NAV on 2021/09/17
|NAV on 2021/09/16
|52 week high on 2021/06/02
|52 week low on 2021/02/26
|Total Expense Ratio on 2021/06/30
|Total Expense Ratio (performance fee) on 2021/06/30
Boutique Collective Investments (RF) (Pty) Ltd.
S&P South Africa Domestic Shareholder Weighted (DSW) Capped ESG Index (SPSAECZT)
Efficient Equity comment - Dec 13
It was another positive monthly return for equity investors as the local market earned 2.98% for December, taking the All Share Index annual return to an impressive 21.43%. The Efficient Equity Fund met its objective by outperforming the local market over the year, returning 24.88%. This strong year improves the fund's already impressive track record, which has seen it outperform the local market for the last four consecutive years.
On the macro front, the US Federal Reserve (Fed) announced (against the market's expectation) a $10 billion reduction in its monthly bond buying program. The decision was anchored on the Fed's view that the US economic recovery is on a sustainable path and therefore the need for additional monetary support is reducing. This 'perceived' strength in the US triggered a reversal of capital flows out of emerging markets and into improving developed markets. The outcome of this reversal is weakness in emerging market currencies. This unintended consequence of tapering was the reason behind the rand depreciating to the lowest level experienced in over four years.
As mentioned above, the local market reacted positively as the larger constituents of the index benefitted from a weaker rand - given that the majority of their sales are derived outside of South Africa. MTN, British American Tabacco and SABMiller were the standout beneficiaries of the currency weakness in the fund. Life Healthcare also performed well for the fund, returning 3.67% for the month. We have built a sizeable position in the company as we value its high quality characteristics of strong management, excellent margins and consistent cash flow generation. The healthcare provider's low cost business model makes its expansion strategy across the country's less developed regions more appealing as it attempts to meet the demand of the lower LSM healthcare consumer.
The Efficient Equity Fund is attracted to high quality businesses because their operations are largely unaffected by the wave of macroeconomic drivers. Holding these types of companies across our fund gives us exposure to our preferred asset class, equity, in addition to reducing the risks of unfavourable macroeconomic events in the short term.
The Select BCI ESG Equity Fund is an equity portfolio that seeks to sustain high long-term capital growth by investing in socially responsible securities. The portfolio‘s equity exposure will always exceed 80% of the portfolio's net asset value. The manager will take into consideration the three central pillars of socially responsible investing, being Environmental, Social and Corporate governance (ESG) criteria when making investment decisions. ESG is a set of standards for a company's operations that socially conscious investors use to screen potential investments.
Environmental criteria look at how a company performs as a steward of the natural environment. Social criteria examine how a company manages relationships with its employees, suppliers, customers and the communities where it operates. Governance deals with a company's leadership, executive pay, audits, internal controls and shareholder rights. The portfolio's investment universe consists of equity securities, preference shares, property shares and property related securities listed on exchanges, money market and other interest bearing instruments and assets in liquid form.
The portfolio may also invest in participatory interests and other forms of participation in portfolios of collective investment schemes or other similar schemes operated in territories with a regulatory environment which is to the satisfaction of the manager and trustee of a sufficient standard to provide investor protection at least equivalent to that in South Africa and which is consistent with the portfolio's primary objective. The portfolio may from time to time invest in listed and unlisted financial instruments for efficient portfolio management purposes, in accordance with the provisions of the Act, and the Regulations thereto, as amended from time to time, in order to achieve the portfolio's investment objective. The Trustee shall ensure that the investment policy set out in this Supplemental Deed is carried out.
For the purpose of this portfolio, the manager shall reserve the right to close the portfolio to new investors on a date determined by the manager. This will be done in order to be able to manage the portfolio in accordance with its mandate. The manager may, once a portfolio has been closed, open that portfolio again to new investors on a date determined by the manager.