NAV on 2019/01/18
|NAV on 2019/01/17
|52 week high on 2018/01/25
|52 week low on 2019/01/02
|Total Expense Ratio on 2018/09/30
|Total Expense Ratio (performance fee) on 2018/09/30
STANLIB Collective Investments (RF) Limited
South African--Multi Asset--Flexible
FTSE/JSE SA Listed Property index (SAPY)
Malcolm Holmes has 11 years investment experience and has been a portfolio manager in his own right, which makes him the perfect candidate to oversee the evaluation of the underlying managers and their portfolios. As the head portfolio manager, Malcolm is the key person responsible for product development and design at STANLIB Multi-Manager. He is responsible for ensuring that our products meet their investment objectives and that the underlying managers meet their mandates.
STANLIB Multi-Manager was established in 1999 and is the centre of excellence for multi-managed solutions within STANLIB. The investment team, led by Chief Investment Officer Joao Frasco, consists of an experienced team with a diverse set of investment skills. We have offices in Johannesburg and London, and currently have mandates in excess of R90 billion under stewardship.
STANLIB Multi-Manager Funds are designed to deliver superior investment returns more consistently than through a single asset manager or mandate. Our approach allows investors’ to outsource the fund / manager selection decision, which includes the ongoing due diligence of managers and construction of portfolios, to meet pre-defined objectives over time.
Risk management is a fundamental component of our investment philosophy and process and is therefore approached holistically. It permeates every part of our investment process, requiring participation and accountability from all individuals involved in the process.
Naweed joined the STANLIB Multi-Manager Research and Development Team at as a Quantitative Analyst. Prior to STANLIB, Naweed was a Portfolio Risk Analyst at Eminence Partners, a Johannesburg-based long/short equity hedge fund operated under the Peregrine fund platform.
Stanlib MM Flex Property comment - Sep 18
In yet another tough quarter for property shares, the All Property Index (ALPI) lost 1.5%. Some of the largest property shares were hit hardest, with Growthpoint, Redefine, Intu PLC and Hyprop losing 8.9%, 4.5%, 13.0% and 11.2% respectively. Having been such a loved asset class for many years, there have been a number of issues plaguing the sector recently. These include weak consumer and business sentiment in SA, low economic growth, slowing property income growth, the de-rating of the Resilient Group, rising US interest rates and the impact of Brexit on UK property companies. These factors have seen the sector lose 22.5% in 2018.
While many of these factors remain, the market is now fortunately assuming the worst and pricing in this uncertainty. With a longer-term view, we believe that property can provide returns well above inflation. In the short-term, however, we expect volatility to continue.
SA bonds returned 0.8%, driven largely by short-dated instruments which gained 1.9%. The 12+ area of the curve returned 0.4%. SA cash gained 1.8% and the weaker rand boosted offshore returns leading to a 7.4% return from global equities.
The Fund’s strategic blend with fixed interest assets aims to protect investors from extreme volatility and drawdowns in the property market, while participating in the majority of the potential performance upside. During the quarter the SAPY and ALPI lost 1% and 1.5% respectively, while the Fund returned 0.2%. Over the last 10 years, the Fund has delivered 11% per annum, equating to a real return of 5.9%.
Coronation’s flexible property mandate performed in line with expectations for the quarter, returning 1% gross of fees. Coronation’s largest share picks are Redefine and Growthpoint. Relative to the ALPI, Coronation has a large Growthpoint underweight, while being overweight Dipula, Gemgrow and Fortress A. Coronation is currently overweight property relative to their composite benchmark. Their fixed interest assets are concentrated in the 3-7 year bond maturity bucket and the fixed interest component duration is approximately 3.4 years, a slight duration increase from the previous quarter.
The Fund’s passive PCAP allocation lost 2.2% while the passive SAPY allocation lost 1%, both in line with their respective benchmark returns.
The STANLIB flexible property mandate’s high exposure to NEPI Rockcastle and Fortress A assisted quarterly performance as they gained 8.5% and 14.6% respectively.
STANLIB’s duration on the fixed interest portion of the portfolio remains low at less than 12 months, providing good protection. Performance for the quarter was promising at 2.9% gross of fees.
Portfolio positioning and outlook
In addition to further rate hikes in the US, we expect trade wars to continue dominating headlines and this could weigh heavily on EM sentiment. Local asset prices have retreated to levels that may provide a good entry points for investors. However, the global and economic environment remains highly uncertain and we continue to emphasize the importance of having a long-term focus when making investment decisions.
The Fund is a diversified income portfolio with a bias to listed property shares. It will be invested in domestically listed property shares, as well as other high-yielding income producing assets (namely bonds and money market instruments); with the flexibility to adjust the property weight according to market conditions.
It aims to generate a reasonably high level of income and moderate capital growth.
Given that it has around 40% and 85% exposure to listed property, with the balance exposed to fixed interest securities, it will be a more conservative Fund than a fully invested property portfolio. Through time, the Fund is designed to provide most of the upside of listed property with significantly less volatility.