NAV on 2020/10/29
|NAV on 2020/10/28
|52 week high on 2020/02/18
|52 week low on 2020/03/25
|Total Expense Ratio on 2020/06/30
|Total Expense Ratio (performance fee) on 2020/06/30
Sanlam Collective Investments
MSCI World High Dividend Yield NR USD Index (M1WDHDVD Index)
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Douw joined Old Mutual Investments in 1991 as an equity analyst, where he spent the next fifteen years. During this time his responsibilities included that of head of industrial sector research and the management of a variety of equity portfolios. During his last five years with Old Mutual, Douw was responsible for the management of all of its value style mandates, including the Old Mutual Value Fund and the Old Mutual High Yield Opportunity Fund. Douw joined Orthogonal Investments as one of its founding shareholders upon its inception in 2007.
Denker SCI Global Dividend Feeder Fund - Dec 19
Global equity markets performed well over the quarter. On a total US dollar return basis - the S&P 500 Index gained 9.0%, the MSCI World Index 8.6% and the MSCI Emerging Markets Index 11.8%. The surprising decline in long dated developed market bond yields that started in Q1 reversed in the final quarter of the year. Yield on US 10 year maturity government bonds increased from 1.7% at the end of Q3 to 1.9% at the end of Q4. The yield on 10 year German bonds, which had fallen to -0.6% at the end of Q3, closed the year at -0.2%. In December President Trump became the third president since America’s founding to be impeached. Nearly all Democrats voted in support of the two articles of impeachment - abuse of power and obstruction of Congress – but they failed to attract Republican support. As Republicans control the Senate and a two-thirds majority would be required to remove Trump from office, a conviction seems unlikely. In the UK election in December, the Conservative Party secured the biggest majority since 1987 - an unexpected landslide after relentless campaigning on the promise to “Get Brexit Done”. The majority will give Prime Minister Boris Johnson greater leeway to steer future trade talks.
The dividend focused approach of the fund lagged the overall market during the period, as illustrated by the fact that the MSCI World High Dividend Yield Index trailed the MSCI World Index by 1.5%. Virtually all of this difference in performance is explained by the much lower exposure to the US technology sector, due to the dearth of dividend paying companies therein. Consistent with this trend, the fund’s return for the period was similar to that of the MSCI World High Dividend Yield Index. Positive contributions to the fund’s performance came from its holdings in the financial sector, where Legal & General Group (+31%), IG Group Holdings (+24%) and JP Morgan Chase (+19%) posted good gains, and the consumer discretionary sector, where UK homebuilder Taylor Wimpey (+32%) and global leisure companies Carnival Cruise Lines (+18%) and TUI (+8%) boosted performance. The ostensible resolution of the Brexit impasse by the Conservative Party’s winning of a clear majority in the general election held in December provided the catalyst for a welcome bounce in the prices of most of the fund’s UK domiciled shares. The fund’s relative underexposure to the highly rated technology sector handicapped its performance, while its holdings in Boeing Company (-14%), American International Group (-7%) and Unilever (-4%) detracted notably. The single largest detractor from the fund’s performance and the company which received the most attention during the period was Boeing Company. The wellpublicised grounding of the 737 Max aircraft in March after two tragic crashes within a six month period has now extended beyond the period that was initially forecast. The investigation into the cause of these accidents has brought to light worrying deficiencies in the procedures relating to the authorisation of new aircraft both within the company and the Federal Aviation Administration. At Boeing this has already resulted in the dismissal of the CEO and a significant reorganisation of responsibilities. While it remains unclear exactly when the 737 Max will be allowed to return to service, it is certain that it will because of its vital importance to the welfare of the US manufacturing and global aviation industries. Having shed 22% of its market capitalisation since the date of the second crash, the current share price appears to be discounting an overly pessimistic future for what remains one of the leading global manufacturing businesses operating in an oligopolistic industry set to continue benefitting from long-term secular growth. Based on current consensus expectations the fund offers a significantly better yield than the overall market (dividend yield of 4.2% versus 2.3%), while trading on a lower valuation (forward P/E of 12.3x versus 16.9x) and producing a better return (ROE of 21.3% versus 20.2%). When compared to the MSCI World Index the fund displays an active share of 91%. We believe that this positions the fund well for the future and, based on our current projections, expect it to again deliver on its mandate during the coming 12 months.
The portfolio will invest in assets in liquid form and in participatory interests of the SIM Global Equity Income Fund under the Sanlam Universal Funds PLC approved by the Irish Regulator in September 2004. The portfolio will have foreign exposure of at least 85% at all times.