NAV on 2019/11/14
|NAV on 2019/11/13
|52 week high on 2019/04/23
|52 week low on 2019/08/15
|Total Expense Ratio on 2019/06/30
|Total Expense Ratio (performance fee) on 2019/06/30
Old Mutual Unit Trust Managers (RF) (Pty) Ltd.
Hanno is currently part of the portfolio management team responsible for managing retail and institutional assets. His responsibilities include managing multi-asset class funds, as well as local and international equity portfolios.
Before joining Old Mutual Investment Group, Hanno worked in the UK for two years.
Since joining Old Mutual in 1998, Hanno has been involved in the management of
derivative, multi-asset class funds, equity portfolios and hedge funds.
Old Mutual Namibia Dynamic Floor comment - Sep 19
The third quarter of 2019 saw continued concerns mounting around the trajectory of global growth. This pressure was somewhat alleviated by central banks adopting supportive policy easing, most notably in the form of rate cuts and liquidity injections. Both the Federal Reserve (the Fed) and the European Central Bank (ECB) cut rates during the quarter. A sharp spike in oil prices occurred in September after an attack on two major oil facilities in Saudi Arabia, adding to the already heightened volatility and market uncertainty.US-China trade tensions continue to linger with no imminent resolution in sight, despite top trade negotiators from both countries agreeing to meet in Washington during the course of October. Attention will then turn to Britain’s Prime Minister, Boris Johnson, and whether he can follow through and deliver Brexit on the 31 October deadline.
Despite these headwinds, the MSCI World Index (developed market proxy) returned 0.5% over the quarter in USD terms, with the S&P 500 Index up 1.7% despite concerns about elevated stock valuations.
Locally, the South African Reserve Bank (SARB) cut rates by 0.25% in July but opted to keep rates unchanged in September, leaving room for further rate cuts this year due to subdued economic growth and a stable inflation outlook. Fitch Ratings cut South Africa’s outlook to negative during the quarter, after Moody’s implied that a downgrade to junk may be on the cards. Eskom remains the biggest threat to the fiscus, with the entity’s debt hovering around 9% of total GDP, and a workable plan around reducing the burden on the economy key to getting the economy back on track.
The FTSE/JSE All Share Index dropped by 4.6% in Q3, with the MSCI Emerging Markets Index shedding 4.2% in USD terms, capping a dismal quarter for emerging market equities. Despite South African equity markets taking a beating over the quarter, we have utilised some of our available risk budget to increase effective equity exposure, from around 34.3% at the start of the quarter to around 36.9% at quarter-end.
Given the well-diversified nature of the Old Mutual Namibian Dynamic Floor Fund and its moderate exposure to growth assets, the fund will continue to deliver returns in a risk-controlled framework with reduced volatility. The portfolio is still well positioned to meaningfully participate in any further equity market rallies. We do, however, remain cautious and are well placed to protect capital should markets retrace. This approach has served the portfolio well as it continues to provide the optimal blend of exposure to growth assets and capital protection.
The fund strives for long term capital growth as well as some level of capital protection, aiming to protect at least 90% of the net investment over a 12-month period. Through the use of a quantitative risk model, the fund aims to profit from a rising share market and protect against capital losses in a weak market. The fund invests across Namibian and South African shares, bonds and cash - moving from shares into fixed interest investments when the fund's value drops below a predetermined 'floor'. When markets start to move up, the fund increases its holdings in shares, tapping into these growth opportunities. The fund conforms to legislation governing retirement funds.
The fund is ideally suited to the more risk-averse investor whose priority is capital preservation but who still wants to participate in upside market growth. It suits investors who want:
* Protection of invested capital
* The level of capital protection to follow markets upwards
* Active equity management
The fund is also ideal for investors nearing or in retirement who want to protect their capital base, but still want access to some level of growth.
This is a moderate risk fund (risk rating 3). The risk management model aims to protect the portfolio value at a forward 'floor' level. The model will adjust the portfolio's asset allocation dynamically to protect capital. This form of portfolio protection is not a guarantee, but clearly a protective strategy only. The protective strategy is effective over typical 12-month rolling periods. Short term fund value fluctuations can occur. Alternative investment instruments will be used tactically to manage and limit downside risk, and to capture or lock in gains as and when they occur.