NAV on 2019/11/14
|NAV on 2019/11/13
|52 week high on 2018/11/15
|52 week low on 2019/01/02
|Total Expense Ratio on 2019/06/30
|Total Expense Ratio (performance fee) on 2019/06/30
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 - Mar 19
Following a dismal 2018, the listed property market enjoyed a welcome bounce back in January. Disappointingly, the momentum faded, and the market finished the quarter up only 1.3%. With current yields of around 10%, the market remains concerned about slowing income growth and the quality of earnings produced by the sector. Trading fundamentals remain weak and lower economic growth expectations weighed on the sector. The on-going plight of Edcon continued to shift the balance of power away from landlords in favour of tenants.
Fortunately, there was some good news as the country avoided a Moody’s downgrade. Large cap hybrid Growthpoint was up nearly 5% for the quarter, whilst offshore UK and European focused property companies produced positive returns. Almost 30% of the sector by market cap is focused exclusively in Europe and the UK. SA bonds also had a good quarter, returning 3.8%.
The Fund returned a promising 3.7% for the quarter. Although SA listed property provided positive returns during the quarter, performance was mainly driven by the Fund’s global property allocation and fixed interest assets. Medium-term performance remains disappointing due to the underperformance of listed property. Over a 10 year period, however, the Fund returned 10.6% per annum after fees, 5.4% ahead of inflation. In addition, the Fund delivered these returns at a lower risk relative to a property-only fund. 2018 was the first year of negative returns for this Fund since its inception.
Both Coronations and STANLIB’s conservative domestic flexible mandates performed reasonably well for the quarter. Performance was driven mainly by the consistent return in low duration fixed interest instruments. Listed property’s positive returns for the quarter further contributed to performance.
Approximately 24% of the Fund is invested in a local passive property mandate that tracks the ALPI. This allocation performed in line with expectations, returning 1.3% for the quarter. The 15% strategic global property allocation that we started incorporating into the Fund at the end of last year has benefited the Fund significantly since inclusion and provides great diversification benefits. The passive global property allocation returned 15.1% for the quarter, while the active allocation managed by Catalyst returned 15.3%. Catalyst’s view is that global real estate fundamentals remain healthy, mainly due to manageable supply levels relative to demand. The estimated forward Funds Available for Distribution (FAD) yield for the sector is 4.6% in US dollar terms and medium-term growth prospects are decent. Global listed real estate appears to be fairly priced, while more attractively priced opportunities exist in specific real estate sectors and stocks.
Portfolio positioning and outlook
The Fund strategically retains exposure to property shares at approximately 60% (45% local and 15% global), while the residual of the Fund invests mostly in short duration income assets and bonds. In the short term, we expect the environment to remain challenging for SA exposed property companies due to low GDP growth expectations and an oversupply in certain property sub-sectors such as office space and the ongoing growth in online retail purchases. The Fund’s fixed interest assets provide a level of protection and are expected to continue delivering inflation-beating returns. With a medium to long-term view, we are confident that the Fund can deliver on its inflation-beating objectives within a well-managed risk framework.
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.