NAV on 2019/01/15
|NAV on 2019/01/14
|52 week high on 2019/01/03
|52 week low on 2018/08/17
|Total Expense Ratio on 2018/09/30
|Total Expense Ratio (performance fee) on 2018/09/30
Old Mutual Unit Trust Managers (RF) (Pty) Ltd.
70% FTSE/JSE Gold Mining Index and 30% FTSE Gold Mines Index Series
Meryl joined Old Mutual Equities in 2012. She is responsible for analysing gold miners, the retail sector and various industrial shares. Her background enables her to look at companies with an insider’s perspective while
bringing her analytical skills to the fore. Having graduated as a chemical engineer, Meryl initially joined Unilever where she worked for five years. Thereafter, she joined ABSA where she spent two years before joining Old Mutual Equities. Meryl has three years of work experience in the asset management industry.
Old Mutual Gold comment - Sept 18
The gold price closed the quarter at US$1 187 per ounce, having fallen 5% over the third quarter. The gold price faced headwinds from a strengthening US dollar, which has been firming over the quarter as the US economy continues to strengthen relative to other developed markets. Gold may find sporadic support in response to intensifying trade war news flow, but this will be countered by market anticipation of further rate hikes by the US Federal Open Market Committee (FOMC). Physical demand for jewellery, coins and bars will provide a price floor at lower prices. The COMEX market for gold futures contracts is in a net short position for the first time in years, reflecting weak investment demand. Longer term, this should prove to be a bullish signal for the gold price.
The Old Mutual Gold Fund has a composite benchmark weighted 70% to the FTSE/JSE Gold Mining Index and 30% to the FTSE Gold Mines Index, which is comprised of global gold stocks. The FTSE/JSE Gold Mining Index fell 6% over the quarter, while the FTSE Gold Mines Index fell 15% in rand terms.
Harmony Gold and AngloGold Ashanti were the strongest performers on the local front this quarter, rising 10% and 9%, respectively. The fund holds a stake in both these counters. On the international front, the relative outperformer was Australian producer Northern Star Resources.
Sibanye-Stillwater entered into a US$500 streaming deal with Wheaton Precious Metals, agreeing to sell a portion of their production from their Stillwater asset at a discounted price over the life of the mine in exchange for an upfront cash injection. This has relieved pressure on the Sibanye-Stillwater balance sheet, but it remains at uncomfortably high gearing levels for a miner. The exposure in the fund remains low. AngloGold Ashanti remains the fund’s largest holding, followed by Gold Fields.
AngloGold Ashanti has a globally diverse portfolio of assets with brownfields and greenfields expansion opportunities. A new CEO has joined the group, having left Barrick Gold. His fresh perspective could enhance the group’s ability to further optimise its portfolio and operating costs. The international background of the new CEO highlights that AngloGold’s future focus is on its ex-South Africa assets. It is probable that further value can be unlocked by selling the remaining South African assets.
The fund aims to offer the investor superior returns over the medium to longer term. It invests in gold and gold-related shares showing above average prospects for growth. Up to 20% of the portfolio may be invested offshore. The fund aims to achieve its performance objectives through well-researched and superior share selection.
The fund is for investors who are bullish on gold, and who are wishing to invest a portion of their total portfolio in this higher risk sector of the market.
This is an aggressive risk fund (risk rating 5). With its exclusive exposure to the gold sector, it may be more volatile than a fully diversified general equity fund. Adding to the fund's higher risk profile are the different limits that apply to the portfolio composition, and exposure to a single security may be higher. The fund is exposed to share price movements, which are affected by the performance of individual companies, general market conditions as well as political and economic changes. Risk is minimised through a diversified portfolio of shares. Poor performance of one share may be offset by stronger performance of other shares.