but the portfolio manager can invest in less risky asset classes when they offer better value. This fund is suited to investors who want high long-term capital growth, but also want some protection against short-term fluctuations of the equity market. The fund is suitable for long-term savings outside a retirement fund.